Document:

<PAGE>

                                                                     EXHIBIT 4.1
                                                                  EXECUTION COPY

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                                    Depositor

                             WELLS FARGO BANK, N.A.
                                     Trustee

                                       and

                          WILSHIRE CREDIT CORPORATION,
                                    Servicer

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

                         POOLING AND SERVICING AGREEMENT
                            Dated as of March 1, 2005

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

                     MERRILL LYNCH MORTGAGE INVESTORS TRUST,
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-HE1
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                                TABLE OF CONTENTS

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                                                                                        PAGE

<S>                                                                                     <C>
ARTICLE I   DEFINITIONS................................................................... 1

ARTICLE II  CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES................. 46
            SECTION 2.01.  Conveyance of Mortgage Loans.................................. 46
            Section 2.02.  Acceptance by the Trustee of the Mortgage Loans............... 50
            Section 2.03.  Representations, Warranties and Covenants of the Depositor ... 51
            Section 2.04.  Representations and Warranties of the Servicer................ 55
            Section 2.05.  Substitutions and Repurchases of Mortgage Loans which are
                           not "Qualified Mortgages." ................................... 56
            Section 2.06.  Authentication and Delivery of Certificates................... 57
            Section 2.07.  REMIC Elections............................................... 57
            Section 2.08.  [RESERVED].................................................... 61
            Section 2.09.  Covenants of the Servicer..................................... 61
            Section 2.10.  [RESERVED].................................................... 61
            Section 2.11.  Permitted Activities of the Trust............................. 61
            Section 2.12.  Qualifying Special Purpose Entity............................. 61

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............................... 61
            Section 3.01.  Servicer to Service Mortgage Loans............................ 61
            Section 3.02.  Servicing and Subservicing; Enforcement of the Obligations
                           of Servicer .................................................. 63
            Section 3.03.  Rights of the Depositor and the Trustee in Respect of the
                           Servicer ..................................................... 64
            Section 3.04.  Trustee to Act as Servicer.................................... 64
            Section 3.05.  Collection of Mortgage Loan Payments; Collection Account;
                           Certificate Account .......................................... 65
            Section 3.06.  Collection of Taxes, Assessments and Similar Items; Escrow
                           Accounts ..................................................... 68
            Section 3.07.  Access to Certain Documentation and Information
                           Regarding the Mortgage Loans ................................. 69
            Section 3.08.  Permitted Withdrawals from the Collection Account and
                           Certificate Account .......................................... 69
            Section 3.09.  [RESERVED].................................................... 71
            Section 3.10.  Maintenance of Hazard Insurance............................... 71
            Section 3.11.  Enforcement of Due-On-Sale Clauses; Assumption Agreements .... 72
            Section 3.12.  Realization Upon Defaulted Mortgage Loans; Determination
                           of Excess Proceeds ........................................... 73
            Section 3.13.  Trustee to Cooperate; Release of Mortgage Files............... 76
            Section 3.14.  Documents, Records and Funds in Possession of Servicer to
                           be Held for the Trustee ...................................... 77
            Section 3.15.  Servicing Compensation........................................ 78
            Section 3.16.  Access to Certain Documentation............................... 78
            Section 3.17.  Annual Statement as to Compliance............................. 78
            Section 3.18.  Annual Independent Public Accountants' Servicing
                           Statement; Financial Statements .............................. 79
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                                TABLE OF CONTENTS
                                   (continued)

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<S>                                                                                     <C>
            Section 3.19.  Rights of the NIMs Insurer.................................... 79
            Section 3.20.  Periodic Filings.............................................. 79
            Section 3.21.  Annual Certificate by Trustee................................. 80
            Section 3.22.  Annual Certificate by Servicer................................ 80
            Section 3.23.  Prepayment Charge Reporting Requirements...................... 81
            Section 3.24.  Statements to Trustee......................................... 81
            Section 3.25.  Indemnification............................................... 82
            Section 3.26.  Nonsolicitation............................................... 82
            Section 3.27.  MI Policies; Claims Under the MI Policies..................... 82
            Section 3.28.  High Cost Mortgage Loans...................................... 83

ARTICLE IV  DISTRIBUTIONS................................................................ 83
            SECTION 4.01.  Advances...................................................... 83
            Section 4.02.  Reduction of Servicing Compensation in Connection with
                           Prepayment Interest Shortfalls ............................... 84
            Section 4.03.  Distributions on the REMIC Interests.......................... 84
            Section 4.04.  Distributions................................................. 85
            Section 4.05.  Monthly Statements to Certificateholders...................... 90

ARTICLE V   THE CERTIFICATES............................................................. 94
            Section 5.01.  The Certificates.............................................. 94
            Section 5.02.  Certificate Register; Registration of Transfer and Exchange
                           of Certificates .............................................. 94
            Section 5.03.  Mutilated, Destroyed, Lost or Stolen Certificates............. 98
            Section 5.04.  Persons Deemed Owners......................................... 98
            Section 5.05.  Access to List of Certificateholders' Names and Addresses .... 99
            Section 5.06.  Book-Entry Certificates....................................... 99
            Section 5.07.  Notices to Depository........................................ 100
            Section 5.08.  Definitive Certificates...................................... 100
            Section 5.09.  Maintenance of Office or Agency.............................. 100

ARTICLE VI  THE DEPOSITOR AND THE SERVICER.............................................. 101
            Section 6.01.  Respective Liabilities of the Depositor and the Servicer .... 101
            Section 6.02.  Merger or Consolidation of the Depositor or the Servicer .... 101
            Section 6.03.  Limitation on Liability of the Depositor, the Servicer and
                           Others ...................................................... 101
            Section 6.04.  Limitation on Resignation of Servicer........................ 102
            Section 6.05.  Errors and Omissions Insurance; Fidelity Bonds............... 102

ARTICLE VII DEFAULT; TERMINATION OF SERVICER............................................ 102
            Section 7.01.  Events of Default............................................ 102
            Section 7.02.  Trustee to Act; Appointment of Successor..................... 104
            Section 7.03.  Notification to Certificateholders........................... 104

ARTICLE VIII...........CONCERNING THE TRUSTEE and the securities administrator ......... 105
            Section 8.01.  Duties of the Trustee........................................ 105
            Section 8.02.  Certain Matters Affecting the Trustee........................ 106
            Section 8.03.  Trustee Not Liable for Mortgage Loans........................ 107
            Section 8.04.  Trustee May Own Certificates................................. 107
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ii
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                                TABLE OF CONTENTS
                                   (continued)

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<S>                                                                                     <C>
            Section 8.05.  Trustee's Fees and Expenses.................................. 107
            Section 8.06.  Indemnification of Trustee................................... 108
            Section 8.07.  Eligibility Requirements for Trustee......................... 109
            Section 8.08.  Resignation and Removal of Trustee........................... 109
            Section 8.09.  Successor Trustee............................................ 110
            Section 8.10.  Merger or Consolidation of Trustee........................... 110
            Section 8.11.  Appointment of Co-Trustee or Separate Trustee................ 110
            Section 8.12.  Tax Matters.................................................. 111

ARTICLE IX  TERMINATION................................................................. 114
            Section 9.01.  Termination upon Liquidation or Repurchase of all
                           Mortgage Loans .............................................. 114
            Section 9.02.  Final Distribution on the Certificates....................... 115
            Section 9.03.  Additional Termination Requirements.......................... 116

ARTICLE X   MISCELLANEOUS PROVISIONS.................................................... 117
            Section 10.01. Amendment.................................................... 117
            Section 10.02. Counterparts................................................. 119
            Section 10.03. Governing Law................................................ 119
            Section 10.04. Intention of Parties......................................... 119
            SECTION 10.05. Notices...................................................... 119
            Section 10.06. Severability of Provisions................................... 120
            Section 10.07. Assignment................................................... 120
            Section 10.08. Limitation on Rights of Certificateholders................... 121
            Section 10.09. Inspection and Audit Rights.................................. 122
            Section 10.10. Certificates Nonassessable and Fully Paid.................... 122
            Section 10.11. Third Party Rights........................................... 123
            Section 10.12. Additional Rights of the NIMs Insurer........................ 123
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iii
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                                TABLE OF CONTENTS
                                   (continued)

EXHIBIT A         FORMS OF CERTIFICATES
EXHIBIT B-1       MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
EXHIBIT B-2       MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
EXHIBIT B-3       MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
EXHIBIT B-4       MORTGAGE LOAN SCHEDULE - MI MORTGAGE LOANS
EXHIBIT C         [RESERVED]
EXHIBIT D         FORM OF TRUSTEE CERTIFICATION
EXHIBIT E-1       FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2       FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F         FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G         FORM OF INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H         FORM OF RULE 144A LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I         FORM OF REQUEST FOR RELEASE
EXHIBIT J         LIST OF TRANSFER AGREEMENTS AND BRING DOWN LETTERS
EXHIBIT K         FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L         FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M         MORTGAGE LOAN MODIFICATIONS
EXHIBIT N-1       FORM OF CLASS A-1 CAP CONTRACT
EXHIBIT N-2       FORM OF CLASS A-2 CAP CONTRACT
EXHIBIT N-3       FORM OF SUBORDINATED CERTIFICATE CAP CONTRACT
EXHIBIT O-1       ONE-MONTH LIBOR CAP TABLE - CLASS A-1 CAP CONTRACT
EXHIBIT O-2       ONE MONTH LIBOR CAP TABLE - CLASS A-2 CAP CONTRACT
EXHIBIT O-3       ONE MONTH LIBOR CAP TABLE - SUBORDINATED CERTIFICATE CAP
                  CONTRACT
EXHIBIT P         [RESERVED]
EXHIBIT Q-1.      MI POLICY- PMI MORTGAGE INSURANCE CO.
EXHIBIT Q-2.      MI POLICY- MORTGAGE GUARANTY INSURANCE CORPORATION

iv
<PAGE>
      POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of March 1,
2005, among MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation, as
depositor (the "Depositor"), WELLS FARGO BANK, N.A, a national banking
association, as trustee (the "Trustee") and WILSHIRE CREDIT CORPORATION, a
Nevada corporation, as servicer (the "Servicer").

      The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of (i) two real estate mortgage investment conduits,
(ii) the right to receive payments distributable to the Class P Certificates
pursuant to Section 4.04(b)(i) hereof, (iii) each Cap Contract and the Cap
Contract Account and (iv) the grantor trusts described in Section 2.07 hereof.
The Lower Tier REMIC will consist of all of the assets constituting the Trust
Fund (other than the assets described in clauses (ii), (iii) and (iv) above and
the Lower Tier REMIC Regular Interests) and will be evidenced by the Lower Tier
REMIC Regular Interests (which will be uncertificated and will represent the
"regular interests" in the Lower Tier REMIC) and the Class LTR Interest as the
single "residual interest" in the Lower Tier REMIC. The Trustee will hold the
Lower Tier REMIC Regular Interests. The Upper Tier REMIC will consist of the
Lower Tier REMIC Regular Interests and will be evidenced by the REMIC Regular
Interests (which will represent the "regular interests" in the Upper Tier REMIC)
and the Residual Interest as the single "residual interest" in the Upper Tier
REMIC. The Class R Certificate will represent beneficial ownership of the Class
LTR Interest and the Residual Interest. The "latest possible maturity date" for
federal income tax purposes of all interests created hereby will be the Latest
Possible Maturity Date.

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

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

                                    ARTICLE I

                                   DEFINITIONS

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

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

      Accrual Period: With respect to each Class of Certificates and the Lower
Tier REMIC Interests and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
such Distribution Date. All calculations of interest on each Class of
Certificates and the Lower Tier REMIC Interests will be made on the basis of the
actual number of days elapsed in the related Accrual Period and a 360 day year.

      Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate which is adjustable.
<PAGE>
      Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.

      Advance: The aggregate of the advances required to be made by the Servicer
with respect to any Distribution Date pursuant to Section 4.01, the amount of
any such advances being equal to the sum of the aggregate amount of all payments
of principal and interest (net of the Servicing Fee) on the Mortgage Loans that
were due during the applicable Due Period and not received as of the close of
business on the related Determination Date (other than the principal portion of
any Balloon Amount), less the aggregate amount of any such Delinquent payments
that the Servicer has determined would constitute a Non-Recoverable Advance were
an advance to be made with respect thereto; provided, however, that with respect
to any Mortgage Loan which is not a first lien Mortgage Loan that is 150 days
delinquent or more (whether or not the Mortgage Loan has been converted to an
REO Property), there will be no obligation to make advances and, provided
further, however, that with respect to any Mortgage Loan that has been converted
to an REO Property which is less than 150 days delinquent, the obligation to
make Advances shall only be to payments of interest.

      Advance Facility: A financing or other facility as described in Section
10.07.

      Advancing Person: The Person to whom the Servicer's rights under this
Agreement to be reimbursed for any Advances or Servicing Advances have been
assigned pursuant to Section 10.07.

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

      Aggregate Certificate Principal Balance: For any date of determination,
the sum of the Class A-1A Certificate Principal Balance, the Class A-1B
Certificate Principal Balance, the Class A-2A Certificate Principal Balance, the
Class A-2B Certificate Principal Balance, the Class A-2C Certificate Principal
Balance, the Class R Certificate Principal Balance, the Class M-1 Certificate
Principal Balance, the Class M-2 Certificate Principal Balance, the Class M-3
Certificate Principal Balance, the Class B-1 Certificate Principal Balance, the
Class B-2 Certificate Principal Balance, the Class B-3 Certificate Principal
Balance, the Class B-4 Certificate Principal Balance and the Class B-5
Certificate Principal Balance, in each case as of such date of determination.

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

      Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date.

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

                                      - 2 -
<PAGE>
Loan) at such time of origination. With respect to a Mortgage Loan the proceeds
of which were used to refinance an existing mortgage loan, the "Appraised Value"
is the appraised value of the Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property in the case of a Co-op Loan)
based upon the appraisal obtained at the time of refinancing.

      Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
(or UCC-3 assignment (or equivalent instrument) with respect to each Co-op Loan)
or equivalent instrument, in recordable form (except in the case of a Co-op
Loan) (except for the name of the assignee if such Mortgage Loan is endorsed in
blank), sufficient under the laws of the jurisdiction where the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) is located to reflect of record the sale and assignment of the Mortgage
Loan to the Trustee, which assignment, notice of transfer or equivalent
instrument may, if permitted by law, be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county.

      Auction: The one-time auction conducted by the Trustee, as described in
Section 9.01(b) hereof.

      Auction Date: The date on which the Auction occurs.

      Available Funds Cap: Any of the Class A-1 Available Funds Cap, the Class
A-2 Available Funds Cap or the Subordinated Certificate Available Funds Cap.

      Balloon Loan: A Mortgage Loan having an original term to stated maturity
of approximately 15 years which provides for level monthly payments of principal
and interest based on a 30-year amortization schedule, with a balloon payment of
the remaining outstanding principal balance due on such Mortgage Loan at its
stated maturity.

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

      Bring Down Letters: Those certain letter agreements, dated as of April 21,
2005 between the Seller and each Transferor set out on Exhibit J hereto.

      Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State of California, State of Maryland,
State of Minnesota, State of Oregon and in the City of New York, New York are
authorized or obligated by law or executive order to be closed.

      Cap Contract: Any of the Class A-1 Cap Contract, the Class A-2 Cap
Contract or the Subordinated Certificate Cap Contract.

      Cap Contract Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 4.04(k)(i) in the name of the Trustee for the
benefit of the Trust Fund and designated "Wells Fargo Bank, N.A., as Trustee, as
trustee, in trust for registered holders of Merrill Lynch Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-HE1." Funds in the
Cap Contract Account shall be held in trust for the Trust Fund for the uses and
purposes set forth in this Agreement.

      Cap Contract Counterparty: The Bank of New York.

                                     - 3 -
<PAGE>
      Cap Contract Notional Balance: Any of the Class A-1 Cap Contract Notional
Balance, the Class A-2 Cap Contract Notional Balance or the Subordinated
Certificate Cap Contract Notional Balance.

      Cap Contract Termination Date: Any of the Class A-1 Cap Contract
Termination Date, the Class A-2 Cap Contract Termination Date or the
Subordinated Certificate Cap Contract Termination Date.

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

      Certificate Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05(e) in the name of the Trustee for the
benefit of the Certificateholders and designated "Wells Fargo Bank, N.A., as
trustee, in trust for registered holders of Merrill Lynch Mortgage Investors
Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-HE1." Funds in the
Certificate Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.

      Certificate Group: Either of Certificate Group One or Certificate Group
Two.

      Certificate Group One: The Class A-1A, Class A-1B and Class R
Certificates. For purposes of Section 2.07 hereof, Certificate Group One shall
be related to Group One.

      Certificate Group Two: The Class A-2A, Class A-2B and Class A-2C
Certificates. For purposes of Section 2.07 hereof, Certificate Group Two shall
be related to Group Two.

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

      Certificate Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
less the sum of (1) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to Section
4.04(i). On each Distribution Date, after all distributions of principal on such
Distribution Date, a portion of the Class C Interest Carry Forward Amount in an
amount equal to the excess of the Overcollateralization Amount on such
Distribution Date over the Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the first Distribution Date, the initial
Overcollateralization Amount (based on the Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date)) will be added to the aggregate
Certificate Principal Balance of the Class C Certificates (on a pro rata basis).
Notwithstanding the foregoing on any Distribution Date relating to a Due Period
in which a Subsequent Recovery has been received by the Servicer, the
Certificate Principal Balance of any Class of Certificates then outstanding for
which any Applied Realized Loss Amount has been allocated will be increased, in
order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of any Subsequent
Recovery distributed on such date to the Certificateholders (reduced by the
amount of the increase in the Certificate Principal Balance of any more senior
Class of Certificates pursuant to this sentence on such Distribution Date).

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

      Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository) in the case of any Class of Regular Certificates or the Class R
Certificate, except that solely for the purpose of giving any consent

                                     - 4 -
<PAGE>
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or any Affiliate of the Depositor shall be deemed not to be
Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
any such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The NIMs Insurer and the Trustee are entitled to rely
conclusively on a certification of the Depositor or any Affiliate of the
Depositor in determining which Certificates are registered in the name of an
Affiliate of the Depositor.

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

      Class A Certificate Principal Balance: For any date of determination, the
sum of the Class A-1A Certificate Principal Balance, the Class A-1B Certificate
Principal Balance, the Class A-2A Certificate Principal Balance, the Class A-2B
Certificate Principal Balance, the Class A-2C Certificate Principal Balance and
the Class R Certificate Principal Balance.

      Class A Certificates: Any of the Class A-1 Certificates, the Class A-2
Certificates and the Class R Certificates.

      Class A Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the Stepdown Date or any Distribution Date on which a Stepdown
Trigger Event exists, 100% of the Principal Distribution Amount for such
Distribution Date and (2) on or after the Stepdown Date where a Stepdown Trigger
Event does not exist, the excess of (A) the Class A Certificate Principal
Balance immediately prior to such Distribution Date over (B) the lesser of (i)
73.90% of the Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period and (ii) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount; provided,
however, that in no event will the Class A Principal Distribution Amount with
respect to any Distribution Date exceed the aggregate Certificate Principal
Balance of the Class A Certificates.

      Class A-1 Available Funds Cap: With respect to a Distribution Date, the
per annum rate equal to the product of (i) 12, (ii) the quotient of (x) the
total scheduled interest on the Mortgage Loans in Group One based on the Net
Mortgage Rates in effect on the related Due Date divided by (y) the aggregate
Stated Principal Balance of the Mortgage Loans in Group One as of the first day
of the related Accrual Period (or, in the case of the first Distribution Date,
as of the Cut-off Date) and (iii) a fraction, the numerator of which is 30, and
the denominator of which is the actual number of days in the related Accrual
Period.

      Class A-1 Cap Contract: The amended confirmation and agreement and any
related confirmation thereto, between the Trust Fund or Trustee and the Cap
Contract Counterparty (in the form of Exhibit N-1 hereto).

      Class A-1 Cap Contract Notional Balance: With respect to any Distribution
Date, the Class A-1 Cap Contract Notional Balance set forth for such
Distribution Date in the Class A-1 One-Month LIBOR Cap Table attached hereto as
Exhibit O-1.

      Class A-1 Cap Contract Termination Date: The day after the Distribution
Date in April 2008.

      Class A-1 Certificates: Any of the Class A-1A and Class A-1B Certificates.

                                     - 5 -
<PAGE>
      Class A-1 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate, adjusted to reflect the length of the related Accrual Period, equal
to the weighted average of the maximum lifetime Net Mortgage Rates on the
Adjustable Rate Mortgage Loans in Group One and the Net Mortgage Rates on the
Fixed Rate Mortgage Loans in Group One. The Class A-1 Maximum Rate Cap shall
relate to the Class A-1 and Class R Certificates.

      Class A-1 Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:

Distribution Date Occurring In      Class A-1 Required Loss Percentage

      April 2005 - March 2008       1.50%

      April 2008 - March 2009       1.50% with respect to April 2008, plus an
                                    additional 1/12th of 0.50% for each month
                                    thereafter

      April 2009 - March 2010       2.00% with respect to April 2009, plus an
                                    additional 1/12th of 0.75% for each month
                                    thereafter

      April 2010 - March 2011       2.75% with respect to April 2010, plus an
                                    additional 1/12th of 0.25% for each month
                                    thereafter

      April 2011 and thereafter     3.00%

      Class A-1 Trigger Event: The situation that exists with respect to any
Distribution Date on or after April 2005, if (a) the quotient of (1) the
aggregate Stated Principal Balance of all Group One Mortgage Loans 60 or more
days delinquent, measured on a rolling three-month basis (including Mortgage
Loans in foreclosure, REO Properties and Mortgage Loans with respect to which
the applicable mortgagor is in bankruptcy) and (2) the Stated Principal Balance
of all the Group One Mortgage Loans as of the preceding Servicer Remittance
Date, equals or exceeds the product of (i) 40.00% and (ii) the Required
Percentage or (b) the quotient (expressed as a percentage) of (1) the aggregate
Realized Losses incurred from the Cut-off Date through the last day of the
calendar month preceding such Distribution Date and (2) the aggregate principal
balance of the Group One Mortgage Loans as of the Cut-off Date exceeds the Class
A-1 Required Loss Percentage

      Class A-1 Upper Collar: With respect to each Distribution Date with
respect to which payments are received on the Class A-1 Cap Contract, a rate
equal to the lesser of One-Month LIBOR and 9.280% per annum.

      Class A-1A Certificate: Any Certificate designated as a "Class A-1A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

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

      Class A-1A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1A Pass-Through Rate on
the Class A-1A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1A Certificates.

                                     - 6 -
<PAGE>
      Class A-1A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1A Pass-Through Rate for the related Accrual Period.

      Class A-1A Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.210% per annum and, as of any Distribution
Date after the Optional Termination Date, 0.420% per annum.

      Class A-1A Pass-Through Rate: For the first Distribution Date, 3.210% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1A Margin and (2) the Class A-1 Available Funds Cap for such
Distribution Date.

      Class A-1B Certificate: Any Certificate designated as a "Class A-1B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

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

      Class A-1B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1B Pass-Through Rate on
the Class A-1B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1B Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1B Certificates.

      Class A-1B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1B Pass-Through Rate for the related Accrual Period.

      Class A-1B Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.260% per annum and, as
of any Distribution Date after the Optional Termination Date, 0.520% per annum.

      Class A-1B Pass-Through Rate: For the first Distribution Date, 3.260% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1B Margin and (2) the Class A-1 Available Funds Cap for such
Distribution Date.

      Class A-2 Available Funds Cap: With respect to a Distribution Date, the
per annum rate equal to the product of (i) 12, (ii) the quotient of (x) the
total scheduled interest on the Mortgage Loans in Group Two based on the Net
Mortgage Rates in effect on the related Due Date divided by (y) the aggregate
Stated Principal Balance of the Mortgage Loans in Group Two as of the first day
of the related Accrual Period (or, in the case of the first Distribution Date,
as of the Cut-off Date) and (iii) a fraction, the numerator of which is 30, and
the denominator of which is the actual number of days in the related Accrual
Period.

                                     - 7 -
<PAGE>
      Class A-2 Cap Contract: The amended confirmation and agreement and any
related confirmation thereto, between the Trust Fund or Trustee and the Cap
Contract Counterparty (in the form of Exhibit N-2 hereto).

      Class A-2 Cap Contract Notional Balance: With respect to any Distribution
Date, the Class A-2 Cap Contract Notional Balance set forth for such
Distribution Date in the Class A-2 One-Month LIBOR Cap Table attached hereto as
Exhibit O-2.

      Class A-2 Cap Contract Termination Date: The day after the Distribution
Date in May 2011.

      Class A-2 Certificates: Any of the Class A-2A, Class A-2B and Class A-2C
Certificates.

      Class A-2 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate, adjusted to reflect the length of the related Accrual Period, equal
to the weighted average of the maximum lifetime Net Mortgage Rates on the
Adjustable Rate Mortgage Loans in Group Two and the Net Mortgage Rates on the
Fixed Rate Mortgage Loans in Group Two. The Class A-2 Maximum Rate Cap shall
relate to the Class A-2 Certificates.

      Class A-2 Upper Collar: With respect to each Distribution Date with
respect to which payments are received on the Class A-2 Cap Contract, a rate
equal to the lesser of One-Month LIBOR and 9.300% per annum.

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

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

      Class A-2A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2A Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2A Certificates.

      Class A-2A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2A Pass-Through Rate for the related Accrual Period.

      Class A-2A Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.100% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.200% per
annum.

      Class A-2A Pass-Through Rate: For the first Distribution Date, 3.100% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2A Margin and (2) the Class A-2 Available Funds Cap for such
Distribution Date.

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

                                     - 8 -
<PAGE>
      Class A-2B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2B Certificates.

      Class A-2B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2B Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2B Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2B Certificates.

      Class A-2B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2B Pass-Through Rate for the related Accrual Period.

      Class A-2B Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.200% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.400% per
annum.

      Class A-2B Pass-Through Rate: For the first Distribution Date, 3.200% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2B Margin and (2) the Class A-2 Available Funds Cap for such
Distribution Date.

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

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

      Class A-2C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2C Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class A-2C
Current Interest or a Class A-2C Interest Carry Forward Amount that is recovered
as a voidable preference by a trustee in bankruptcy, less any Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class A-2C
Certificates.

      Class A-2C Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2C Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2C Pass-Through Rate for the related Accrual Period.

      Class A-2C Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.310% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.620% per
annum.

      Class A-2C Pass-Through Rate: For the first Distribution Date, 3.310% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2C Margin and (2) the Class A-2 Available Funds Cap for such
Distribution Date.

                                     - 9 -
<PAGE>
      Class B Certificates: Any of the Class B-1, Class B-2, Class B-3, Class
B-4 or Class B-5 Certificates.

      Class B-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-1 Certificates.

      Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

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

      Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-1 Certificates.

      Class B-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-1 Pass-Through Rate for the related Accrual Period.

      Class B-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 1.200% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 1.800% per
annum.

      Class B-1 Pass-Through Rate: For the first Distribution Date, 4.200% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.

      Class B-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance and the
Class M Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance (after taking into account distributions of the Class M-2 Principal
Distribution Amount on such Distribution Date), (D) the Class M-3 Certificate
Principal Balance (after taking into account distributions of the Class M-3
Principal Distribution Amount on such Distribution Date) and (E) the Class B-1
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 94.50% of the Stated Principal Balance of the Mortgage
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balance of the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates and Class M Certificates has been reduced to zero, the Class B-1
Principal Distribution

                                     - 10 -
<PAGE>
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class B-1 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A Certificates and Class
M Certificates and (II) in no event will the Class B-1 Principal Distribution
Amount with respect to any Distribution Date exceed the Class B-1 Certificate
Principal Balance.

      Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

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

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

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

      Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-2 Certificates.

      Class B-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-2 Pass-Through Rate for the related Accrual Period.

      Class B-2 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 1.300% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 1.950% per
annum.

      Class B-2 Pass-Through Rate: For the first Distribution Date, 4.300% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.

      Class B-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance and the Class B-1 Certificate Principal
Balance have been reduced to zero and a Stepdown Trigger Event exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount

                                     - 11 -
<PAGE>
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class B-1 Certificate Principal
Balance (after taking into account distributions of the Class B-1 Principal
Distribution Amount on such Distribution Date) and (F) the Class B-2 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 95.50% of the Stated Principal Balance of the Mortgage Loans as of
the end of the immediately preceding Due Period and (B) the excess of the Stated
Principal Balance of the Mortgage Loans as of the end of the immediately
preceding Due Period over the Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A, Class M and Class B-1 Certificates has been reduced to zero, the Class B-2
Principal Distribution Amount will equal the lesser of (x) the outstanding
Certificate Principal Balance of the Class B-2 Certificates and (y) 100% of the
Principal Distribution Amount remaining after any distributions on such Class A,
Class M and Class B-1 Certificates and (II) in no event will the Class B-2
Principal Distribution Amount with respect to any Distribution Date exceed the
Class B-2 Certificate Principal Balance.

      Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

      Class B-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-3 Certificates.

      Class B-3 Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

      Class B-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-3 Certificates.

      Class B-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-3 Certificates.

      Class B-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-3 Pass-Through Rate for the related Accrual Period.

      Class B-3 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 1.750% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 2.625% per
annum.

                                     - 12 -
<PAGE>
      Class B-3 Pass-Through Rate: For the first Distribution Date, 4.750% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-3 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.

      Class B-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate Principal
Balance and the Class B-2 Certificate Principal Balance have been reduced to
zero and a Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event
does not exist, the excess of (1) the sum of (A) the Class A Certificate
Principal Balance (after taking into account distributions of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distributions of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E) the Class B-1 Certificate Principal Balance (after
taking into account distributions of the Class B-1 Principal Distribution Amount
on such Distribution Date), (F) the Class B-2 Certificate Principal Balance
(after taking into account distributions of the Class B-2 Principal Distribution
Amount on such Distribution Date) and (G) the Class B-3 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
96.50% of the Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A, Class M, Class B-1
and Class B-2 Certificates has been reduced to zero, the Class B-3 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class B-3 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class M,
Class B-1 and Class B-2 Certificates and (II) in no event will the Class B-3
Principal Distribution Amount with respect to any Distribution Date exceed the
Class B-3 Certificate Principal Balance.

      Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance"

      Class B-4 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-4 Certificates.

      Class B-4 Certificate: Any Certificate designated as a "Class B-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

      Class B-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-4 Certificates.

      Class B-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-4 Pass-Through Rate on
the Class B-4 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-4 Interest Carry Forward Amount that is recovered as a
voidable preference by a

                                     - 13 -
<PAGE>
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-4 Certificates.

      Class B-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-4 Pass-Through Rate for the related Accrual Period.

      Class B-4 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 3.250% per annum, and, as of any
Distribution Date after the Optional Termination Date, 4.875% per annum.

      Class B-4 Pass-Through Rate: For the first Distribution Date, 6.250% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-4 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.

      Class B-4 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate Principal
Balance, the Class B-2 Certificate Principal Balance and the Class B-3
Certificate Principal Balance have been reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-3 Principal
Distribution Amount on such Distribution Date), (E) the Class B-1 Certificate
Principal Balance (after taking into account distributions of the Class B-1
Principal Distribution Amount on such Distribution Date), (F) the Class B-2
Certificate Principal Balance (after taking into account distributions of the
Class B-2 Principal Distribution Amount on such Distribution Date), (G) the
Class B-3 Certificate Principal Balance (after taking into account distributions
of the Class B-3 Principal Distribution Amount on such Distribution Date) and
(H) the Class B-4 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 97.50% of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the excess of the Stated Principal Balance of the Mortgage Loans
as of the end of the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A, Class M, Class B-1, Class B-2 and Class B-3
Certificates has been reduced to zero, the Class B-4 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class B-4 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class M, Class B-1,
Class B-2 and Class B-3 Certificates and (II) in no event will the Class B-4
Principal Distribution Amount with respect to any Distribution Date exceed the
Class B-4 Certificate Principal Balance.

      Class B-4 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-4 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

                                     - 14 -
<PAGE>
      Class B-5 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-5 Certificates.

      Class B-5 Certificate: Any Certificate designated as a "Class B-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

      Class B-5 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-5 Certificates.

      Class B-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-5 Pass-Through Rate on
the Class B-5 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-5 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-5 Certificates.

      Class B-5 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-5 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-5 Pass-Through Rate for the related Accrual Period.

      Class B-5 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 3.250% per annum, and,
as of any Distribution Date after the Initial Optional Termination Date, 4.875%
per annum.

      Class B-5 Pass-Through Rate: For the first Distribution Date 6.250% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-5 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.

      Class B-5 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate Principal
Balance, the Class B-2 Certificate Principal Balance, the Class B-3 Certificate
Principal Balance and the Class B-4 Certificate Principal Balance have been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after taking into account distributions of
the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E) the Class B-1 Certificate Principal Balance (after
taking into account distributions of the Class B-1 Principal Distribution Amount
on such Distribution Date), (F) the Class B-2 Certificate Principal Balance
(after taking into account distributions of the Class B-2 Principal Distribution
Amount on such Distribution Date), (G) the Class B-3 Certificate Principal
Balance (after taking into account distributions of the Class B-3 Principal
Distribution Amount on such Distribution Date), (H) the Class B-4 Certificate
Principal Balance (after taking into account distributions of the Class B-4
Principal Distribution Amount on such Distribution Date) and (I) the Class B-5
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 99.00% of the Stated Principal Balance of the Mortgage
Loans

                                     - 15 -
<PAGE>
as of the end of the immediately preceding Due Period and (B) the excess of the
Stated Principal Balance of the Mortgage Loans as of the end of the immediately
preceding Due Period over the Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A, Class M, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates has been
reduced to zero, the Class B-5 Principal Distribution Amount will equal the
lesser of (x) the outstanding Certificate Principal Balance of the Class B-5
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class M, Class B-1, Class B-2, Class B-3 and
Class B-4 Certificates and (II) in no event will the Class B-5 Principal
Distribution Amount with respect to any Distribution Date exceed the Class B-5
Certificate Principal Balance.

      Class B-5 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-5 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

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

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

      Class C Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class C Certificates.

      Class C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class C Distributable Interest
Rate on a notional amount equal to 99.95% of the aggregate principal balance of
the Lower Tier REMIC Regular Interests immediately prior to such Distribution
Date (such amount of interest representing a "specified portion" (within the
meaning of Treasury Regulations Section 1.860G-1(a)(2)(i)(C)) of interest
payments on the Lower Tier REMIC Regular Interests (other than the Class LTII1B
Interest and the Class LTII2B Interest)), plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class C Certificates.

      Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of the interest rates on the Lower Tier
REMIC I Marker Interests and the Class LTIX Interest (treating for purposes of
this clause (b) the interest rate on each of the Lower Tier REMIC I Marker
Interests as being subject to a cap and a floor equal to the interest rate of
the Corresponding Certificates and treating the Class LTIX Interest as being
capped at zero). The averages described in the preceding sentence shall be
weighted on the basis of the respective principal balances of the Lower Tier
REMIC Regular Interests immediately prior to any date of determination.

      Class C Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class C Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates or added to the aggregate
Certificate Principal Balance of the Class C Certificates.

                                     - 16 -
<PAGE>
      Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class C Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."

      Class LTA-1A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificates and an interest rate equal
to the Net Rate.

      Class LTA-1B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.

      Class LTA-2A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.

      Class LTA-2B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.

      Class LTA-2C Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.

      Class LTB-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.

      Class LTB-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.

      Class LTB-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.

      Class LTB-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.

      Class LTB-5 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.

      Class LTIX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial prinicipal balance equal to the excess of (i) 50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over (ii) the
initial principal balance of the Lower Tier REMIC I Marker Interests, and with
an interest rate equal to the Net Rate.

                                     - 17 -
<PAGE>
      Class LTIIX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) 50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over (ii) the
initial principal balance of the Lower Tier REMIC II Marker Interests, and with
an interest rate equal to the Net Rate.

      Class LTII1A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 0.05% of the excess of (i)
the aggregate Cut-off Date Principal Balance of the Group One Mortgage Loans
over (ii) the aggregate of the initial Certificate Principal Balances of
Certificate Group One, and with an interest rate equal to the Net Rate.

      Class LTII1B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 0.05% of the aggregate
Cut-off Date Principal Balance of the Group One Mortgage Loans, and with an
interest rate equal to the Class A-1 Available Funds Cap.

      Class LTII2A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 0.05% of the excess of (i)
the aggregate Cut-off Date Principal Balance of the Group Two Mortgage Loans
over (ii) the aggregate of the initial Certificate Principal Balances of
Certificate Group Two, and with an interest rate equal to the Net Rate.

      Class LTII2B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 0.05% of the aggregate
Cut-off Date Principal Balance of the Group Two Mortgage Loans, and with an
interest rate equal to the Class A-2 Available Funds Cap.

      Class LTM-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.

      Class LTM-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.

      Class LTM-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.

      Class LTR Interest: The sole class of "residual interest" in the Lower
Tier REMIC.

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

      Class M Certificate Principal Balance: For any date of determination, the
sum of the Class M-1 Certificate Principal Balance, Class M-2 Certificate
Principal Balance and the Class M-3 Certificate Principal Balance.

      Class M-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-1 Certificates.

      Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

                                     - 18 -
<PAGE>
      Class M-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1 Certificates.

      Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-1 Certificates.

      Class M-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-1 Pass-Through Rate for the related Accrual Period.

      Class M-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.430% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.645% per
annum.

      Class M-1 Pass-Through Rate: For the first Distribution Date, 3.430% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin and (2) the Subordinated Certificate Available Funds
Cap for such Distribution Date.

      Class M-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance has been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date) and (B) the
Class M-1 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 84.40% of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances for the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates has been reduced to zero, the
Class M-1 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-1 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A Certificates and (II) in no event will the Class M-1 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-1
Certificate Principal Balance.

      Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

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

                                     - 19 -
<PAGE>
         Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

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

         Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-2 Certificates.

         Class M-2 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-2 Pass-Through Rate for the related Accrual Period.

         Class M-2 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.630% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.945% per
annum.

         Class M-2 Pass-Through Rate: For the first Distribution Date, 3.630%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-2 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.

         Class M-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance and the Class M-1 Certificate Principal Balance have been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after taking into account distributions of
the Class M-1 Principal Distribution Amount on such Distribution Date) and (C)
the Class M-2 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 92.10% of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period and (B) the excess of the Stated Principal Balances of the Mortgage Loans
as of the end of the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates and the Class M-1 Certificates has
been reduced to zero, the Class M-2 Principal Distribution Amount will equal the
lesser of (x) the outstanding Certificate Principal Balance of the Class M-2
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A Certificates and Class M-1 Certificates and
(II) in no event will the Class M-2 Principal Distribution Amount with respect
to any Distribution Date exceed the Class M-2 Certificate Principal Balance.

         Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the

                                     - 20 -
<PAGE>
Certificate Principal Balance of such Class M-2 Certificates pursuant to the
last sentence of the definition of "Certificate Principal Balance."

         Class M-3 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-3 Certificates.

         Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

         Class M-3 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-3
Certificates.

         Class M-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-3 Certificates.

         Class M-3 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.

         Class M-3 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.690% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 1.035% per
annum.

         Class M-3 Pass-Through Rate: For the first Distribution Date, 3.690%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-3 Margin and (2) the Subordinated Certificate Available
Funds Cap for such Distribution Date.

         Class M-3 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, Class M-1 Certificate Principal Balance and Class M-2
Certificate Principal Balance have been reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date) and (D) the Class M-3 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
93.30% of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates, the
Class M-1 Certificates and the Class M-2 Certificates has been reduced to zero,
the Class M-3 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate

                                     - 21 -
<PAGE>
Principal Balance of the Class M-3 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class M-1
and Class M-2 Certificates and (II) in no event will the Class M-3 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-3
Certificate Principal Balance.

         Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

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

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

         Class R Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class R Certificate.

         Class R Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class R Pass-Through Rate on
the Class R Certificate Principal Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or a Class R Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class R Certificate.

         Class R Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class R Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class R
Certificate with respect to interest on such prior Distribution Dates and (2)
interest on such excess (to the extent permitted by applicable law) at the Class
R Pass-Through Rate for the related Accrual Period.

         Class R Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.210% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.420% per
annum.

         Class R Pass-Through Rate: For the first Distribution Date, 3.210% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin and (2) the Class A-1 Available Funds Cap for such
Distribution Date.

         Closing Date:  April 21, 2005.

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

         Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Wilshire
Credit Corporation, as servicer for Wells Fargo Bank, N.A., as Trustee, in trust
for registered holders of Merrill Lynch Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-HE1." Funds in the Collection Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.

                                     - 22 -
<PAGE>
         Combined Loan-to-Value Ratio: For any Mortgage Loan in a second lien
position, the fraction, expressed as a percentage, the numerator of which is the
sum of (1) the original principal balance of the related Mortgage Loan and (2)
any outstanding principal balances of Mortgage Loans the liens on which are
senior to the lien on such related Mortgage Loan (such sum calculated at the
date of origination of such related Mortgage Loan) and the denominator of which
is the lesser of (A) the Appraised Value of the related Mortgaged Property (or
applicable dwelling unit, in the case of a Co-op Loan) and (B) the sales price
of the related Mortgaged Property (or applicable dwelling unit, in the case of a
Co-op Loan) at time of origination.

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

         Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released either to a Mortgagor in accordance with the terms of the related
mortgage loan documents or to the holder of a senior lien on the Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan).

         Co-op Lease: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.

         Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated to
a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.

         Corresponding Certificates: With respect to the Class LTA-1A Interest,
the Class A-1A and Class R Certificates. With respect to the Class LTA-1B
Interest, the Class A-1B Certificates. With respect to the Class LTA-2A
Interest, the Class A-2A Certificates. With respect to the Class LTA-2B
Interest, the Class A-2B Certificates. With respect to the Class LTA-2C
Interest, the Class A-2C Certificates. With respect to the Class LTM-1 Interest,
the Class M-1 Certificates. With respect to the Class LTM-2 Interest, the Class
M-2 Certificates. With respect to the Class LTM-3 Interest, the Class M-3
Certificates. With respect to the Class LTB-1 Interest, the Class B-1
Certificates. With respect to the Class LTB-2 Interest, the Class B-2
Certificates. With respect to the Class LTB-3 Interest, the Class B-3
Certificates. With respect to the Class LTB-4 Interest, the Class B-4
Certificates. With respect to the Class LTB-5 Interest, the Class B-5
Certificates.

         Current Interest: Any of the Class A-1A Current Interest, the Class
A-1B Current Interest, the Class A-2A Current Interest, the Class A-2B Current
Interest, the Class A-2C Current Interest, the Class R Current Interest, the
Class M-1 Current Interest, the Class M-2 Current Interest, the Class M-3
Current Interest, the Class B-1 Current Interest, the Class B-2 Current
Interest, the Class B-3 Current Interest, the Class B-4 Current Interest, the
Class B-5 Current Interest and the Class C Current Interest.

         Cut-off Date:  March 1, 2005.

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

                                     - 23 -
<PAGE>
         Definitive Certificates:  As defined in Section 5.06.

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

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

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

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

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

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

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

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

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

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

         Distribution Date: The 25th day of each calendar month, or if such 25th
day is not a Business Day, the next succeeding Business Day, commencing in April
2005.

                                     - 24 -
<PAGE>
         Due Date: With respect to any Distribution Date and any Mortgage Loan,
the day during the related Due Period on which a Scheduled Payment is due.

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

         Eligible Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the corporate trust
department of a national bank or banking corporation which has a rating of at
least A-1 by S&P or F1 by Fitch, or (iii) an account or accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or accounts, acceptable
to each Rating Agency without reduction or withdrawal of the rating of any Class
of Certificates, as evidenced in writing, by a depository institution in which
such accounts are insured by the FDIC (to the limit established by the FDIC),
the uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee,
the NIMs Insurer and each Rating Agency, the Certificateholders have a claim
with respect to the funds in such account and a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (v) maintained at an eligible institution whose commercial paper,
short-term debt or other short-term deposits are rated at least A-1+ by S&P and
F-1+ by Fitch, or (vi) maintained with a federal or state chartered depository
institution the deposits in which are insured by the FDIC to the applicable
limits and the short-term unsecured debt obligations of which (or, in the case
of a depository institution that is a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated A-1 by
S&P or Prime-1 by Moody's at the time any deposits are held on deposit therein,
(vii) a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity, that is acceptable to the Rating Agencies or (viii) otherwise
acceptable to each Rating Agency, as evidenced by a letter from each Rating
Agency to the Trustee and the NIMs Insurer.

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

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

         ERISA Restricted Certificates: The Class C, Class P and Class R
Certificates and any other Certificate, unless the acquisition and holding of
such other Certificate is covered by and exempt under the Underwriter's
exemption.

         Event of Default:  As defined in Section 7.01 hereof.

         Excess Interest: On any Distribution Date, for each Class of the Class
A, Class M and Class B Certificates, the excess, if any, of (1) the amount of
interest such Class of Certificates is entitled to receive on such Distribution
Date at its Pass-Through Rate over (2) the amount of interest such Class of

                                     - 25 -
<PAGE>
Certificates would have been entitled to receive on such Distribution Date had
the Pass-Through Rate for such Class been the REMIC Pass-Through Rate.

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

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

         Extra Principal Distribution Amount: With respect to any Distribution
Date, (1) prior to the Stepdown Date, the excess of (A) the sum of (i) the
Aggregate Certificate Principal Balance immediately preceding such Distribution
Date reduced by the Principal Funds with respect to such Distribution Date and
(ii) $2,086,678 over (B) the aggregate Stated Principal Balance of the Mortgage
Loans as of such Distribution Date and (2) on and after the Stepdown Date, (A)
the sum of (x) the Aggregate Certificate Principal Balance immediately preceding
such Distribution Date, reduced by the Principal Funds with respect to such
Distribution Date and (y) the greater of (a) 1.00% of the aggregate Stated
Principal Balance of the Mortgage Loans and (b) the Minimum Required
Overcollateralization Amount less (B) the aggregate Stated Principal Balance of
the Mortgage Loans as of such Distribution Date; provided, however, that if on
any Distribution Date a Stepdown Trigger Event is in effect, the Extra Principal
Distribution Amount will not be reduced to the applicable percentage of the
then-current aggregate Stated Principal Balance of the Mortgage Loans (and will
remain fixed at the applicable percentage of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Due Date immediately prior to the
Stepdown Trigger Event) until the next Distribution Date on which the Stepdown
Trigger Event is not in effect.

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

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

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

         Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate which is fixed.

         Floating Rate Certificate Carryover: With respect to a Distribution
Date, in the event that the Pass-Through Rate for a class of Class A, Class M or
Class B Certificates is based upon the related Available Funds Cap, the excess
of (1) the amount of interest that such Class would have been entitled to
receive on such Distribution Date had the Pass-Through Rate for that Class not
been calculated based on the related Available Funds Cap, up to but not
exceeding greater of (x) the related Maximum Rate Cap or (y) the sum of (i) the
related Available Funds Cap and (ii) the product of (A) a fraction, the
numerator of which is 360 and the denominator of which is the actual number of
days in the related Accrual Period and (B) the quotient obtained by dividing (I)
an amount equal to the proceeds, if any, payable under the related Cap Contract
with respect to such Distribution Date by (II) the aggregate Certificate
Principal Balance of each of the Classes of Certificates to which such Cap
Contract relates for such Distribution Date over (2) the amount of interest such
class was entitled to receive on such Distribution Date based on the related
Available Funds Cap, together with (i) the unpaid portion of any such excess
from prior Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate, without giving

                                     - 26 -
<PAGE>
effect to the applicable Available Funds Cap) and (ii) any amount previously
distributed with respect to Floating Rate Certificate Carryover for such class
that is recovered as a voidable preference by a trustee in bankruptcy.

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

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

         Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.

         Group One: The portion of the Mortgage Pool identified as "Group One"
in the Prospectus Supplement.

         Group One Mortgage Loan: Any Mortgage Loan at any time identified in
the Group One Mortgage Loan Schedule attached hereto as Exhibit B-2.

         Group One Principal Distribution Amount: As of any Distribution Date,
the amount equal to the lesser of (i) the aggregate Certificate Principal
Balance of the Class A-1 and Class R Certificates and (ii) the product of (x)
the Group One Principal Distribution Percentage and (y) the Class A Principal
Distribution Amount; provided, however, that with respect to any Distribution
Date on which the Class A-1 and Class R Certificates are outstanding and the
Certificate Principal Balance of the Class A-2 Certificates has been reduced to
zero, the Group One Principal Distribution Amount will equal the Class A
Principal Distribution Amount.

         Group One Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds received with respect to Mortgage Loans in
Group One and the denominator of which is the amount of Principal Funds received
from all of the Mortgage Loans in the mortgage pool.

         Group Two: The portion of the Mortgage Pool identified as "Group Two"
in the Prospectus Supplement.

         Group Two Mortgage Loan: Any Mortgage Loan at any time identified in
the Group Two Mortgage Loan Schedule attached hereto as Exhibit B-3.

         Group Two Principal Distribution Amount: As of any Distribution Date,
the amount equal to the lesser of (i) the aggregate Certificate Principal
Balance of the Class A-2 Certificates and (ii) the product of (x) the Group Two
Principal Distribution Percentage and (y) the Class A Principal Distribution
Amount; provided, however, that with respect to any Distribution Date on which
the Class A-2 Certificates are outstanding and the Certificate Principal
Balances of the Class A-1 and Class R Certificates have been reduced to zero,
the Group Two Principal Distribution Amount will equal the Class A Principal
Distribution Amount.

         Group Two Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds received with respect to Mortgage Loans in
Group Two and the denominator of which is the amount of Principal Funds received
from all of the Mortgage Loans in the mortgage pool.

                                     - 27 -
<PAGE>
         Indenture: An indenture relating to the issuance of notes guaranteed by
the NIMs Insurer.

         Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.

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

         Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.

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

         Insurance Policy: With respect to any Mortgage Loan or the related
Mortgaged Property (or the related Underlying Mortgaged Property, in the case of
a Co-op Loan) included in the Trust Fund, any insurance policy, including all
riders and endorsements thereto in effect with respect to such Mortgage Loan or
Mortgaged Property (or related Underlying Mortgage Property, in the case of a
Co-op Loan), including any replacement policy or policies for any insurance
policies, including, without limitation, the MI Policies.

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

         Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to a Mortgage Loan or the related Mortgaged
Property (or the related Underlying Mortgaged Property, in the case of a Co-op
Loan).

         Interest Carry Forward Amount: Any of the Class A-1A Interest Carry
Forward Amount, the Class A-1B Interest Carry Forward Amount, the Class A-2A
Interest Carry Forward Amount, the Class A-2B Interest Carry Forward Amount, the
Class A-2C Interest Carry Forward Amount, the Class R Interest Carry Forward
Amount, the Class M-1 Interest Carry Forward Amount, the Class M-2 Interest
Carry Forward Amount, the Class M-3 Interest Carry Forward Amount, the Class B-1
Interest Carry Forward Amount, the Class B-2 Interest Carry Forward Amount, the
Class B-3 Interest Carry Forward Amount, the Class B-4 Interest Carry Forward
Amount, the Class B-5 Interest Carry Forward Amount or the Class C Interest
Carry Forward Amount, as the case may be.

         Interest Determination Date: With respect to the Certificates, (i) for
any Accrual Period other than the first Accrual Period, the second LIBOR
Business Day preceding the commencement of such Accrual Period and (ii) for the
first Accrual Period, April 19, 2005.

                                     - 28 -
<PAGE>
         Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the Servicing Fee, (2) all Advances
relating to interest with respect to the Mortgage Loans and such Distribution
Date, (3) all Compensating Interest with respect to the Mortgage Loans and such
Distribution Date, (4) Liquidation Proceeds with respect to the Mortgage Loans
(to the extent such Liquidation Proceeds relate to interest) collected during
the related Prepayment Period, (5) all proceeds of any purchase pursuant to
Section 2.02 or 2.03 during the related Prepayment Period or pursuant to Section
9.01 not later than the related Determination Date (to the extent that such
proceeds relate to interest) less the Servicing Fee, (6) all Prepayment Charges
received with respect to the Mortgage Loans during the related Prepayment Period
and (7) refunds, if any, of amounts paid to either of the MI Insurers as MI
Insurer Fees, less (A) all Non-Recoverable Advances relating to interest and (B)
other amounts reimbursable to the Servicer and the Trustee pursuant to this
Agreement.

         Latest Possible Maturity Date: The latest maturity date for any
Mortgage Loan in the Trust Fund plus one year.

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

         Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that either (a) pursuant to Section 3.12 has been realized upon or
liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee's sale
or other realization as provided by applicable law governing the real property
subject to the related Mortgage and any security agreements and as to which the
Servicer has certified (in accordance with Section 3.12) in the related
Prepayment Period that it has received all amounts it expects to receive in
connection with such liquidation or (b) as to which is not a first lien Mortgage
Loan and is delinquent 180 days or longer, the Servicer has certified in a
certificate of an officer of the Servicer delivered to the Depositor and the
Trustee that it does not believe that there is a reasonable likelihood that any
further net proceeds will be received or recovered with respect to such Mortgage
Loan.

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

         Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the lesser
of (X) the Appraised Value of the related Mortgaged Property (or applicable
dwelling unit, in the case of a Co-op Loan) and (Y) the sales price of the
related Mortgaged Property (or applicable dwelling unit, in the case of a Co-op
Loan) at the time of origination.

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

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

         Lower Tier REMIC Interests: Each of the Class LTA-1A Interest, the
Class LTA-1B Interest, the Class LTA-2A Interest, the Class LTA-2B Interest, the
Class LTA-2C Interest, the Class LTM-1 Interest,

                                     - 29 -
<PAGE>
the Class LTM-2 Interest, the Class LTM-3 Interest, the Class LTB-1 Interest,
the Class LTB-2 Interest, the Class LTB-3 Interest, the Class LTB-4 Interest,
the Class LTB-5 Interest, the Class LTIX Interest, the Class LTIIX Interest, the
Class LTII1A Interest, the Class LTII1B Interest, the Class LTII2A Interest, the
Class LTII2B Interest and the Class LTR Interest.

         Lower Tier REMIC I Marker Interests: Each of the classes of Lower Tier
REMIC Regular Interests other than the Class LTIX Interest, the Class LTIIX
Interest, the Class LTII1A Interest, the Class LTII1B Interest, the Class LTII2A
Interest, the Class LTII2B Interest.

         Lower Tier REMIC II Marker Interests: Each of the Class LTII1A
Interest, the Class LTII1B Interest, the Class LTII2A Interest and the Class
LTII2B Interest.

         Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC
Interests other than the Class LTR Interest.

         Lower Tier REMIC Subordinated Balance Ratio: The ratio of (i) the
principal balance of the Class LTII1A Interest to (ii) the principal balance of
the Class LTII2A Interest that is equal to the ratio of (i) the excess of (A)
the aggregate Stated Principal Balance of Group One over (B) the current
Certificate Principal Balance of the Class A-1 and Class R Certificates to (ii)
the excess of (A) the aggregate Stated Principal Balance of Group Two over (B)
the current Certificate Principal Balance of the Class A-2 Certificates.

         Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the maximum rate of interest set forth as such in the related Mortgage
Note and with respect to each Fixed Rate Mortgage Loan, the rate of interest set
forth in the related Mortgage Note.

         Maximum Rate Cap: Any of the Class A-1 Maximum Rate Cap, the Class A-2
Maximum Rate Cap or the Subordinated Certificate Maximum Rate Cap.

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

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

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

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

         MI Insurer Fee: The amount payable to the related MI Insurer on each
Distribution Date, which amount shall equal one-twelfth of the product of (i)
the related MI Insurer Fee Rate and (ii) the Stated Principal Balance of the
applicable MI Mortgage Loan (or the related REO Property) as of the first day of
the related Due Period.

         MI Insurer Fee Rate: With respect to each MI Mortgage Loan, the rate
specified for such Mortgage Loan on the schedule attached to the related MI
Policy, plus a rate computed so that the related MI Insurer Fee would make the
related MI Insurer whole for any taxes imposed on such MI Insurer by the States
of [Kentucky or West Virginia] with respect to MI Mortgage Loans located in such
States, which rate shall be provided to the Trustee by the applicable MI
Insurer.

         MI Insurers:  PMI and MGIC.

                                     - 30 -
<PAGE>
         MI Mortgage Loans: The list of Mortgage Loans insured by the MI
Insurers attached hereto as Exhibit B-4.

         MI Policies: (A) The PMI Bulk Primary MI Policy # 22510-0003-0 and all
endorsements thereto, with an effective date of March 1, 2005, with respect to
the MI Mortgage Loans insured by PMI, which is attached hereto as Exhibit Q-1
and (B) the MGIC Mortgage Guaranty Master Policy for Multiple Loan Transactions
# 22-400-4-3203 and the related Terms Letter and all endorsements thereto, with
an effective date of March 1, 2005, with respect to the MI Mortgage Loans
insured by MGIC, which is attached hereto as Exhibit Q-2.

         MIN:  The loan number for any MERS Loan.

         Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.

         Minimum Required Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.

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

         Monthly Excess Interest Amount: With respect to each Distribution Date,
the amount, if any, by which the Interest Funds for such Distribution Date
exceeds the aggregate amount distributed on such Distribution Date pursuant to
Section 4.04(b) (other than the last clause thereof).

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

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

         Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument with all riders attached thereto
creating a first or second lien or a first or second priority ownership interest
in an estate in fee simple in real property securing a Mortgage Note. With
respect to a Co-op Loan, the security agreement with all riders attached thereto
creating a security interest in the stock allocated to a dwelling unit in a
residential cooperative housing corporation and pledged to secure such Co-op
Loan and the related Co-op Lease.

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

         Mortgage Group:  Either of Group One or Group Two.

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

         Mortgage Loan Schedule: The lists of Mortgage Loans (as from time to
time amended by the Trustee to reflect the deletion of Deleted Mortgage Loans
and the addition of Replacement Mortgage

                                     - 31 -
<PAGE>
Loans pursuant to the provisions of this Agreement) transferred to the Trustee
as part of the Trust Fund and from time to time subject to this Agreement,
attached hereto as Exhibits B-1, B-2, B-3 and B-4, setting forth the following
information with respect to each Mortgage Loan:

         (i)      the loan number;

         (ii)     the borrower name and address;

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

         (iv)     the Initial Mortgage Rate;

         (v)      the original maturity date and the months remaining before
                  maturity date;

         (vi)     the original principal balance;

         (vii)    the Cut-off Date Principal Balance;

         (viii)   the first payment due date of the Mortgage Loan;

         (ix)     the Loan-to-Value Ratio at origination with respect to a first
                  lien Mortgage Loan, or the Combined Loan-to-Value Ratio with
                  respect to a second lien Mortgage Loan;

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

         (xi)     a code indicating the property type;

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

                  (A)      the frequency of each Adjustment Date;

                  (B)      the next Adjustment Date;

                  (C)      the Maximum Mortgage Rate;

                  (D)      the Minimum Mortgage Rate;

                  (E)      the Mortgage Rate as of the Cut-off Date;

                  (F)      the related Periodic Rate Cap;

                  (G)      the Gross Margin;

                  (H)      the lifetime rate cap;

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

         (xiv) a code indicating whether a Prepayment Charge is applicable and,
      if so the term of such Prepayment Charge;

                                     - 32 -
<PAGE>
                  (xv)     the Credit Score and date obtained;

                  (xvi)    the MIN;

                  (xvii)   a code indicating whether such loan is an MI Mortgage
                           Loan;

                  (xviii)  each MI Insurer Fee Rate; and

                  (xix)    the coverage percentage under the applicable MI
                           Policy.

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

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

         Mortgaged Property: The underlying property securing a Mortgage Loan.

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

         Mortgagor:  The obligor on a Mortgage Note.

         Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the then current Mortgage Rate less the sum of (1) the
Servicing Fee Rate and (2) the MI Insurer Fee Rate, if applicable.

         Net Rate: With respect to any Distribution Date, the product of (x) the
weighted average Net Mortgage Rate for the Mortgage Loans calculated based on
the respective Net Mortgage Rates and the Stated Principal Balances of such
Mortgage Loans as of the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Cut-off Date) and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.

         Net WAC: With respect to any Distribution Date and any Mortgage Group,
a per annum rate equal to 12 times the quotient obtained by dividing (x) the
total scheduled interest on the Mortgage Loans in such Mortgage Group based on
the Net Mortgage Rates in effect on the related Due Date by (y) the aggregate
Stated Principal Balance of the Mortgage Loans in such Mortgage Group as of the
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the Cut-off Date).

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

         NIMs Insurer: Any of the one or more insurers, if any, that is
guaranteeing certain payments under any NIM Notes; provided, that upon the
payment in full of the NIM Notes, all rights of the NIMs Insurer hereunder shall
terminate.

         NIMs Insurer Default:  As defined in Section 10.12.

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

                                     - 33 -
<PAGE>
         Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise with respect to the related
Mortgage Loan.

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

         Offered Certificates: The Class A-1, Class A-2, Class M, Class B-1,
Class B-2, Class B-3 and Class R Certificates.

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

         One-Month LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of (a) the offered rates for one-month United States dollar deposits, as
such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on such
Interest Determination Date or (b) if such rate does not appear on Telerate Page
3750 as of 11:00 a.m. (London time), the offered rates of the Reference Banks
for one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Trustee as follows:

                  (i)      If on such Interest Determination Date two or more
                           Reference Banks provide such offered quotations,
                           One-Month LIBOR for the related Accrual Period shall
                           be the arithmetic mean of such offered quotations
                           (rounded upwards if necessary to the nearest whole
                           multiple of 0.03125%).

                  (ii)     If on such Interest Determination Date fewer than two
                           Reference Banks provide such offered quotations,
                           One-Month LIBOR for the related Accrual Period shall
                           be the higher of (i) One-Month LIBOR as determined on
                           the previous Interest Determination Date and (ii) the
                           Reserve Interest Rate.

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

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

                                     - 34 -
<PAGE>
         Optional Termination Amount: The amount received by the Trustee in
connection with any purchase of all of the Mortgage Loans and REO Properties
pursuant to Section 9.01(b) hereof.

         Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that has
become an REO Property) as of the Distribution Date on which the proceeds of the
Optional Termination are distributed to the Certificateholders, plus accrued
interest thereon at the applicable Mortgage Rate as of the Due Date preceding
the Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Trustee (including any
reasonable fees and expenses incurred by the Trustee in connection with
conducting the Auction) or the Servicer and any unpaid or unreimbursed Servicing
Fees, Advances and Servicing Advances and (C) any unreimbursed costs, penalties
and/or damages incurred by the Trust Fund in connection with any violation
relating to any of the Mortgage Loans of any predatory or abusive lending law.

         OTS:  The Office of Thrift Supervision.

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

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

         Overcollateralization Amount: As of any date of determination, the
excess of (1) the Stated Principal Balance of the Mortgage Loans over (2) the
Certificate Principal Balance of the Certificates (other than the Class P
Certificates and the Class C Certificates).

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

         Pass-Through Rate: With respect to any Class of Certificates, the
corresponding Pass-Through Rate for such Class of Certificates.

         Percentage Interest:  With respect to:

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

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

                                     - 35 -
<PAGE>
                           Class; except that in the case of any Class P
                           Certificates, the Percentage Interest with respect to
                           such Certificate shown on the face of such
                           Certificate.

         Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related Mortgage Note, the provision therein that limits permissible increases
and decreases in the Mortgage Rate on any Adjustment Date.

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

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

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

                  (iii)    receiving collections on the Mortgage Loans and the
                           Cap Contracts and making payments on such
                           Certificates and interests in accordance with the
                           terms of this Agreement; and

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

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

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

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

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

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

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

                                     - 36 -
<PAGE>
                  (vi)     guaranteed reinvestment agreements issued by any
                           bank, insurance company or other corporation rated in
                           the two highest long-term or the highest short-term
                           ratings of each Rating Agency containing, at the time
                           of the issuance of such agreements, such terms and
                           conditions as will not result in the downgrading or
                           withdrawal of the rating then assigned to the
                           Certificates by any such Rating Agency as evidenced
                           by a letter from each Rating Agency;

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

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

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

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

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

         Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an

                                     - 37 -
<PAGE>
organization (except certain farmers' cooperatives described in Section 521 of
the Code) that is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by Section 511 of the Code on unrelated business taxable income)
on any excess inclusions (as defined in Section 860E(c)(1) of the Code) with
respect to the Class R Certificate, (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, and (v) a Person
that is not a citizen or resident of the United States, a corporation or
partnership (or other entity treated as a corporation or partnership for United
States federal income tax purposes) created or organized in or under the laws of
the United States or any State thereof or the District of Columbia or an estate
whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust,
unless, in the case of this clause (v), such Person has furnished the transferor
and the Trustee with a duly completed Internal Revenue Service Form W-8ECI or
applicable successor form. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in Section 7701 of the Code. A
corporation will not be treated as an instrumentality of the United States or of
any State thereof for these purposes if all of its activities are subject to tax
and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such government unit.

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

         PMI: PMI Mortgage Insurance Co., an Arizona insurance corporation, or
its successor in interest.

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

         Preference Claim:  The meaning set forth in Section 4.04(j) hereof.

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

         Prepayment Charges: Any prepayment premium, fee or charge payable by a
Mortgagor in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note or Mortgage, as applicable,
as identified on the Mortgage Loan Schedule.

         Prepayment Interest Excess: With respect to any Servicer Remittance
Date, for each Mortgage Loan that was the subject of a partial Principal
Prepayment or a Principal Prepayment in full during the portion of the related
Prepayment Period occurring between the first day of the calendar month in which
such Servicer Remittance Date occurs and the last day of the related Prepayment
Period, an amount equal to interest (to the extent received) at the applicable
Net Mortgage Rate on the amount of such Principal Prepayment for the number of
days commencing on the first day of the calendar month in which such Servicer
Remittance Date occurs and ending on the date on which such Principal Prepayment
is so applied.

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

                                     - 38 -
<PAGE>
such Mortgage Loan as of the preceding Distribution Date or in the case of a
partial Principal Prepayment, on the amount of such prepayment, exceeds (ii) the
amount of interest paid or collected in connection with such Principal
Prepayment.

         Prepayment Period: As to any Distribution Date, the period beginning
with the opening of business on the 15th day of the calendar month preceding the
month in which such Distribution Date occurs (or in the case of the first
Distribution Date, beginning with the opening of business on the Cut-off Date)
and ending on the close of business on the 14th day of the month in which such
Distribution Date occurs.

         Principal Distribution Amount: With respect to each Distribution Date,
the sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.

         Principal Funds: With respect to the Mortgage Loans and any
Distribution Date, the sum, without duplication, of (1) all scheduled principal
due during the related Due Period and received before the related Servicer
Remittance Date or advanced on or before the related Servicer Remittance Date,
(2) all Principal Prepayments collected in the related Prepayment Period, (3)
the Stated Principal Balance of each Mortgage Loan that was purchased by the
Depositor or the Servicer during the related Prepayment Period or, in the case
of a purchase pursuant to Section 9.01, on any Business Day prior to such
Distribution Date, (4) the amount, if any, by which the aggregate unpaid
principal balance of any Replacement Mortgage Loan is less than the aggregate
unpaid principal of the related Deleted Mortgage Loans delivered by the Seller
in connection with a substitution of a Mortgage Loan pursuant to Section
2.03(c), (5) all Liquidation Proceeds collected during the related Prepayment
Period (to the extent such Liquidation Proceeds related to principal), (6) all
Subsequent Recoveries received during the related Due Period and (7) all other
collections and recoveries in respect of principal during the related Prepayment
Period less (A) all Non-Recoverable Advances relating to principal with respect
to the Mortgage Loans and (B) all other amounts reimbursable to the Servicer and
the Trustee pursuant to this Agreement and allocable to principal.

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

         Prospectus Supplement: The Prospectus Supplement dated April 19, 2005
relating to the public offering of the Offered Certificates.

         PUD:  A Planned Unit Development.

         Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller or the applicable Transferor pursuant to Section 2.02
or 2.03 hereof, an amount equal to the sum of (i) 100% of the unpaid principal
balance of the Mortgage Loan as of the date of such purchase together with any
related unreimbursed Servicing Advances, (ii) accrued interest thereon at the
applicable Mortgage Rate from (a) the date through which interest was last paid
by the Mortgagor to (b) the Due Date in the month in which the Purchase Price is
to be distributed to Certificateholders and (iii) any unreimbursed costs,
penalties and/or damages incurred by the Trust Fund (or the Trustee on behalf of
the Trust Fund) in connection with any violation relating to such Mortgage Loan
of any predatory or abusive lending law.

                                     - 39 -
<PAGE>
         Rating Agency: Any of Fitch, S&P or Moody's. If any such organization
or its successor is no longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Trustee. References herein to a given rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers.

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

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

         Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A.,
Citibank, N.A., Wells Fargo Bank, N.A. and NatWest, N.A.; provided that if any
of the foregoing banks are not suitable to serve as a Reference Bank, then any
leading banks selected by the Trustee with the consent of the NIMs Insurer which
are engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London, England
and (ii) whose quotations appear on the Reuters Screen LIBO Page on the relevant
Interest Determination Date and (iii) which have been designated as such by the
Servicer.

         Regular Certificate: Any one of the Class A, Class M, and Class B
Certificates.

         Relief Act: The Servicemembers Civil Relief Act or any similar state or
local law.

         Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.

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

         REMIC Pass-Through Rate: The Class A-1 Available Funds Cap (in the case
of a Class included in Certificate Group One), the Class A-2 Available Funds Cap
(in the case of a Class included in Certificate Group Two) or the Subordinated
Certificate Available Funds Cap (in the case of the Subordinated Certificates).

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

                                     - 40 -
<PAGE>
         REMIC Regular Interests: (i) any of the rights under any of the
Certificates (other than the Class P Certificates, the Class R Certificate and
the Class C Certificates) other than the rights in interest rate cap contracts
described in Section 2.07 and (ii) the Uncertificated Class C Interest.

         Remittance Report:  As defined in Section 4.04(j) hereof.

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

         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 of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (F) currently be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (3) have a similar or higher FICO score or credit grade
than that of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio (or
Combined Loan-to-Value Ratio, in the case of the Mortgage Loans in a second lien
position) no higher than that of the Deleted Mortgage Loan; (5) have a remaining
term to maturity no greater than (and not more than one year less than) that of
the Deleted Mortgage Loan; (6) provide for a Prepayment Charge on terms
substantially similar to those of the Prepayment Charge, if any, of the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan; (9) be covered
by the applicable MI Policy if such Deleted Mortgage Loan was covered by such MI
Policy; and (10) comply with each representation and warranty set forth in
Section 2.03 hereof.

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

         Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement including, without limitation, in case of any MI Mortgage Loan, the
applicable MI Policy.

         Required Percentage: As of any Distribution Date, the quotient of (1)
the excess of (A) the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date, over (B) the Certificate Principal Balance of the most senior
Class of Certificates outstanding as of such Distribution Date, prior to giving
effect to distributions to be made on such Distribution Date and (2) the Stated
Principal Balance of the Mortgage Loans as of such Distribution Date. As used
herein, on any Distribution Date when any of the Class A Certificates are
outstanding, the Certificate Principal Balance of the most senior Class of
Certificates will equal the aggregate Certificate Principal Balance of the Class
A Certificates as of such date of calculation.

                                     - 41 -
<PAGE>
         Reserve Interest Rate: With respect to any Interest Determination Date,
the rate per annum that the Trustee determines to be (1) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 0.03125%) of the
one-month United States dollar lending rates which New York City banks selected
by the Trustee are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or (2)
in the event that the Trustee can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate which New York City banks selected
by the Trustee are quoting on such Interest Determination Date to leading
European banks.

         Residual Excess Interest Amount: With respect to any Distribution Date,
the excess of (x) 0.05% of the Monthly Excess Interest Amount for such
Distribution Date and all prior Distribution Dates over (y) all payments
previously made to the Class R Certificate in respect of the Residual Excess
Interest Amount.

         Residual Interest: An interest in the Upper Tier REMIC that is entitled
to all distributions of principal and interest on the Class R Certificate other
than distributions in respect of the Class LTR Interest and distributions on the
Class R Certificate in respect of Excess Interest.

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

         Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.

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

         Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated
as of March 1, 2005 between the Depositor and the Seller.

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

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

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

         Seller: Merrill Lynch Mortgage Capital, Inc., a Delaware corporation,
or its successors in interest.

         Servicer: Wilshire Credit Corporation, a Nevada corporation, or its
successor in interest.

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

         Servicer Remittance Date: With respect to any Distribution Date, the
later of two Business Days after the 15th day of the month in which such
Distribution Date occurs and the 18th day (or if such day is not a Business Day,
the next succeeding Business Day) of the month in which such Distribution Date
occurs.

                                     - 42 -
<PAGE>
         Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance of the Servicer's
servicing obligations hereunder, including, but not limited to, the cost of (1)
the preservation, inspection, restoration and protection of a Mortgaged Property
(or Underlying Mortgaged Property, in the case of a Co-op Loan), including
without limitation advances in respect of real estate taxes and assessments, (2)
any collection, enforcement or judicial proceedings, including without
limitation foreclosures, collections and liquidations, (3) the conservation,
management, sale and liquidation of any REO Property, (4) executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments of
Mortgage to the extent not otherwise recovered from the related Mortgages or
payable under this Agreement, (5) correcting errors of prior servicers; costs
and expenses charged to the Servicer by the Trustee; tax tracking; title
research; flood certifications; lender paid mortgage insurance, (6) obtaining or
correcting any legal documentation required to be included in the Mortgage Files
and reasonably necessary for the Servicer to perform its obligations under this
Agreement and (7) compliance with the obligations under Sections 3.01 and 3.10;
provided that such amounts are required to be advanced only to the extent such
advances constitute "unanticipated expenses" within the meaning of Treasury
Regulation Section 1.860G-1(b)(3)(ii).

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

         Servicing Fee Rate:  0.50% per annum.

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

         Servicing Transfer Costs: 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 properly and effectively.

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

         Startup Day:  As defined in Section 2.07 hereof.

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

                                     - 43 -
<PAGE>
applied by the Servicer as recoveries of principal in accordance with Section
3.12 with respect to such Mortgage Loan, that were received by the Servicer as
of the close of business on the last day of the related Due Period.
Notwithstanding the foregoing, the Stated Principal Balance of a Liquidated Loan
shall be deemed to be zero.

         Stepdown Date: The later to occur of (1) the Distribution Date in April
2008 or (2) the first Distribution Date on which (A) the Class A Certificate
Principal Balance (reduced by the Principal Funds with respect to such
Distribution Date) is less than or equal to (B) 73.90% of the Stated Principal
Balances of the Mortgage Loans as of such Distribution Date.

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

<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN                 STEPDOWN REQUIRED LOSS
------------------------------                 ----------------------
                                               PERCENTAGE
                                               ----------
<S>                                            <C>
April 2008 - March 2009                        1.50% with respect to April 2008, plus
                                               an additional 1/12th of 0.50% for each
                                               month thereafter
April 2009 - March 2010                        2.00% with respect to April 2009, plus
                                               an additional 1/12th of 0.75% for each
                                               month thereafter
April 2010 - March 2011                        2.75% with respect to April 2010, plus
                                               an additional 1/12th of 0.25% for each
                                               month thereafter
April 2011 and thereafter                      3.00%
</TABLE>

         Stepdown Trigger Event: With respect to the Certificates on or after
the Stepdown Date, a Distribution Date on which (1) the quotient of (A) the
aggregate Stated Principal Balance of all Mortgage Loans which are 60 or more
days Delinquent measured on a rolling three month basis (including, for the
purposes of this calculation, Mortgage Loans in foreclosure and REO Properties
and Mortgage Loans with respect to which the applicable Mortgagor is in
bankruptcy) and (B) the Stated Principal Balance of the Mortgage Loans as of the
preceding Servicer Remittance Date, equals or exceeds the product of (i) 40.00%
and (ii) the Required Percentage or (2) the quotient (expressed as a percentage)
of (A) the aggregate Realized Losses incurred from the Cut-off Date through the
last day of the calendar month preceding such Distribution Date and (B) the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date exceeds
the Stepdown Required Loss Percentage.

         Subordinated Certificate Available Funds Cap: With respect to a
Distribution Date, the per annum rate equal to the weighted average (weighted in
proportion to the results of subtracting the current Certificate Principal
Balance of the related Class A Certificates from the aggregate Stated Principal
Balance of the Mortgage Loans in each Mortgage Group as of the immediately
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the Cut-off Date) of the Class A-1 Available Funds Cap and the Class A-2
Available Funds Cap.

         Subordinated Certificate Cap Contract: The amended confirmation and
agreement and any related confirmation thereto, between the Trust Fund or
Trustee and the Cap Contract Counterparty (in the form of Exhibit N-3 hereto).

                                     - 44 -
<PAGE>
         Subordinated Certificate Cap Contract Notional Balance: With respect to
any Distribution Date, the Subordinated Certificate Cap Contract Notional
Balance set forth for such Distribution Date in the Subordinated Certificate
One-Month LIBOR Cap Table attached hereto as Exhibit O-3.

         Subordinated Certificate Cap Contract Termination Date: The day after
the Distribution Date in April 2011.

         Subordinated Certificate Maximum Rate Cap: With respect to a
Distribution Date, the per annum rate equal to the weighted average (weighted in
proportion to the results of subtracting from the aggregate Stated Principal
Balance of the Mortgage Loans in each Mortgage Group as of the immediately
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the Cut-off Date) the current Certificate Principal Balance of the related
Class A Certificates) of the Class A-1 Maximum Rate Cap and the Class A-2
Maximum Rate Cap.

         Subordinated Certificate Upper Collar: With respect to each
Distribution Date with respect to which payments are received on the
Subordinated Certificate Cap Contract, a rate equal to the lesser of One-Month
LIBOR and 8.320% per annum.

         Subordinated Certificates: Each Class of the Class M and Class B
Certificates.

         Subsequent Recovery: Any amount received on a Mortgage Loan (net of
amounts reimbursed to the Servicer related to such Mortgage Loan) subsequent to
such Mortgage Loan being determined to be a Liquidated Mortgage Loan.

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

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

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

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

         Transfer Agreement: Each document set out on Exhibit J hereto pursuant
to which the Seller acquired any Mortgage Loan from the Transferor of such
Mortgage Loan.

         Transferor:  Any originator of a Mortgage Loan.

         Trust Fund: The corpus of the trust (the "Merrill Lynch Mortgage
Investors Trust, Series 2005-HE1") created hereunder consisting of (i) the
Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Collection Account; (ii) the Collection Account and the
Certificate Account and all amounts deposited therein pursuant to the applicable
provisions of this Agreement; (iii) property that secured a Mortgage Loan and
has been acquired by foreclosure, deed in lieu of foreclosure or otherwise; (iv)
the mortgagee's rights under the Insurance Policies with respect to the Mortgage
Loans (including, without limitation, the MI Policies); (v) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property; and (vi) the Cap Contract and Cap Contract Account.

                                     - 45 -
<PAGE>
         Trustee: Wells Fargo Bank, N.A., a national banking association, not in
its individual capacity, but solely in its capacity as trustee for the benefit
of the Certificateholders under this Agreement, and any successor thereto, and
any corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.

         Uncertificated Class C Interest: An uncertificated interest having (i)
the same rights to payments as the Class C Certificates, other than the rights
to payments of amounts with respect to the Cap Contracts, and (ii) the rights to
the payments treated as distributed to the Class C Certificates under Section
2.07(d), provided, however, that such interest shall have no obligation to make
any payments treated as paid by the Class C Certificates pursuant to interest
rate cap agreements under Section 2.07(d).

         Underlying Mortgaged Property: With respect to each Co-op Loan, the
underlying real property owned by the related residential cooperative housing
corporation.

         Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized Loss Amount,
Class B-1 Unpaid Realized Loss Amount, Class B-2 Unpaid Realized Loss Amount,
Class B-3 Unpaid Realized Loss Amount, Class B-4 Unpaid Realized Loss Amount,
Class B-5 Unpaid Realized Loss Amount, and Class C Unpaid Realized Loss Amount,
collectively.

         Upper Collar: Any of the Class A-1 Upper Collar, the Class A-2 Upper
Collar or the Subordinated Certificate Upper Collar.

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

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

         Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated as follows: (1) 98% to the Class A, Class M and Class B
Certificates, with the allocation among such Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other Classes and (2) each Class of the Class C and
Class P will be allocated 2% of the Voting Rights. Voting Rights will be
allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests.

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

         Section 2.01. Conveyance of Mortgage Loans.

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

                                     - 46 -
<PAGE>
         It is agreed and understood by the Depositor, the Servicer and the
Trustee that it is not intended that any Mortgage Loan be included in the Trust
that is, without limitation, a "High-Cost Home Loan" as defined by the Home
Ownership and Equity Protection Act of 1994 or any other applicable
anti-predatory lending laws, including but not limited to (i) a "High-Cost Home
Loan" as defined in the New Jersey Home Ownership Act effective November 27,
2003; (ii) a "High-Cost Home Loan" as defined in the New Mexico Home Loan
Protection Act effective January 1, 2004; or (iii) a "High-Cost Home Loan" as
defined in the Massachusetts Predatory Home Loan Practices Act effective
November 7, 2004 or (iv) a "High-Cost Home Loan" as defined by the Indiana High
Cost Home Loan Law effective January 1, 2005.

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

            (A) The original Mortgage Note endorsed in blank or, "Pay to the
         order of Wells Fargo Bank, N.A., as trustee, without recourse" together
         with all riders thereto. The Mortgage Note shall include all
         intervening endorsements showing a complete chain of the title from the
         Transferor to [____________________];

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

            (C) In the case of each Mortgage Loan that is not a MERS Loan, the
         original Assignment of each Mortgage endorsed either in blank or, to
         "Wells Fargo Bank, N.A., as trustee;"

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

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

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

         (ii) In connection with such assignment, the Depositor does hereby
deliver to, and deposit with, the Trustee the following documents or instruments
with respect to each Mortgage Loan so assigned that is a Co-op Loan:

            (A) (i) The original Mortgage Note (or a lost note affidavit
         (including a copy of the original Mortgage Note)) or (ii) the original
         consolidation, extension and modification agreement

                                     - 47 -
<PAGE>
         (or a lost note affidavit (including a copy of the original
         consolidation, extension and modification agreement)), in either case
         endorsed either in blank or, "Pay to the order of Wells Fargo Bank,
         N.A., as trustee, without recourse";

            (B) The original Mortgage entered into by the Mortgagor with respect
         to such Co-Op Loan;

            (C) The original Assignment of Mortgage endorsed either in blank or
         to "Wells Fargo Bank, N.A., as trustee";

            (D) The original assignments of Mortgage showing a complete chain of
         assignment from the originator of the related Co-Op Loan to the last
         endorsee on the Mortgage Note;

            (E) The original Form UCC-1 and any continuation statements with
         evidence of filing thereon entered into by the Mortgagor with respect
         to such Co-Op Loan (or a recorded copy thereof);

            (F) Form UCC-3 (or copy thereof) by the Transferor or its agent
         assigning the security interest covered by such Form UCC-1 to "Wells
         Fargo Bank, N.A., as trustee," together with all Forms UCC-3 (or copies
         thereof) showing a complete chain of assignment from the originator of
         the related Co-op Loan to the Transferor, with evidence of recording
         thereon;

            (G) The original stock certificate representing the stock allocated
         to the related dwelling unit in the related residential cooperative
         housing corporation and pledged by the related Mortgagor to the
         originator of such Co-op Loan with a stock power in blank attached;

            (H) The original proprietary lease;

            (I) The original assignment of proprietary lease or a copy thereof,
         to the Trustee or in blank, and all intervening assignments thereof;

            (J) The original recognition agreement or a copy thereof of the
         interests of the mortgagee with respect to the Co-op Loan by the
         residential cooperative housing corporation, the stock of which was
         pledged by the related Mortgagor to the originator of such Co-op Loan;
         and

            (K) Originals of any assumption, consolidation or modification
         agreements relating to any of the items specified in (A) through (F)
         above with respect to such Co-op Loan.

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

                                     - 48 -
<PAGE>
         With respect to any Mortgage Loan that is not a Co-op Loan, none of the
Depositor, the Servicer or the Trustee shall be obligated to cause to be
recorded the Assignment of Mortgage referred to in this Section 2.01. With
respect to any Co-op Loan, none of the Depositor, the Servicer or the Trustee
shall be obligated to cause to be filed the Form UCC-3 referred to in this
Section 2.01. In the event that any Assignment of Mortgage referred to in this
Section 2.01 is not recorded or is improperly recorded, the Servicer and the
Trustee shall have no liability for any failure to receive or act on notices
related to such Assignment of Mortgage.

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

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

         In addition to the conveyance made in the first paragraph of this
Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee for the benefit of the Certificateholders its rights and interests under
the Sale Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement, the rights in
the Transfer Agreements described therein, and the benefit of the repurchase
obligations and the obligation of the Seller contained in the Sale Agreement to
take, at the request of the Depositor or the Trustee, all action on its part
which is reasonably necessary to ensure the enforceability of a Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be entitled to exercise
all rights of the Depositor under the Sale Agreement as if, for such purpose, it
were the Depositor. The foregoing sale, transfer, assignment, set-over, deposit
and conveyance does not and is not intended to result in creation or assumption
by the Trustee of any

                                     - 49 -
<PAGE>
obligation of the Depositor, the Seller, or any other Person in connection with
the Mortgage Loans or any other agreement or instrument relating thereto except
as specifically set forth herein.

         Section 2.02. Acceptance by the Trustee of the Mortgage Loans.

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

         The Trustee acknowledges receipt of the three Cap Contracts (forms of
which are attached hereto as Exhibits N-1, N-2 and N-3), the Transfer
Agreements, the Bring Down Letters and the Sale Agreement.

         The Trustee agrees, for the benefit of Certificateholders and the NIMs
Insurer, to review each Mortgage File delivered to it within 60 days after the
Closing Date to ascertain and to certify, within 70 days of the Closing Date, to
the NIMs Insurer, the Depositor and the Servicer that all documents required by
Section 2.01 have been executed and received, and that such documents relate to
the Mortgage Loans identified in Exhibit B that have been conveyed to it. If the
Trustee finds any document or documents constituting a part of a Mortgage File
to be missing or defective (that is, mutilated, damaged, defaced or unexecuted)
in any material respect, the Trustee shall promptly (and in any event within no
more than five Business Days) after such finding so notify the NIMs Insurer, the
Servicer, the Seller and the Depositor. In addition, the Trustee shall also
notify the NIMs Insurer, the Servicer, the Seller and the Depositor if the
original Mortgage with evidence of recording thereon with respect to a Mortgage
Loan is not received within 60 days of the Closing Date; if it has not been
received because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation, the Depositor shall deliver or
cause to be delivered to the Trustee written notice stating that such Mortgage
has been delivered to the appropriate public recording office for recordation
and thereafter the Depositor shall deliver or cause to be delivered such
Mortgage with evidence of recording thereon upon receipt thereof from the public
recording office. The Trustee shall request that the Seller correct or cure such
omission, defect or other irregularity, or substitute a Mortgage Loan pursuant
to the provisions of Section 2.03, within 90 days from the date the Seller was
notified of such omission or defect and, if the Seller does not correct or cure
such omission or defect within such period, that the Seller purchase such
Mortgage Loan from the Trust Fund within 90 days from the date the Trustee
notified the Seller of such omission, defect or other irregularity at the
Purchase Price of such Mortgage Loan. The Purchase Price for any Mortgage Loan
purchased pursuant to this Section 2.02 shall be paid to the Servicer and
deposited by the Servicer in the Certificate Account or Collection Account, as
appropriate, promptly upon receipt, and, upon receipt by the Trustee of written
notification of such deposit signed by a Servicing Officer, the Trustee, upon
receipt of a Request for Release, shall promptly release to the Seller the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment, without recourse, as shall be requested by the Seller
and necessary to vest in the Seller or its designee, as the case may be, any
Mortgage Loan released pursuant hereto, and the Trustee shall have no further
responsibility with regard to such Mortgage Loan. It is understood and agreed
that the obligation of the Seller to purchase, cure or substitute any Mortgage
Loan as to which a material defect in or omission of a constituent document
exists shall constitute the sole remedy respecting such defect or omission
available to the Trustee on behalf of Certificateholders and the NIMs Insurer.
The preceding sentence shall not, however, limit any

                                     - 50 -
<PAGE>
remedies available to the Certificateholders, the NIMs Insurer, the Depositor or
the Trustee pursuant to the Sale Agreement, the Transfer Agreements or any
Bring-Down Letter. The Trustee shall be under no duty or obligation to inspect,
review and examine such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, recordable or appropriate to the
represented purpose, or that they have actually been recorded, or that they are
other than what they purport to be on their face. The Servicer and the Trustee
shall keep confidential the name of each Mortgagor except as required for the
performance of this Agreement and the Servicer and the Trustee shall not solicit
any such Mortgagor for the purpose of refinancing the related Mortgage Loan;
notwithstanding anything herein to the contrary, the foregoing shall not be
construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, or information obtained by the Trustee or the Servicer
from sources other than the other parties hereto, (ii) disclosure of any and all
information (A) if required to do so by any applicable law, rule or regulation,
(B) to any government agency or regulatory body having or claiming authority to
regulate or oversee any aspects of the Trustee's business or that of its
affiliates, (C) pursuant to any subpoena, civil investigation demand or similar
demand or request of any court, regulatory authority, arbitrator or pursuant to
any arbitration to which Trustee or any affiliate or an officer, director,
employer or shareholder thereof is a party or (D) to any affiliate, independent
or internal auditor, agent, employee or attorney of the Trustee having a need to
know the same, provided that the Trustee advises such recipient of the
confidential nature of the information being disclosed, or (iii) any other
disclosure authorized by the Depositor. The Servicer shall provide to the
Depositor any information related to the Mortgage Loans requested by the
Depositor. It is understood and agreed that all rights and benefits relating to
the solicitation of any Mortgagors and the attendant rights, title and interest
in and to the list of Mortgagors and data relating to their Mortgages shall be
retained by the Servicer.

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

         Section 2.03. Representations, Warranties and Covenants of the
Depositor.

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

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

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

            (iii) The execution and delivery of this Agreement and the Sale
      Agreement by the Depositor, the consummation of the transactions
      contemplated by this Agreement and the Sale Agreement, and the fulfillment
      of or compliance with the terms hereof are in the ordinary course

                                     - 51 -
<PAGE>
      of business of the Depositor and will not (A) result in a material breach
      of any term or provision of the charter or by-laws of the Depositor or (B)
      materially conflict with, result in a violation or acceleration of, or
      result in a material default under, the terms of any other material
      agreement or instrument to which the Depositor is a party or by which it
      may be bound or (C) constitute a material violation of any statute, order
      or regulation applicable to the Depositor of any court, regulatory body,
      administrative agency or governmental body having jurisdiction over the
      Depositor; and the Depositor is not in breach or violation of any material
      indenture or other material agreement or instrument, or in violation of
      any statute, order or regulation of any court, regulatory body,
      administrative agency or governmental body having jurisdiction over it
      which breach or violation may materially impair the Depositor's ability to
      perform or meet any of its obligations under this Agreement.

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

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

         (b) The representations and warranties of each Transferor with respect
to the related Mortgage Loans in the applicable Transfer Agreement, which have
been assigned to the Trustee hereunder, were made as of the date specified in
the applicable Transfer Agreement and brought forward to the Closing Date
pursuant to the related Bring Down Letter. The representations and warranties of
each Transferor with respect to the Mortgage Loans contained in the Bring Down
Letter were made as of the Closing Date. The representations and warranties of
the Seller with respect to the Mortgage Loans contained in the Sale Agreement
were made as of the Closing Date. To the extent that any fact, condition or
event with respect to a Mortgage Loan constitutes a breach of both (i) a
representation or warranty of the applicable Transferor under the applicable
Transfer Agreement and (ii) a representation or warranty of the Seller under the
Sale Agreement, the only right or remedy of the Trustee, the NIMs Insurer or of
any Certificateholder shall be the Trustee's right to enforce the obligations of
the applicable Transferor under any applicable representation or warranty made
by it. Unless otherwise stated in the Sale Agreement, the Trustee acknowledges
that the Seller shall have no obligation or liability with respect to any breach
of a representation or warranty made by it with respect to the Mortgage Loans if
the fact, condition or event constituting such breach also constitutes a breach
of a representation or warranty made by the related Transferor in the related
Transfer Agreement, without regard to whether the Transferors fulfills its
contractual obligations in respect of such representation or warranty. The
Trustee also acknowledges that the Seller shall have no obligation or liability
with respect to any breach of a representation or warranty made solely by the
Transferors with respect to the Mortgage Loans, without regard to whether the
related Transferor fulfills its contractual obligations in respect of such
representation or warranty. The Trustee further acknowledges that the Depositor
shall have no obligation or liability with respect to any breach of any
representation or warranty with respect to the Mortgage Loans (except as set
forth in Section 2.03(a)(v)) under any circumstances.

                                     - 52 -
<PAGE>
         In addition to the representations and warranties of the Transferors in
the Transfer Agreements that were brought forward to the Closing Date pursuant
to the Bring Down Letters, with respect to each Mortgage Loan, each Transferor
made certain additional covenants regarding such Mortgage Loan, as set forth in
the related Transfer Agreement. With respect to any breach of such additional
covenants that materially and adversely affects the interests of the
Certificateholders in such Mortgage Loan, the Seller shall (1) use reasonable
efforts to enforce such covenant against the related Transferor and (2) if the
Seller successfully enforces any obligation of the related Transferor to
repurchase such Mortgage Loan, the Seller shall repurchase such Mortgage Loan in
accordance with this Section 2.03. If the Seller does not successfully enforce
the obligation, if any, of the Transferor to repurchase a Mortgage Loan with
respect to any breach of any such additional covenants, the Seller shall have no
obligation or right to repurchase or cure such Mortgage Loan.

         (c) Upon discovery by any of the Depositor, the Servicer, the NIMs
Insurer or the Trustee of a breach of any of such representations and warranties
that adversely and materially affects the value of the related Mortgage Loan,
Prepayment Charges or the interests of the Certificateholders, the party
discovering such breach shall give prompt written notice to the other parties.
Within 90 days of the discovery of such breach of any representation or
warranty, the applicable Transferor or the Seller, as applicable, shall either
(a) cure such breach in all material respects, (b) repurchase such Mortgage Loan
or any property acquired in respect thereof from the Trustee at the Purchase
Price or (c) within the two year period following the Closing Date, substitute a
Replacement Mortgage Loan for the affected Mortgage Loan. In the event of
discovery of a breach of any representation and warranty of any Transferor or
the Seller, the Trustee shall enforce its rights under the applicable Transfer
Agreement or the Sale Agreement for the benefit of Certificateholders and the
NIMs Insurer. If a breach of the representations and warranties set forth in a
Transfer Agreement exists solely due to the unenforceability of a Prepayment
Charge, the Trustee shall notify the NIMs Insurer thereof and not seek to
enforce the repurchase remedy provided for herein unless directed in writing to
do so by the NIMs Insurer. In the event of a breach of the representations and
warranties with respect to the Mortgage Loans set forth in a Transfer Agreement,
the Trustee shall, at the request of the NIMs Insurer, enforce the right of the
Trust Fund and the NIMs Insurer to be indemnified for such breach of
representation and warranty. In the event that such breach relates solely to the
unenforceability of a Prepayment Charge, amounts received in respect of such
indemnity up to the amount of such Prepayment Charge shall be distributed
pursuant to Section 4.04(b)(i). As provided in the Sale Agreement, if the
Transferor substitutes for a Mortgage Loan for which there is a breach of any
representations and warranties in the related Transfer Agreement which adversely
and materially affects the value of such Mortgage Loan and such substitute
mortgage loan is not a Replacement Mortgage Loan, under the terms of the Sale
Agreement, the Seller will, in exchange for such substitute Mortgage Loan, (i)
provide the applicable Purchase Price for the affected Mortgage Loan or (ii)
within two years of the Closing Date, substitute such affected Mortgage Loan
with a Replacement Mortgage Loan. Any such substitution shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit I and shall not be effected unless it is
within two years of the Startup Day. As provided in the Sale Agreement, the
Seller indemnifies and holds the Trust Fund, the Trustee, the Depositor, the
NIMs Insurer, the Servicer and each Certificateholder harmless against any and
all taxes, claims, losses, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Trust Fund, the Trustee, the Depositor, the NIMs Insurer, the Servicer and any
Certificateholder may sustain in connection with any actions of the Seller
relating to a repurchase of a Mortgage Loan other than in compliance with the
terms of this Section 2.03 and the Sale Agreement, to the extent that any such
action causes (i) any federal or state tax to be imposed on the Trust Fund or
any REMIC provided for herein, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup day" under Section 860G(d)(1) of the Code, or
(ii) any REMIC created hereunder to fail to qualify as a REMIC at any time that
any Certificate is outstanding. In furtherance of the foregoing, if the Seller
is not a member of MERS and repurchases a

                                     - 53 -
<PAGE>
Mortgage Loan which is registered on the MERS System, the Seller, at its own
expense and without any right of reimbursement, shall cause MERS to execute and
deliver an assignment of the Mortgage in recordable form to transfer the
Mortgage from MERS to the Seller and shall cause such Mortgage to be removed
from registration on the MERS System in accordance with MERS' rules and
regulations.

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

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

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

         Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee and the NIMs Insurer
shall have received an Opinion of Counsel (at the expense of the party seeking
to make the substitution) that, under current law, such substitution will not
(A) affect adversely the status of any

                                     - 54 -
<PAGE>
REMIC established hereunder as a REMIC, or of the related "regular interests" as
"regular interests" in any such REMIC, or (B) cause any such REMIC to engage in
a "prohibited transaction" or prohibited contribution pursuant to the REMIC
Provisions.

         The Trustee shall cause the Mortgage Loan Schedule to be amended in
accordance with the terms of this Agreement.

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

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

                  (e) The Depositor shall deliver a copy of the Mortgage Loan
Schedule to the Servicer on the Closing Date.

         Section 2.04. Representations and Warranties of the Servicer.

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

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

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

                                     - 55 -
<PAGE>
         of equitable relief may be subject to equitable defenses and to the
         discretion of the court before which any proceeding therefor may be
         brought.

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

            (v) The Servicer is an approved servicer of mortgage loans for
         Fannie Mae and is an approved servicer of mortgage loans for Freddie
         Mac.

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

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

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

            (ix) Unless otherwise indicated on Exhibit M, the Servicer has not
         by written agreement with the Mortgagor waived, altered, modified or
         released the Mortgage or Mortgage Note during such time as the Servicer
         serviced the related Mortgage Loan.

         Section 2.05. Substitutions and Repurchases of Mortgage Loans which are
not "Qualified Mortgages."

         Upon discovery by the Depositor, the Servicer or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party discovering such fact shall promptly
(and in any event within 5 Business Days of discovery) give written notice
thereof to the other parties. In connection therewith, the Depositor shall, at
the Depositor's option, either (i) substitute, if the conditions in Section
2.03(c) with respect to substitutions are satisfied, a Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage

                                     - 56 -
<PAGE>
Loan within 90 days of such discovery in the same manner as it would a Mortgage
Loan for a breach of representation or warranty contained in Section 2.03. The
Trustee shall reconvey to the Depositor the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.03.

         Section 2.06. Authentication and Delivery of Certificates.

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

         Section 2.07. REMIC Elections.

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

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

         The Lower Tier REMIC shall consist of all of the assets of the Trust
Fund, other than (i) amounts distributable to the Class P Certificates pursuant
to Section 4.04(b)(i) hereof, (ii) the interests issued by the Lower Tier REMIC,
(iii) the grantor trusts described in Section 2.07 hereof and (iv) each Cap
Contract and the Cap Contract Account. The Lower Tier REMIC shall issue the
Lower Tier REMIC Regular Interests which shall be designated as regular
interests of such REMIC and shall issue the Class LTR Interest that shall be
designated as the sole class of residual interest in the Lower Tier REMIC. Each
of the Lower Tier REMIC Regular Interests shall have the characteristics set
forth in its definition.

         The assets of the Upper Tier REMIC shall be the Lower Tier REMIC
Regular Interests. The REMIC Regular Interests shall be designated as the
regular interests in the Upper Tier REMIC and the Residual Interest shall be
designated as the sole class of residual interest in the Upper Tier REMIC. For
federal income tax purposes, the pass-through rate on each REMIC Regular
Interest (other than the Uncertificated Class C Interest) and on the sole class
of residual interest in the Upper Tier REMIC shall be subject to a cap equal to
the Net Rate.

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

                  (c) The "tax matters person" with respect to each REMIC for
purposes of the REMIC Provisions shall be the beneficial owner of the Class R
Certificate; provided, however, that the

                                     - 57 -
<PAGE>
Holder of the Class R Certificate, by its acceptance thereof, irrevocably
appoints the Trustee as its agent and attorney-in-fact to act as "tax matters
person" with respect to each REMIC for purposes of the REMIC Provisions. If
there is more than one beneficial owner of the Class R Certificate, the "tax
matters person" shall be the Person with the greatest percentage interest in the
Class R Certificate and, if there is more than one such Person, shall be
determined under Treasury regulation Section 1.860F-4(d) and Treasury regulation
Section 301.6231(a)(7)-1.

                  (d) It is intended that the rights of each Class of the Class
A, Class M and Class B Certificates to receive payments in respect of Excess
Interest shall be treated as a right in interest rate cap contracts written by
the Class C Certificateholders in favor of the holders of each Class of the
Class A, Class M and Class B Certificates and such shall be accounted for as
property held separate and apart from the regular interests in the Upper Tier
REMIC held by the holders of the Class A (other than the Class R Certificate),
Class M and Class B Certificates and the residual interest in the Upper Tier
REMIC held by the holder of the Class R Certificate. For information reporting
requirements, the rights of the Class A, Class M and Class B Certificates to
receive payments in respect of Excess Interest shall be assumed to have zero or
a de minimis value. This provision is intended to satisfy the requirements of
Treasury Regulations Section 1.860G-2(i) for the treatment of property rights
coupled with REMIC interests to be separately respected and shall be interpreted
consistently with such regulation. On each Distribution Date, to the extent that
any of the Class A, Class M and Class B Certificates receive payments in respect
of Excess Interest, such amounts, to the extent not derived from payments on the
Cap Contracts, will be treated as distributed by the Upper Tier REMIC to the
Class C Certificates pro rata in payment of the amounts specified in Section
4.04(g) and then paid to the relevant Class of Certificates pursuant to the
related interest rate cap agreement.

                  (e) The parties intend that the portion of the Trust Fund
consisting of the Uncertificated Class C Interest, the Cap Contracts, the Cap
Contract Account, and the obligation of the holders of the Class C Certificates
to pay amounts in respect of Excess Interest to the holders of the Class A,
Class M and Class B Certificates shall be treated as a "grantor trust" under the
Code, for the benefit of the holders of the Class C Certificates, and the
provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Trustee shall (i) furnish or cause to be
furnished to the holders of the Class C Certificates information regarding their
allocable share, if any, of the income with respect to such grantor trust, (ii)
file or cause to be filed with the Internal Revenue Service Form 1041 (together
with any necessary attachments) and such other forms as may be applicable and
(iii) comply with such information reporting obligations with respect to
payments from such grantor trust to the holders of Class A, Class M, Class B and
Class C Certificates as may be applicable under the Code.

                  (f) The parties intend that the portion of the Trust Fund
consisting of the right to receive amounts distributable to the Class P
Certificates pursuant to Section 4.04(b)(i) hereof shall be treated as a
"grantor trust" under the Code, for the benefit of the holders of the Class P
Certificates, and the provisions hereof shall be interpreted consistently with
this intention. In furtherance of such intention, the Trustee shall (i) furnish
or cause to be furnished to the holders of the Class P Certificates information
regarding their allocable share of the income with respect to such grantor trust
and (ii) file or cause to be filed with the Internal Revenue Service Form 1041
(together with any necessary attachments) and such other forms as may be
applicable.

                  (g) [RESERVED]

                  (h) All payments of principal and interest at the Net Mortgage
Rate on each of the Mortgage Loans (other than amounts distributable to the
Class P Certificates pursuant to Section 4.04(b)(i) hereof) received from the
Mortgage Loans shall be paid to the Lower Tier REMIC

                                     - 58 -
<PAGE>
Regular Interests until the principal balance of all such interests have been
reduced to zero and any losses allocated to such interests have been reimbursed.
Any excess amounts shall be distributed to the Class LTR Interest. On each
Distribution Date, payments and losses shall be allocated among the Lower Tier
REMIC Regular Interests so that (i) each of the Lower Tier REMIC I Marker
Interests shall have a principal balance equal to 25% of the principal balance
of the Corresponding Certificates, (ii) the Class LTIX Interest has a principal
balance equal to the excess of (x) 50% of the remaining principal balance of the
Mortgage Loans over (y) the aggregate principal balance of the Lower Tier REMIC
I Marker Interests (if necessary to reflect an increase in
overcollateralization, accrued and unpaid interest on the Class LTIX interest
may be added to its principal amount to achieve this result) and (iii) the
aggregate principal amount of the Class LTII1A Interest, Class LTII1B Interest,
Class LTII2A Interest, Class LTII2B Interest and the Class LTIIX Interest shall
equal 50% of the remaining principal balance of the Mortgage Loans.
Distributions and losses allocated to the Lower Tier REMIC Regular Interests
described in clause (iii) of the preceding sentence will be allocated among such
Lower Tier REMIC Regular Interests in the following manner: (x) such
distributions shall be deemed made to such Lower Tier REMIC Regular Interests
first, so as to keep the principal balance of the each such Lower Tier REMIC
Regular Interest with "B" at the end of its designation equal to 0.05% of the
aggregate scheduled principal balance of the Mortgage Loans in the related
Mortgage Group; second, to such Lower Tier REMIC Regular Interests with "A" at
the end of its designation so that the uncertificated principal balance of each
such Lower Tier REMIC Regular Interest is equal to 0.05% of the excess of (I)
the aggregate scheduled principal balance of the Mortgage Loans in the related
Mortgage Group over (II) the aggregate principal balance of Certificate Group
One, in the case of the Class LTII1A Interest, or Certificate Group Two, in the
case of the Class LTII2A Interest (except that if 0.05% of any such excess is
greater than the principal amount of the related Lower Tier REMIC II Marker
Interest with "A" at the end of its designation, the least amount of principal
shall be distributed to each Lower Tier REMIC II Marker Interest with "A" at the
end of its designation such that the Lower Tier REMIC Subordinated Balance Ratio
is maintained) and finally, any remaining distributions of principal to the
Class LTIIX Interest and (y) such losses shall be allocated among the Lower Tier
REMIC Regular Interests described in clause (iii) of the preceding sentence
first, so as to keep the principal balance of the each such Lower Tier REMIC
Regular Interest with "B" at the end of its designation equal to 0.05% of the
aggregate scheduled principal balance of the Mortgage Loans in the related
Mortgage Group; second, to such Lower Tier REMIC Regular Interests with "A" at
the end of its designation so that the uncertificated principal balance of each
such Lower Tier REMIC Regular Interest is equal to 0.05% of the excess of (I)
the aggregate scheduled principal balance of the Mortgage Loans in the related
Mortgage Group over (II) the aggregate principal balance of Certificate Group
One, in the case of the Class LTII1A Interest, or Certificate Group Two, in the
case of the Class LTII2A Interest (except that if 0.05% of any such excess is
greater than the principal amount of the related Lower Tier REMIC II Marker
Interest with "A" at the end of its designation, the least amount of losses
shall be allocated to each Lower REMIC II Marker Interest with "A" at the end of
its designation such that the Lower Tier REMIC Subordinated Balance Ratio is
maintained) and finally, any remaining losses to the Class LTIIX Interest.
Notwithstanding the preceding two sentences, however, losses not allocated to
any Class of Certificates will not be allocated to any Lower Tier REMIC Regular
Interests. All computations with respect to the Lower Tier REMIC Regular
Interests shall be taken out to ten decimal places.

         Any available funds remaining in the Lower Tier REMIC on a Distribution
Date after distributions to the Lower Tier REMIC Regular Interests shall be
distributed to the Class R Certificates in respect of the Class LTR Interest.

         If on any Distribution Date the Certificate Principal Balance of any
Class of Certificates is increased pursuant to the last sentence of the
definition of "Certificate Principal Balance", then there shall be an equivalent
increase in the principal amounts of the Lower Tier REMIC Regular Interests,
with such increase allocated (before the making of distributions and the
allocation of losses on the Lower Tier

                                     - 59 -

<PAGE>

REMIC Regular Interests on such Distribution Date) among the Lower Tier REMIC
Regular Interests so that, to the greatest extent possible, (i) each of the
Lower Tier REMIC I Marker Interests has a principal balance equal to 25% of the
principal balance of the Corresponding Certificates, (ii) the Class LTIX
Interest has a principal balance equal to the excess of (x) 50% of the remaining
principal balance of the Mortgage Loans over (y) the aggregate principal balance
of the Lower Tier REMIC I Marker Interests and (iii) the aggregate principal
amount of the Lower Tier REMIC II Marker Interests and the Class LTIIX Interest
shall equal 50% of the remaining principal balance of the Mortgage Loans.
Allocations in connection with clause (iii) shall be made so that, to the
greatest extent possible, (a) the principal balance of each Lower Tier REMIC II
Marker Interest with "B" at the end of its designation equals 0.05% of the
aggregate scheduled principal balance of the Mortgage Loans in related Mortgage
Group, (b) the principal balance of each Lower Tier REMIC II Marker Interest
with "A" at the end of its designation equals 0.05% of the excess of (x) the
aggregate scheduled principal balance of the Mortgage Loans in related Mortgage
Group over (y) the aggregate principal balance of Certificate Group One in the
case of the Class LTII1A Interest, or Certificate Group Two in the case of the
Class LTII2A Interest and (c) any remaining allocations are made to the Class
LTIIX Interest.

      For purposes of this Section 2.07, (i) the Class LTII1A Interest and Class
LTII1B Interest shall be related to Group One, and (ii) the Class LTII2A
Interest and Class LTII2B Interest shall be related to Group Two.

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

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

                                      -60-
<PAGE>
any special or consequential damages to Certificateholders (in addition to
payment of principal and interest on the Certificates).

      Section 2.08. [RESERVED]

      Section 2.09. Covenants of the Servicer.

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

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

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

      Section 2.10. [RESERVED].

      Section 2.11. Permitted Activities of the Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities. In furtherance
of the foregoing, the Trustee is hereby authorized and directed to execute and
deliver on behalf of the Trust, and to perform the duties and obligations of the
Trustee under, the Cap Contracts, an insurance and indemnity agreement with a
NIMs Insurer and any other agreement or instrument related thereto, in each case
in such form as the Depositor shall direct or shall approve, the execution and
delivery of any such agreement by the Depositor to be conclusive evidence of its
approval thereof.

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

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

      Section 3.01. Servicer to Service Mortgage Loans.

      For and on behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans, including without limitation, any powers of
attorney, in accordance with Accepted Servicing Practices. In connection with
such servicing and administration, the Servicer shall have full power and
authority, acting alone and/or through subservicers as provided in Section 3.02
hereof, to do or cause to be done any and all things that it may deem necessary
or desirable in connection with such servicing and administration, including but
not limited to, the power and authority, subject to the terms hereof (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property (or the stock allocated to a
dwelling unit related to a Co-op Loan) and assumptions of the Mortgage Notes and
related Mortgages (but only in the manner provided in this Agreement), (iii) to
collect any Insurance

                                      -61-
<PAGE>
Proceeds and other Liquidation Proceeds and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property (or the stock allocated to a dwelling unit related to a Co-op Loan)
securing any Mortgage Loan; provided that, subject to Section 6.03, the Servicer
shall not take any action that is inconsistent with or prejudices the interests
of the Trust Fund or the Certificateholders in any Mortgage Loan serviced by it
under this Agreement or the rights and interests of the other parties to this
Agreement except as otherwise required by this Agreement or by law. The Servicer
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan which would cause any of the REMICs provided for herein to
fail to qualify as a REMIC or result in the imposition of any tax under Section
860G(a) or 860G(d) of the Code. The Servicer shall represent and protect the
interest of the Trust Fund in the same manner as it currently protects its own
interest in mortgage loans in its own portfolio in any claim, proceeding or
litigation regarding a Mortgage Loan, but in any case not in any manner that is
a lesser standard than that provided in the first sentence of this Section 3.01.
Without limiting the generality of the foregoing, the Servicer, in its own name
or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, subordinations and all other comparable instruments, with respect to
the Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Servicer to
service and administer the Mortgage Loans, to the extent that the Servicer is
not permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor and/or the Trustee shall
execute such documents and deliver them to the Servicer. For purposes of this
Section 3.01, the Trustee hereby grants to the Servicer a limited power of
attorney to execute and file any and all documents necessary to fulfill the
obligations of the Servicer under this Section 3.01.

      The Trustee shall execute any powers of attorney provided by the Servicer
in a form reasonably acceptable to the Trustee, promptly after request therefor
by the Servicer.

      In accordance with the standards of the preceding paragraph, the Servicer
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the payment of taxes and assessments on any first lien Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08.

      All costs incurred by the Servicer, if any, in effecting the timely
payments of taxes and assessments on the Mortgaged Properties and related
insurance premiums shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balance under the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.

      In the event that the Mortgage Loan Documents relating to any Mortgage
Loan contain provisions requiring the related Mortgagor to submit to binding
arbitration any disputes arising in connection with such Mortgage Loan, the
Servicer shall be entitled to waive any such provisions on behalf of the Trust
and to send written notice of such waiver to the related Mortgagor, although the
Mortgagor may still require arbitration of such disputes at its option.

      The Servicer shall not be required to make any Servicing Advance with
respect to a Mortgage Loan that is 150 days or more delinquent.

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

                                      -62-
<PAGE>
      Upon the related MI Insurer's request, the Servicer shall deliver to
either MI Insurer all reports required by such MI insurer that are reasonably
available to the Servicer.

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

      The Servicer further is authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name or in the name of the
Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment,
release and other comparable instruments with respect to such assignment,
release or re-recording of a Mortgage in the name of MERS, solely as nominee for
the Trustee and its successors and assigns. Any reasonable expenses incurred in
connection with the actions described in the preceding sentence or as a result
of MERS discontinuing or becoming unable to continue operations in connection
with the MERS System, shall be subject to withdrawal by the Servicer from the
Collection Account (provided that such expenses constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).

      With respect to any Mortgage Loan, the Servicer may consent to the
refinancing of the prior senior lien relating to such Mortgage Loan, provided
that the following requirements are met:

            (a) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such refinancing;
and

            (b) the interest rate for the loan evidencing the refinanced senior
lien is no more than 2.0% higher than the interest rate on the loan evidencing
the existing senior lien immediately prior to the date of such refinancing; and

            (c) the loan evidencing the refinanced senior lien is not subject to
negative amortization.

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

            (a) The Servicer may arrange for the subservicing of any Mortgage
Loan by a subservicer, which may be an affiliate (each, a "subservicer")
pursuant to a subservicing agreement (each, a "Subservicing Agreement");
provided, however, that (i) such subservicing arrangement and the terms of the
related Subservicing Agreement must provide for the servicing of such Mortgage
Loans in a manner consistent with the servicing arrangements contemplated
hereunder, (ii) that such agreement would not result in a withdrawal or
downgrading by any Rating Agency of the ratings of any Certificates or any of
the NIM Notes evidenced by a letter to that effect delivered by each Rating
Agency to the Depositor and the NIMs Insurer and (iii) the NIMs Insurer shall
have consented to such Subservicing Agreement, which consent shall not be
unreasonably withheld. Notwithstanding the provisions of any Subservicing
Agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Servicer and a subservicer or reference to actions
taken through a subservicer or otherwise, the Servicer shall remain obligated
and liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the subservicer and to

                                      -63-
<PAGE>
the same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. Every Subservicing
Agreement entered into by the Servicer shall contain a provision giving any
successor servicer the option to terminate such agreement, with the consent of
the NIMs Insurer (which consent shall not be unreasonably withheld), in the
event a successor servicer is appointed. All actions of the each subservicer
performed pursuant to the related Subservicing Agreement shall be performed as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer. The Servicer shall deliver to the NIMs Insurer and the Trustee
copies of all Subservicing Agreements.

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

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

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

      Section 3.04. Trustee to Act as Servicer.

      In the event that the Servicer shall, for any reason, no longer be the
servicer hereunder (including by reason of an Event of Default), the Trustee or
its designee shall, within a period of time not to exceed ninety (90) days from
the date of notice of termination or resignation, thereupon assume all of the
rights and obligations of the Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Servicer pursuant to
Section 3.10 hereof or any acts or omissions of any predecessor servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof,
(iv) responsible for any expenses of the Servicer pursuant to Section 2.03 or
(v) deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.04 or the first paragraph of Section 6.02 hereof;
provided, however that the Trustee or its designee, in its capacity as the
successor servicer, shall immediately assume the Servicer's obligation to make
Advances and Servicing Advances). No such termination or resignation shall
affect any obligation of the Servicer to pay amounts owed under this Agreement
and to perform its duties under this Agreement until its successor assumes all
of its rights and obligations hereunder. If the Servicer shall for any reason no
longer be the servicer (including by reason of any Event of Default), the
Trustee (or any other successor servicer) may, at its option, succeed to any
rights and obligations of the Servicer under any subservicing agreement in
accordance with the terms thereof; provided, however, that the Trustee (or any
other successor servicer) shall not incur any liability or have any obligations
in its capacity as servicer under a subservicing agreement arising prior to the
date of such succession unless it expressly elects to succeed to the rights and
obligations of the Servicer thereunder; and the Servicer shall not thereby be
relieved of any liability or obligations under the subservicing agreement
arising prior to the date of such succession. To the extent any Servicing
Transfer Costs or expenses are not paid by the Servicer pursuant to this
Agreement, such amounts shall be payable out of the Certificate Account;
provided that the terminated servicer shall reimburse the Trust Fund for any
such expense incurred by the Trust Fund upon receipt of a reasonably detailed
invoice evidencing such expenses. If the Trustee is unwilling or unable to act
as servicer, or if the NIMs Insurer so directs the Trustee, the Trustee shall
seek to appoint a successor servicer that is eligible in accordance with the
criteria specified in this Agreement and reasonably acceptable to the NIMs
Insurer.

                                      -64-
<PAGE>
      The Servicer shall, upon request of the Trustee, but at the expense of the
Servicer, deliver to the assuming party all documents and records relating to
each subservicing agreement and the Mortgage Loans then being serviced and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.

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

            (a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing and subject to Section
3.01, the Servicer may in its discretion (i) waive any late payment charge or,
if applicable, any default interest charge, or (ii) extend the due dates for
payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below; provided, further, that the
NIMs Insurer's prior written consent shall be required for any modification,
waiver or amendment after the Cut-off Date if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Mortgage Loans as of the Cut-off Date. In the event of any
such arrangement pursuant to clause (ii) above, subject to Section 4.01, the
Servicer shall make any Advances on the related Mortgage Loan during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Servicer, such default is reasonably foreseeable, the
Servicer, consistent with the standards set forth in Section 3.01, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest or extend the final maturity date of such Mortgage Loan), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"), provided, however, that in no event shall
the Servicer grant any such forbearance (other than as permitted by the second
sentence of this Section) with respect to any one Mortgage Loan more than once
in any 12 month period or more than three times over the life of such Mortgage
Loan, and provided, further, that in determining which course of action
permitted by this sentence it shall pursue, the Servicer shall adhere to the
standards of Section 3.01.

            (b) The Servicer will not waive any Prepayment Charge or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment or (iii) in the Servicer's
reasonable judgment as described in Section 3.01 hereof, (x) such waiver relates
to a default or a reasonably foreseeable default, (y) such waiver would maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and related Mortgage Loan and (z) doing so is standard and customary in
servicing similar Mortgage Loans (including any waiver of a Prepayment Charge in
connection with a refinancing of a Mortgage Loan that is related to a default or
a reasonably foreseeable default), or (iv) sufficient information is not made
available to enable it to collect the Prepayment Charge, or (v) the collection
of the Prepayment Charge or of a similar type of prepayment premium would be
considered "predatory" or "illegal" pursuant to written guidance published by
any applicable federal, state or local regulatory authority having jurisdiction
over such matters or has been challenged by any such authority, or (vi)

                                      -65-
<PAGE>
there is a certified class action in which a similar type of prepayment premium
is being challenged. Except as provided in the preceding sentence, in no event
will the Servicer waive a Prepayment Charge in connection with a refinancing of
a Mortgage Loan that is not related to a default or a reasonably foreseeable
default. If the Servicer waives or does not collect all or a portion of a
Prepayment Charge relating to a Principal Prepayment in full or in part due to
any action or omission of the Servicer, other than as provided above, the
Servicer shall deposit the amount of such Prepayment Charge (or such portion
thereof as had been waived for deposit) into the Collection Account for
distribution in accordance with the terms of this Agreement.

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

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

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

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

                  (iii) all Liquidation Proceeds, other than proceeds to be
applied to the restoration or repair of the Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan) or released to either the
Mortgagor or the holder of a senior lien on the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) in accordance with
the Servicer's normal servicing procedures;

                  (iv) all Subsequent Recoveries;

                  (v) all Compensating Interest;

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

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

                  (viii) all Purchase Prices and Substitution Adjustment
Amounts;

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

                  (x) all Prepayment Charges;

                                      -66-
<PAGE>
                  (xi) all net monthly rental income from REO Properties
required to be deposited by the Servicer pursuant to Section 3.12;

                  (xii) any amounts required to be deposited by the Servicer
pursuant to Section 3.27 hereof; and

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

      The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, all servicing-related fees,
including all late payment charges, insufficient funds charges and payments in
the nature of assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property or stock allocated to a
dwelling unit in the case of a Co-op Loan), modification fees, extension fees
and other similar ancillary fees and charges (other than Prepayment Charges) if
collected, and any Excess Proceeds or Prepayment Interest Excess need not be
remitted by the Servicer. Rather, such fees and charges and similar amounts may
be retained by the Servicer as additional servicing compensation. In the event
that the Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw or direct the Trustee, or such other institution maintaining the
Collection Account, to withdraw such amount from the Collection Account, any
provision herein to the contrary notwithstanding. The Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this Section.
All funds deposited in the Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08. In no event
shall the Trustee incur liability for withdrawals from the Collection Account at
the direction of the Servicer.

      The Servicer shall give notice to the NIMs Insurer and the Trustee of the
location of the Collection Account maintained by it when established and prior
to any change thereof. Not later than twenty days after each Distribution Date,
the Servicer shall forward to the NIMs Insurer, and upon request, to the Trustee
and the Depositor the most current available bank statement for the Collection
Account. Copies of such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Trustee.

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

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

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

                  (iii) the Optional Termination Amount paid by the winning
bidder at the Auction or by the NIMs Insurer or the Servicer pursuant to Section
9.01.

         Any amounts received by the Trustee prior to 3:00 p.m. New York City
time (or such earlier deadline for investment in the Permitted Investments
designated by the Trustee) which are required to be deposited in the Certificate
Account by the Servicer shall be invested in Permitted Investments on the
Business Day on which they were received. The foregoing requirements for
remittance by the Servicer and deposit by the Servicer into the Certificate
Account shall be exclusive. In the event that the Servicer

                                      -67-
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shall remit any amount not required to be remitted and not otherwise subject to
withdrawal pursuant to Section 3.08 hereof, it may at any time withdraw such
amount from the Certificate Account, any provision herein to the contrary
notwithstanding. All funds deposited in the Certificate Account shall be held by
the Trustee in trust for the Certificateholders until disbursed in accordance
with this Agreement or withdrawn in accordance with Section 3.08. In no event
shall the Trustee incur liability for withdrawals from the Certificate Account
at the direction of the Servicer. The Trustee shall give notice to the NIMs
Insurer and the Servicer of the location of the Certificate Account maintained
by it when established and prior to any change thereof.

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

            (g) All income and gain net of any losses realized from amounts on
deposit in the Certificate Account shall be for the benefit of the Trustee and
shall be remitted to or withdrawn by it monthly as provided herein. The amount
of any losses incurred in the Certificate Account in respect of any such
investments shall be deposited by the Trustee, in the Certificate Account out of
the Trustee's own funds immediately as realized.

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

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

      Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Servicer out of related collections for any payments made pursuant to Sections
3.01 hereof (with respect to taxes, assessments, dues or comparable items and
insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account to withdraw funds
deposited in error or amounts previously deposited but returned as unpaid due to
a "not sufficient funds" or other denial by the related Mortgagor's banking
institution or to clear and terminate the Escrow

                                      -68-
<PAGE>
Account at the termination of this Agreement in accordance with Section 9.01
hereof. The Escrow Accounts shall not be a part of the Trust Fund.

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

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

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

            (a) The Servicer may from time to time, make withdrawals from the
Collection Account for the following purposes (the order below not constituting
an order of priority):

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

                  (ii) to reimburse the Servicer for Advances made by it (or to
reimburse the Advancing Person for Advances made by it) with respect to the
Mortgage Loans, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on particular Mortgage Loan(s) (including, for
this purpose, Condemnation Proceeds, Insurance Proceeds, Liquidation Proceeds)
that represent late recoveries of payments of principal and/or interest on such
particular Mortgage Loan(s) in respect of which any such Advance was made;

                  (iii) to reimburse the Servicer for any Non-Recoverable
Advance previously made and any Non-Recoverable Servicing Advances previously
made to the extent that, in the case of Non-Recoverable Servicing Advances,
reimbursement therefor constitutes "unanticipated expenses" within the meaning
of Treasury Regulation Section 1.860G-1(b)(3)(ii);

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

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

                  (vi) to pay the Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances (to the extent that
reimbursement for Servicing Advances would constitute an "unanticipated expense"
within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)), the
Servicer's right to reimbursement of Servicing Advances pursuant to this
subclause (vi) with respect to any Mortgage Loan being limited to amounts
received on particular Mortgage Loan(s)(including, for this purpose, Liquidation
Proceeds and purchase and repurchase proceeds) that

                                      -69-
<PAGE>
represent late recoveries of the payments for which such advances were made
pursuant to Section 3.01 or Section 3.06;

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

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

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

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

                  (xi) to withdraw funds deposited in error or amounts
previously deposited but returned as unpaid due to a "not sufficient funds" or
other denial by the related Mortgagor's banking institution;

                  (xii) to pay any obligations under the MI Policies;

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

                  (xiv) to reimburse itself for Advances or Servicing Advances
from amounts in the Collection Account held for future distributions that were
not included in Available Funds for the preceding Distribution Date. An amount
equal to the amount withdrawn from the Collection Account pursuant to this
subclause (xiv) shall be deposited in the Collection Account by the Servicer on
the next succeeding Distribution Date on which funds are to be distributed to
Certificateholders; and

                  (xv) to reimburse itself from any amounts in the Collection
Account for any prior Advances which have not otherwise been reimbursed at the
time a Mortgage Loan is modified.

      In addition, no later than 3:00 p.m. Eastern Time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds and the Principal Funds to the extent on deposit, and
such amount shall be deposited in the Certificate Account; provided, however, if
the Trustee does not receive such Interest Funds and Principal Funds by 4:00
p.m. Eastern Time, such Interest Funds and Principal Funds shall be deposited in
the Certificate Account on the next Business Day.

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

                                      -70-
<PAGE>
      The Servicer shall provide written notification to the Trustee and the
NIMs Insurer on or prior to the next succeeding Servicer Remittance Date upon
making any withdrawals from the Collection Account pursuant to subclauses (iii)
and (viii) above.

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

      Unless otherwise specified, any amounts reimbursable to the Servicer or
the Trustee from amounts on deposit in the Collection Account or the Certificate
Accounts shall be deemed to come from first, Interest Funds, and thereafter,
Principal Funds for the related Distribution Date.

            (b) The Trustee shall withdraw funds from the Certificate Account
for distribution to the Certificateholders in the manner specified in this
Agreement (and shall withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to this Agreement). In addition,
the Trustee shall from time to time make withdrawals from the Certificate
Account for the following purposes (the order below not constituting an order of
priority):

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

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

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

                  (iv) to pay to each MI Insurer the applicable MI Insurer Fee;
and

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

      Section 3.09. [RESERVED]

      Section 3.10. Maintenance of Hazard Insurance.

      The Servicer shall cause to be maintained, for each first lien Mortgage
Loan (other than a Co-op Loan), fire and hazard insurance with extended coverage
in an amount, to the extent permitted by law, that is at least equal to the
lesser of (i) the replacement value of the improvements that are part of such
Mortgaged Property, or (ii) the greater of (a) the outstanding principal balance
of the Mortgage Loan and (b) an amount such that the proceeds of such policy
shall be sufficient to prevent the related Mortgagor and/or mortgagee from
becoming a co-insurer or (iii) the amount required under applicable HUD/FHA
regulations. Each policy of standard hazard insurance shall contain, or have an
accompanying endorsement that contains, a standard mortgagee clause. The
Servicer shall also cause flood insurance to be maintained on property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan, to the
extent described below. Pursuant to Section 3.05 hereof, any amounts collected
by the Servicer under any such policies (other than the amounts to be applied to
the restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in accordance with

                                      -71-
<PAGE>
the Servicer's normal servicing procedures) shall be deposited in the Collection
Account. Any cost incurred by the Servicer in maintaining any such insurance
shall not, for the purpose of calculating monthly distributions to the
Certificateholders or remittances to the Trustee for their benefit, be added to
the principal balance of the Mortgage Loan, notwithstanding that the terms of
the Mortgage Loan so permit. Such costs shall be recoverable by the Servicer out
of late payments by the related Mortgagor or out of Liquidation Proceeds to the
extent and as otherwise permitted by Section 3.08 hereof. It is understood and
agreed that no earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired in respect of a Mortgage other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If a first lien Mortgaged
Property is located at the time of origination of the Mortgage Loan in a
federally designated special flood hazard area and such area is participating in
the national flood insurance program, the Servicer shall cause flood insurance
to be maintained with respect to such first lien Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value of
the improvements that are part of such Mortgaged Property, or (iii) the maximum
amount of such insurance available for the related Mortgaged Property under the
Flood Disaster Protection Act of 1973, as amended.

      In the event that the Servicer shall obtain and maintain a blanket policy
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause which amount shall be deemed to be that in
excess of $1500 not payable under the blanket policy (i.e. the amount of the
deductible under the blanket policy). In connection with its activities as
servicer of the Mortgage Loans, the Servicer agrees to present, on behalf of
itself, the Depositor and the Trustee for the benefit of the Certificateholders,
claims under any such blanket policy.

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

      When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, except as set forth below, to the extent it has
knowledge of such conveyance or prospective conveyance, exercise its rights to
accelerate the maturity of the related Mortgage Loan under any "due-on-sale"
clause contained in the related Mortgage or Mortgage Note; provided, however,
that the Servicer shall not exercise any such right if the "due-on-sale" clause,
in the reasonable belief of the Servicer, is not enforceable under applicable
law; provided, further, that the Servicer shall not take any action in relation
to the enforcement of any "due-on-sale" clause which would adversely affect or
jeopardize coverage under any Required Insurance Policy. An Opinion of Counsel
at the expense of the Servicer (which expense shall constitute a Servicing
Advance) delivered to the Trustee and the Depositor shall conclusively establish
the reasonableness of the Servicer's belief that any "due-on-sale" clause is not
enforceable under applicable law, but such Opinion of Counsel shall not be
required. In such event, the Servicer shall make reasonable efforts to enter
into an assumption and modification agreement with the Person to whom such
property has been or is about to be conveyed, pursuant to which such Person
becomes liable under the Mortgage Note and, unless prohibited by applicable law
or the Mortgage, the Mortgagor remains liable thereon. If the foregoing is not
permitted under applicable law, the Servicer is authorized to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Note. In addition to the foregoing, the
Servicer shall not be required to enforce any "due-

                                      -72-
<PAGE>
on-sale" clause if in the reasonable judgment of the Servicer, entering into an
assumption and modification agreement with a Person to whom such property shall
be conveyed and releasing the original Mortgagor from liability would be in the
best interests of the Certificateholders. The Mortgage Loan, as assumed, shall
conform in all respects to the requirements, representations and warranties of
this Agreement. The Servicer shall notify the Trustee and the NIMs Insurer that
any such assumption or substitution agreement has been completed by forwarding
to the Trustee (with a copy to the NIMs Insurer) the original copy of such
assumption or substitution agreement (indicating the Mortgage File to which it
relates) which copy shall be added by the Trustee to the related Mortgage File
and which shall, for all purposes, be considered a part of such Mortgage File to
the same extent as all other documents and instruments constituting a part
thereof. The Servicer shall be responsible for recording any such assumption or
substitution agreements. In connection with any such assumption or substitution
agreement, no material term of the Mortgage Note (including, but not limited to,
the Mortgage Rate, the amount of Scheduled Payment, the Maximum Rate, the
Minimum Rate, the Gross Margin, the Periodic Rate Cap, the Adjustment Date, a
Prepayment Charge or any other term affecting the amount or timing of payment)
shall be changed nor shall any required monthly payments of principal or
interest be deferred or forgiven. Any fee collected by the Servicer for
consenting to any such conveyance or entering into an assumption or substitution
agreement shall be retained by or paid to the Servicer as additional servicing
compensation.

      Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing.

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

            (a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of Delinquent payments. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) and if applicable, as a Non-Recoverable Servicing Advance,
as contemplated in Section 3.08 hereof. Any Mortgage Loan that is charged off
may be sold to the majority Certificateholder of the Class C Certificates, at
its option, at its fair market value after the time period specified in (e)
below. If the Servicer has knowledge that a Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan) that the Servicer is
contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Servicer, the Servicer will, prior to acquiring the
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan), consider such risks and only take action in accordance with
Accepted Servicing Practices.

                                      -73-
<PAGE>
      With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee or its nominee. Pursuant to its efforts to sell
such REO Property, the Servicer shall either itself or through an agent selected
by the Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Servicer and the Certificateholders for the
period prior to the sale of such REO Property. The Servicer shall prepare a
statement with respect to each REO Property that has been rented showing the
aggregate rental income received and all expenses incurred in connection with
the management and maintenance of such REO Property at such times as is
necessary to enable the Servicer to comply with the reporting requirements of
the REMIC Provisions. The net monthly rental income, if any, from such REO
Property shall be deposited in the Collection Account no later than the close of
business on the Determination Date immediately following the month concerned.
The Servicer shall perform the tax reporting and withholding related to
foreclosures, abandonments and cancellation of indebtedness income as specified
by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax
and information returns, as may be required.

      In the event that the Trust Fund acquires any Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) prior to the expiration of three
years from the end of the year of its acquisition by the Trust Fund or, at the
expense of the Trust Fund, obtain, in accordance with applicable procedures for
obtaining an automatic extension of the grace period, more than 60 days prior to
the day on which such three-year period would otherwise expire, an extension of
the three-year grace period, in which case such property must be disposed of
prior to the end of such extension, unless the Trustee and the NIMs Insurer
shall have been supplied with an Opinion of Counsel (such Opinion of Counsel not
to be an expense of the Trustee or the NIMs Insurer), to the effect that the
holding by the Trust Fund of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) subsequent to such three-year period
or extension will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund or any of the REMICs provided for herein as
defined in section 860F of the Code or cause any of the REMICs provided for
herein to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
(subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) acquired by the
Trust Fund shall be held, rented (or allowed to continue to be rented) or
otherwise used for the production of income by or on behalf of the Trust Fund in
such a manner or pursuant to any terms that would (i) cause such Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) to
fail to qualify as "foreclosure property" within the meaning of section
860G(a)(8) of the Code or (ii) subject the Trust Fund or any REMIC provided for
herein to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) under section 860G(c) of the Code or
otherwise, unless the Servicer or the Depositor has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes. The
Servicer shall have no liability for any losses resulting from a foreclosure on
a second lien Mortgage Loan in connection with the foreclosure of the related
first lien mortgage loan that is not a Mortgage Loan if the Servicer does not
receive notice of such foreclosure action.

      The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of

                                      -74-
<PAGE>
unreimbursed Servicing Fees, Advances, Servicing Advances and any management fee
paid or to be paid with respect to the management of such Mortgaged Property (or
stock allocated to a dwelling unit, in the case of Co-op Loan), shall be applied
for the purpose of the Trust Fund to the payment of principal of, and interest
on, the related defaulted Mortgage Loans (with interest accruing as though such
Mortgage Loans were still current) and all such net income shall be deemed, for
all purposes and as between the parties to this Agreement, to be payments on
account of principal and interest on the related Mortgage Notes and shall be
deposited into the Collection Account. To the extent that any such net income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.

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

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

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

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

            (c) [Reserved]

            (d) With respect to such of the Mortgage Loans as come into and
continue in default, the Servicer will decide, in its reasonable business
judgment, whether to (i) foreclose upon the Mortgaged Properties securing those
Mortgage Loans pursuant to Section 3.12(a), (ii) write off the unpaid principal
balance of the Mortgage Loans as bad debt (unless the Servicer, after making a
reasonable estimate of the expected recovery, determines that foreclosure
proceedings or other liquidation of the related Mortgaged Property would yield a
net recovery), (iii) take a deed in lieu of foreclosure, (iv) accept a short
sale or short refinance; (v) arrange for a repayment plan, or (vi) agree to a
modification of such Mortgage Loan. As to any Mortgage Loan that becomes 120
days delinquent, the Servicer shall obtain a broker's price opinion, the cost of
which will be reimbursable as a Servicing Advance. After obtaining the broker's
price opinion, the Servicer will determine, in its reasonable business judgment,
whether foreclosure proceedings or other liquidation of the related Mortgage
Property would yield a net recovery. The Servicer shall charge off the related
Mortgage Loan at the time it becomes 180 days delinquent (unless the Servicer,
after making a reasonable estimate of the

                                      -75-
<PAGE>
expected recovery, determines that foreclosure proceedings or other liquidation
of the related Mortgaged Property would yield a net recovery). Once a Mortgage
Loan has been charged off, the Servicer will discontinue making Advances, the
Servicer will not be entitled to Servicing Fees (except as provided below) with
respect to such Mortgage Loan, and the Mortgage Loan will be treated as a
Liquidated Mortgage Loan. If the Servicer determines that foreclosure
proceedings or other liquidation of the related Mortgaged Property would yield a
net recovery on a Mortgage Loan that becomes 180 days delinquent, the Servicer
may continue making Advances, and the Servicer will be required to notify the
Trustee of such decision.

            (e) Any Mortgage Loan that is charged off, pursuant to (d) above,
may continue to be serviced by the Servicer for the Certificateholders using
specialized collection procedures (including foreclosure, if appropriate). The
Servicer will be entitled to Servicing Fees and reimbursement of expenses in
connection with such Mortgage Loans after the date of charge off, only to the
extent of funds available from any recoveries on any such Mortgage Loans. Any
such Mortgage Loans serviced in accordance with the specialized collection
procedures shall be serviced for approximately six months. Any net recoveries
received on such Mortgage Loans during such six month period will be treated as
Subsequent Recoveries. On the date which is six months after the date on which
the Servicer begins servicing such Mortgage Loans using the specialized
collection procedures, unless specific net recoveries are anticipated by the
Servicer on a particular Mortgage Loan, such charged off loan will be released
to the majority holder of the Class C Certificates and thereafter, (i) the
majority holder of the Class C Certificates will be entitled to any amounts
subsequently received in respect of any such released loans, (ii) the majority
holder of the Class C Certificates may designate any servicer to service any
such released loan and (iii) the majority holder of the Class C Certificates may
sell any such released loan to a third party.

      Section 3.13. Trustee to Cooperate; Release of Mortgage Files.

      Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of two copies of such request, the Trustee or its
designee shall promptly release the related Mortgage File to the Servicer, and
the Servicer is authorized to cause the removal from registration on the MERS
System of any such Mortgage if applicable, and the Servicer, on behalf of the
Trustee shall execute and deliver the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage together with the Mortgage Note with written evidence
of cancellation thereon. Expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Mortgagor to the
extent permitted by law, and otherwise to the Trust Fund to the extent such
expenses constitute "unanticipated expenses" within the meaning of Treasury
Regulations Section 1.860G-(1)(b)(3)(ii). From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including for
such purpose, collection under any policy of flood insurance, any fidelity bond
or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee or its designee shall, upon
delivery to the Trustee or its designee of a Request for Release in the form of
Exhibit I signed by a Servicing Officer, release the Mortgage File to the
Servicer. Subject to the further limitations set forth below, the Servicer shall
cause the Mortgage File or documents so released to be returned to the Trustee
or its designee when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan is liquidated and the proceeds thereof are deposited in the
Collection Account.

                                      -76-
<PAGE>
      Each Request for Release may be delivered to the Trustee or its designee
(i) via mail or courier, (ii) via facsimile or (iii) by such other means,
including, without limitation, electronic or computer readable medium, as the
Servicer and the Trustee or its designee shall mutually agree. The Trustee or
its designee shall promptly release the related Mortgage File(s) within five (5)
Business Days of receipt of a properly completed Request for Release pursuant to
clauses (i), (ii) or (iii) above. Receipt of a properly completed Request for
Release shall be authorization to the Trustee or its designee to release such
Mortgage Files, provided the Trustee or its designee has determined that such
Request for Release has been executed, with respect to clauses (i) or (ii)
above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the Servicer, and so long as the Trustee or its designee
complies with its duties and obligations under the agreement. If the Trustee or
its designee is unable to release the Mortgage Files within the period
previously specified, the Trustee or its designee shall immediately notify the
Servicer indicating the reason for such delay. If the Servicer is required to
pay penalties or damages due to the Trustee or its designee's negligent failure
to release the related Mortgage File or the Trustee or its designee's negligent
failure to execute and release documents in a timely manner, the Trustee or its
designee, shall be liable for such penalties or damages respectively caused by
it.

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

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

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

      All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds, including but
not limited to, any funds on deposit in the Collection Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trust Fund, subject to the applicable provisions
of this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account or Certificate Account or in any Escrow Account, or any funds that
otherwise are or

                                      -77-
<PAGE>
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to the Servicer under this Agreement.

      Section 3.15. Servicing Compensation.

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

      Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property (or stock allocated to
a dwelling unit, in the case of Co-op Loan)), modification fees, extension fees
and similar fees payable by the Mortgagor, Prepayment Interest Excess, and all
income and gain net of any losses realized from Permitted Investments in the
Collection Account shall be retained by the Servicer to the extent not required
to be deposited in the Collection Account pursuant to Sections 3.05 or 3.12(a)
hereof. The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder (including payment of any
premiums for hazard insurance, as required by Section 3.10 hereof and
maintenance of the other forms of insurance coverage required by Section 3.10
hereof) and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement.

      Section 3.16. Access to Certain Documentation.

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

      Section 3.17. Annual Statement as to Compliance.

      Pursuant to this Agreement, the Servicer shall deliver to the Depositor,
the Trustee and the NIMs Insurer on or before March 15 of each year beginning in
2006, or such other date in order to remain in compliance with the Section 302
Requirements, an Officer's Certificate stating, as to each signatory thereof,
that (i) a review of the activities of the Servicer during the preceding
calendar year and of performance under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Servicer has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof. The Trustee shall forward a copy of
each such statement to each Rating Agency. Copies of such statement shall be

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<PAGE>
provided by the Trustee to any Certificateholder upon written request at the
Certificateholder's expense, provided such statement has been delivered by the
Servicer to the Trustee.

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

      On or before March 15 of each year, beginning in 2006 or such other date
in order to remain in compliance with the Section 302 Requirements, the Servicer
at its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Servicer or any Affiliate
thereof) that is a member of the American Institute of Certified Public
Accountants to furnish a USAP Report to the Trustee and the Depositor. Copies of
the USAP Report shall be provided by the Trustee to any Certificateholder upon
request at the Certificateholder's expense, provided such report has been
delivered by the Servicer to the Trustee. The Trustee shall deliver to the NIMs
Insurer upon written request: (i) a copy of such USAP Report, and (ii) the
Servicer's annual officer's certificate as to compliance with this Agreement
provided by the Servicer to the Trustee pursuant to Section 3.17. In addition,
at the NIMs Insurer's written request, the Servicer shall deliver copies of
evidence of the Servicer's fidelity bond or errors and omissions insurance
coverage to the NIMs Insurer.

      Section 3.19. Rights of the NIMs Insurer.

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

      Section 3.20. Periodic Filings.

            (a) As part of the Form 10-K required to be filed pursuant to the
terms of this Agreement, the Trustee shall include the independent public
accountants report required pursuant to Section 3.18 as well as the Officer's
Certificate delivered by the Servicer pursuant to Section 3.17 relating to the
Servicer's performance of its obligations under this Agreement and any
significant deficiencies relating to the Servicer's compliance set forth in the
report of the Servicer's certified independent accountants described above.

            (b) The Depositor shall prepare and file the initial report on Form
8-K. The Trustee shall prepare for filing, and execute (other than the Form
10-Ks and the Certification), on behalf of the Trust Fund, and file with the
Securities and Exchange Commission, (i) within 15 days after each Distribution
Date in each month, each Monthly Statement on Form 8-K under the Exchange Act
executed by the Trustee, (ii) on or before March 31 of each year beginning in
2006 or such other date in order to remain in compliance with the Section 302
Requirements, a Form 10-K under the Exchange Act executed by the Servicer,
including any certification (the "Certification") required by the Section 302
Requirements, and (iii) any and all reports, statements and information
respecting the Trust Fund and/or the Certificates required to be filed on behalf
of the Trust Fund under the Exchange Act executed by the Trustee. The
Certification shall be executed by a senior officer of the Servicer. Upon such
filing with the Securities and Exchange Commission, the Trustee shall promptly
deliver to the Depositor a copy of any such executed report, statement or
information. Prior to making any such filings and certifications, the Trustee
shall comply with the provisions set forth in this Section. On or prior to
January 31st of the first year in which it is able to do so under applicable
law, the Trustee shall file a Form 15 under the Exchange Act unless instructed
otherwise by the Depositor. The Depositor hereby grants to the Trustee a limited
power of attorney to execute (other than the Form 10-Ks and the Certification)
and file each such document on behalf of the Depositor. Such power of attorney
shall continue until either the earlier of (i) receipt by the Trustee from
the Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Depositor agrees to promptly furnish to the
Trustee, from

                                      -79-
<PAGE>
time to time upon request, such further information, reports, and financial
statements within its control related to this Agreement and the Mortgage Loans
as the Trustee reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Trustee shall have no responsibility to file
any items other than those specified in this Section.

            (c) [RESERVED].

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

      Section 3.21. Annual Certificate by Trustee.

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

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

      Section 3.22. Annual Certificate by Servicer.

            (a) Within 15 days prior to the date on which a Form 10-K is
required to be filed with a Certification by the Depositor, the Servicer shall
execute and deliver an Officer's Certificate in the form of Exhibit L attached
hereto, signed by the senior officer in charge of servicing of the Servicer or
any officer to whom that officer reports, to the Trustee and Depositor for the
benefit of the Trustee and Depositor and their respective officers, directors
and affiliates, certifying as to the following matters:

            (i) I have reviewed the information required to be delivered to the
      Trustee pursuant to the Pooling and Servicing Agreement (the "Servicing
      Information");

            (ii) Based on my knowledge, the information in the Annual Statement
      of Compliance, and all servicing reports, officer's certificates and other
      information relating to the servicing of the Mortgage Loans submitted to
      the Trustee by the Servicer taken as a whole, does

                                      -80-
<PAGE>
      not contain any untrue statement of a material fact or omit to state a
      material fact necessary to make the statements made, in light of the
      circumstances under which such statements were made, not misleading as of
      the last day of the period covered by the Annual Statement of Compliance;

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

            (iv) I am responsible for reviewing the activities performed by the
      Servicer under this Agreement and based upon the review required
      hereunder, and except as disclosed in the Annual Statement of Compliance,
      the Annual Independent Certified Public Accountant's Servicing Report and
      all servicing reports, officer's certificates and other information
      relating to the servicing of the Mortgage Loans submitted to the Trustee
      by the Servicer, the Servicer has, as of the last day of the period
      covered by the Annual Statement of Compliance fulfilled its obligations
      under this Agreement.

            (b) The Servicer shall indemnify and hold harmless the Depositor and
its officers, directors, agents and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Servicer or any of its officers, directors, agents or affiliates of its
obligations under this Section 3.22, any material misstatement or omission in
the Officer's Certificate required under this Section or the negligence, bad
faith or willful misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, then the Servicer agrees that it shall contribute to the
amount paid or payable by the Trustee and the Depositor as a result of the
losses, claims, damages or liabilities of the Depositor in such proportion as is
appropriate to reflect the relative fault of the Depositor on the one hand and
the Servicer on the other in connection with a breach of the Servicer's
obligations under this Section 3.22, any material misstatement or omission in
the Officer's Certificate required under this Section or the Servicer's
negligence, bad faith or willful misconduct in connection therewith.

      Section 3.23. Prepayment Charge Reporting Requirements.

      Promptly after each Distribution Date, the Servicer shall provide to the
Depositor, the Trustee and the NIMs Insurer the following information with
regard to each Mortgage Loan that has prepaid during the related Prepayment
Period:

            (i)   loan number;

            (ii)  current Mortgage Rate;

            (iii) current principal balance;

            (iv)  original principal balance;

            (v)   Prepayment Charge amount due;

            (vi)  Prepayment Charge amount collected; and

            (vii) reason why full Prepayment Charge amount was not collected, if
                  applicable.

      Section 3.24. Statements to Trustee.

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<PAGE>
      Not later than the later of (a) two Business Days after the 15th day of
each month and (b) the 18th day of the month (or if the 18th is not a Business
Day, the next succeeding Business Day), the Servicer shall furnish to the
Trustee and the NIMs Insurer an electronic file providing loan level accounting
data as of the Determination Date for the period ending on the last Business Day
of the preceding month and for the applicable Prepayment Period with respect to
prepayments in the format mutually agreed upon between the Servicer and the
Trustee, including but not limited to information sufficient to allow the
Trustee to prepare the Monthly Statement described in Section 4.05(a).

      Section 3.25. Indemnification.

      The Servicer shall indemnify the Seller, the Trust Fund, the Trustee, the
Depositor, the NIMs Insurer and their officers, directors, employees and agents
and hold each of them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of such
parties may sustain in any way related to the negligence, willful misfeasance or
bad faith in the performance of its duties or by reason of reckless disregard of
obligations and duties hereunder. The Servicer promptly shall notify the Seller,
the Trustee, the Depositor and the NIMs Insurer or any other relevant party if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans and, if subject to this indemnification obligation, assume (with the prior
written consent of the indemnified party, which consent shall not be
unreasonably withheld or delayed) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
any of such parties in respect of such claim. The Servicer shall follow any
reasonable written instructions received from the Trustee and the NIMs Insurer
in connection with such claim and the Servicer will not have liability for
following such instructions. The Servicer shall provide the Depositor, the
Trustee and the NIMs Insurer with a written report of all expenses and advances
incurred by the Servicer pursuant to this Section 3.25, and the Servicer shall
promptly reimburse itself from the assets of the Trust Fund in the Collection
Account for all amounts advanced by it pursuant to the preceding sentence except
when the claim in any way relates to the failure of the Servicer to service and
administer the Mortgage Loans through the negligence, bad faith or willful
misconduct of the Servicer. The provisions of this paragraph shall survive the
termination of this Agreement and the payment of the outstanding Certificates.

      Section 3.26. Nonsolicitation.

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

      Section 3.27. MI Policies; Claims Under the MI Policies.

      Notwithstanding anything to the contrary elsewhere in this Agreement, the
Servicer shall not agree to any modification or assumption of an MI Mortgage
Loan or take any other action with respect to an MI Mortgage Loan that could
result in denial of coverage under the related MI Policy. The Servicer shall
notify the related MI Insurer that the Trustee or a co-trustee, as applicable,
on behalf of the Certificateholders, is the "Insured," as that term is defined
in the related MI Policy, of each MI Mortgage Loan insured by such MI Insurer;
provided, that such designation is made solely for the purpose of entitling the
Trust Fund to receive payments for claims under the MI Policies and the Trustee
shall not, except as provided herein, be deemed to assume the obligations of the
"Insured" thereunder. The Servicer

                                      -82-
<PAGE>
shall, on behalf of the Trustee or co-trustee, as applicable, prepare and file
on a timely basis with the related MI Insurer, all claims which may be made
under the related MI Policy with respect to the MI Mortgage Loans. Consistent
with all rights and obligations hereunder, the Servicer shall take all actions
required under the related MI Policy as a condition to the payment of any such
claim. Any amount received from an MI Insurer with respect to any such MI
Mortgage Loan shall be deposited by the Servicer, no later than two Business
Days following receipt thereof, into the Collection Account.

      Section 3.28. High Cost Mortgage Loans.

            In the event that the Servicer reasonably determines that a Mortgage
Loan may be a "high cost mortgage loan", "high cost home", "covered", "high
cost", "high risk home", "predatory" or similarly classified loan under any
applicable state, federal or local law, the Servicer may notify the Depositor
and the Trustee thereof; the Servicer may terminate its servicing thereof; and
such determination shall be deemed to materially and adversely affect the
interests of the Certificateholders in such Mortgage Loan and the Seller will
repurchase the Mortgage Loan within a 30 day period from the date of such notice
in the manner described in Section 2.02.

                                   ARTICLE IV

                                  DISTRIBUTIONS

      Section 4.01. Advances.

            (a) Subject to the conditions of this Article IV, the Servicer, as
required below, shall make an Advance and deposit such Advance in the Collection
Account. Each such Advance shall be remitted to the Collection Account no later
than 3:00 p.m. Eastern time on the Servicer Advance Date in immediately
available funds. The Servicer shall be obligated to make any such Advance only
to the extent that such advance would not be a Non-Recoverable Advance. If the
Servicer shall have determined that it has made a Non-Recoverable Advance or
that a proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Trustee for the
benefit of the Certificateholders, funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, the NIMs Insurer, each
Rating Agency and the Trustee an Officer's Certificate setting forth the basis
for such determination. The Servicer may, in its sole discretion, make an
Advance with respect to the principal portion of the final Scheduled Payment on
a Balloon Loan, but the Servicer is under no obligation to do so; provided,
however, that nothing in this sentence shall affect the Servicer's obligation
under this Section 4.01 to advance the interest portion of the final Scheduled
Payment with respect to a Balloon Loan as if such Balloon Loan were a fully
amortizing Mortgage Loan. If a Mortgagor does not pay its final Scheduled
Payment on a Balloon Loan when due, the Servicer shall Advance (unless it
determines in its good faith judgment that such amounts would constitute a
Non-Recoverable Advance) a full month of interest (net of the Servicing Fee) on
the Stated Principal Balance thereof each month until its Stated Principal
Balance is reduced to zero.

      In lieu of making all or a portion of such Advance from its own funds, the
Servicer may (i) cause to be made an appropriate entry in its records relating
to the Collection Account that any amount held for future distribution has been
used by the Servicer in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the Collection Account to the Certificate Account.
In addition, the Servicer shall have the right to reimburse itself for any such
Advance from amounts held from time to time in the Collection Account to the
extent such amounts are not then required to be distributed. Any funds so
applied and transferred pursuant to the previous two sentences shall be replaced
by the Servicer by deposit in the Collection Account no later than the close of
business on the Servicer Advance Date on which such funds are required to be
distributed pursuant to this Agreement. The Servicer shall be entitled

                                      -83-
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to be reimbursed from the Collection Account for all Advances of its own funds
made pursuant to this Section as provided in Section 3.08. The obligation to
make Advances with respect to any Mortgage Loan shall continue until the earlier
of (i) the date such Mortgage Loan is paid in full, (ii) the date the related
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) or related REO Property has been liquidated or until the purchase or
repurchase thereof (or substitution therefor) from the Trust Fund pursuant to
any applicable provision of this Agreement, except as otherwise provided in this
Section 4.01, or (iii) the date on which such Mortgage Loan becomes 150 days
delinquent as set forth below.

            (b) Notwithstanding anything in this Agreement to the contrary
(including, but not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance or Servicing Advance would, if made, constitute a Non-Recoverable
Advance or a Non-Recoverable Servicing Advance. The determination by the
Servicer that it has made a Non-Recoverable Advance or a Non-Recoverable
Servicing Advance or that any proposed Advance or Servicing Advance, if made,
would constitute a Non-Recoverable Advance or a Non-Recoverable Servicing
Advance, respectively, shall be evidenced by an Officer's Certificate of the
Servicer delivered to the Depositor and the Trustee. In addition, the Servicer
shall not be required to advance any Relief Act Shortfalls.

            (c) Notwithstanding the foregoing, the Servicer shall not be
required to make any Advances for any Mortgage Loan after such Mortgage Loan
becomes 150 days delinquent. The Servicer shall identify such delinquent
Mortgage Loans in the Servicer Statement referenced in Section 3.24. In
addition, the Servicer shall provide the Trustee with an Officer's Certificate
listing such delinquent Mortgage Loans and certifying that such loans are 150
days or more delinquent.

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

      In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall resulting from a Principal Prepayment in full between the
15th day of the month and the last day of such month of the applicable
Prepayment Period, the Servicer shall, from amounts in respect of the Servicing
Fee for such Distribution Date, deposit into the Collection Account, as a
reduction of the Servicing Fee for such Distribution Date, no later than the
Servicer Advance Date immediately preceding such Distribution Date, an amount up
to the Prepayment Interest Shortfall; provided that the amount so deposited with
respect to any Distribution Date shall be limited to the product of (x) 0.25%
per annum and (y) the aggregate Stated Principal Balance of the Mortgage Loans.
In case of such deposit, the Servicer shall not be entitled to any recovery or
reimbursement from the Depositor, the Trustee, the Trust Fund or the
Certificateholders. With respect to any Distribution Date, to the extent that
the Prepayment Interest Shortfall exceeds Compensating Interest (such excess, a
"Non-Supported Interest Shortfall"), such Non-Supported Interest Shortfall shall
reduce the Current Interest with respect to each Class of Certificates, pro
rata, based upon the amount of interest each such Class would otherwise be
entitled to receive on such Distribution Date. Notwithstanding the foregoing,
there shall be no reduction of the Servicing Fee in connection with Prepayment
Interest Shortfalls relating to the Relief Act and the Servicer shall not be
obligated to pay Compensating Interest with respect to Prepayment Interest
Shortfalls related to the Relief Act.

      Section 4.03. Distributions on the REMIC Interests.

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

                                      -84-
<PAGE>
      Section 4.04. Distributions.

            (a) On each Distribution Date, prior to any distributions to the
Certificateholders, the Trustee shall pay to each MI Insurer, the related MI
Insurer Fee for such Distribution Date from Interest Funds then on deposit in
the Certificate Account.

            (b) On each Distribution Date, the Trustee shall make the following
distributions from funds then available in the Certificate Account, of an amount
equal to the Interest Funds (less amounts distributed pursuant to Section
4.04(a) on such Distribution Date) in the following order of priority:

                  (i) to the Class P Certificates, any Prepayment Charges
received with respect to the Mortgage Loans during the related Prepayment Period
and all amounts paid by the Servicer, the Seller or the Transferors in respect
of Prepayment Charges pursuant to this Agreement or the Transfer Agreements, as
applicable, and all amounts received in respect of any indemnification paid as a
result of a Prepayment Charge being unenforceable in breach of the
representations and warranties set forth in the Sale Agreement or the Transfer
Agreements, in each case for the related Prepayment Period;

                  (ii) to each class of the Class A Certificates, the Current
Interest and any Interest Carry Forward Amount with respect to such Class;
provided, however, if such amount is not sufficient to make a full distribution
of the Current Interest and any Interest Carry Forward Amount with respect to
the Class A Certificates, such amount will be distributed pro rata among each
Class of the Class A Certificates based on the ratio of (x) the Current Interest
and Interest Carry Forward Amount for each class of the Class A Certificates to
(y) the total amount of Current Interest and any Interest Carry Forward Amount
for the Class A Certificates;

                  (iii) to the Class M-1 Certificates, the Class M-1 Current
Interest and any Class M-1 Interest Carry Forward Amount;

                  (iv) to the Class M-2 Certificates, the Class M-2 Current
Interest and any Class M-2 Interest Carry Forward Amount;

                  (v) to the Class M-3 Certificates, the Class M-3 Current
Interest and any Class M-3 Interest Carry Forward Amount;

                  (vi) to the Class B-1 Certificates, the Class B-1 Current
Interest and any Class B-1 Interest Carry Forward Amount;

                  (vii) to the Class B-2 Certificates, the Class B-2 Current
Interest and any Class B-2 Interest Carry Forward Amount;

                  (viii) to the Class B-3 Certificates, the Class B-3 Current
Interest and any Class B-3 Interest Carry Forward Amount;

                  (ix) to the Class B-4 Certificates, the Class B-4 Current
Interest and any Class B-4 Interest Carry Forward Amount;

                  (x) to the Class B-5 Certificates, the Class B-5 Current
Interest and any Class B-5 Interest Carry Forward Amount, and

                  (xi) any remainder pursuant to Section 4.04(f) hereof.

                                      -85-
<PAGE>
      On each Distribution Date, subject to the proviso in (ii) above, Interest
Funds received on the Group One Mortgage Loans will be deemed to be distributed
to the Class R and Class A-1 Certificates and Interest Funds received on the
Group Two Mortgage Loans will be deemed to be distributed to the Class A-2
Certificates, in each case, until the related Current Interest and Interest
Carry Forward Amount of each such class of Certificates for such Distribution
Date has been paid in full. Thereafter, Interest Funds not required for such
distributions are available to be applied to if necessary, to the class or
classes of Certificates that are not related to such group of Mortgage Loans.

            (c) [Reserved]

            (d) On each Distribution Date, the Trustee shall make the following
distributions from the Certificate Account of an amount equal to the Principal
Distribution Amount in the following order of priority, and each such
distribution shall be made only after all distributions pursuant to Section
4.04(b) above shall have been made until such amount shall have been fully
distributed for such Distribution Date:

                  (i) to the Class A Certificates, the Class A Principal
Distribution Amount shall be distributed as follows:

                        (a) the Group One Principal Distribution Amount shall be
      distributed as follows: (I) if no Class A-1 Trigger Event has occurred,
      the Group One Principal Distribution Amount will be distributed as
      follows: first, to the Class R Certificate until its Certificate Principal
      Balance has been reduced to zero, and second, pro rata to the Class A-1A
      and Class A-1B Certificates, based on their relative Certificate Principal
      Balances, until the Certificate Principal Balance of each such Class has
      been reduced to zero and (II) if a Class A-1 Trigger Event has occurred,
      the Group One Principal Distribution Amount shall be distributed
      sequentially to the Class R, Class A-1A and Class A-1B Certificates, until
      the Certificate Principal Balance of each such Class has been reduced to
      zero;

                        (b) the Group Two Principal Distribution Amount will be
      distributed sequentially to the Class A-2A, Class A-2B and Class A-2C
      Certificates until the Certificate Principal Balance of each such Class
      has been reduced to zero; provided, however, that on and after the
      Distribution Date on which the aggregate Certificate Principal Balance of
      the Class M, Class B and Class C Certificates have been reduced to zero,
      any principal distributions allocated to the Class A-2A, Class A-2B and
      Class A-2C Certificates are required to be allocated pro rata among such
      Classes of Certificates, based on their respective Certificate Principal
      Balances, until their Certificate Principal Balances have been reduced to
      zero;

                  (ii) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount;

                  (iii) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount;

                  (iv) to the Class M-3 Certificates, the Class M-3 Principal
Distribution Amount;

                  (v) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount;

                                      -86-
<PAGE>
                  (vi) to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount;

                  (vii) to the Class B-3 Certificates, the Class B-3 Principal
Distribution Amount;

                  (viii) to the Class B-4 Certificates, the Class B-4 Principal
Distribution Amount;

                  (ix) to the Class B-5 Certificates, the Class B-5 Principal
Distribution Amount; and

                  (x) any remainder pursuant to Section 4.04(f) hereof.

            (e) [Reserved].

            (f) On each Distribution Date, the Trustee shall make the following
distributions up to the following amounts from the Certificate Account of the
remainders pursuant to Section 4.04(b)(xi) and (d)(x) hereof and each such
distribution shall be made only after all distributions pursuant to Sections
4.04(b) and (d) above shall have been made until such remainders shall have been
fully distributed for such Distribution Date:

                  (i) for distribution as part of the Principal Distribution
Amount, the Extra Principal Distribution Amount;

                  (ii) to the Class M-1 Certificates, the Class M-1 Unpaid
Realized Loss Amount;

                  (iii) to the Class M-2 Certificates, the Class M-2 Unpaid
Realized Loss Amount;

                  (iv) to the Class M-3 Certificates, the Class M-3 Unpaid
Realized Loss Amount;

                  (v) to the Class B-1 Certificates, the Class B-1 Unpaid
Realized Loss Amount;

                  (vi) to the Class B-2 Certificates, the Class B-2 Unpaid
Realized Loss Amount;

                  (vii) to the Class B-3 Certificates, the Class B-3 Unpaid
Realized Loss Amount;

                  (viii) to the Class B-4 Certificates, the Class B-4 Unpaid
Realized Loss Amount;

                  (ix) to the Class B-5 Certificates, the Class B-5 Unpaid
Realized Loss Amount;

                  (x) to the Class R Certificate, the Residual Excess Interest
Amount;

                                      -87-
<PAGE>
                  (xi) to the Class A, Class M and Class B Certificates, on a
pro rata basis, based upon outstanding Floating Rate Certificate Carryover for
each such Class, the Floating Rate Certificate Carryover for each Class; and

                  (xii) the remainder pursuant to Section 4.04(g) hereof.

            (g) on each Distribution Date, the Trustee shall allocate the
remainders pursuant to Section 4.04(f)(xii) as follows:

                  (i) to the Class C Certificates in the following order of
priority, (I) the Class C Current Interest, (II) the Class C Interest Carry
Forward Amount, (III) as principal on the Class C Certificate until the
Certificate Principal Balance of the Class C Certificates has been reduced to
zero and (IV) the Class C Unpaid Realized Loss Amount; and

                  (ii) the remainder pursuant to Section 4.04(h) hereof.

            (h) On each Distribution Date, the Trustee shall allocate the
remainder pursuant to Section 4.04(g)(ii) hereof (i) to the Trustee to reimburse
amounts or pay indemnification amounts owing to the Trustee from the Trust Fund
pursuant to Section 8.06 to the extent such amounts shall have exceeded the cap
set forth in Section 8.06(c), and (ii) thereafter, to the Class R Certificate
and such distributions shall be made only after all preceding distributions
shall have been made until such remainder shall have been fully distributed.

            (i) On each Distribution Date, after giving effect to distributions
on such Distribution Date, the Trustee shall allocate the Applied Realized Loss
Amount for the Certificates to reduce the Certificate Principal Balances of the
Class C Certificates and the Subordinated Certificates in the following order of
priority:

                  (i) to the Class C Certificates, until the Class C Certificate
Principal Balance is reduced to zero;

                  (ii) to the Class B-5 Certificates until the Class B-5
Certificate Principal Balance is reduced to zero;

                  (iii) to the Class B-4 Certificates until the Class B-4
Certificate Principal Balance is reduced to zero;

                  (iv) to the Class B-3 Certificates until the Class B-3
Certificate Principal Balance is reduced to zero;

                  (v) to the Class B-2 Certificates until the Class B-2
Certificate Principal Balance is reduced to zero;

                  (vi) to the Class B-1 Certificates until the Class B-1
Certificate Principal Balance is reduced to zero;

                  (vii) to the Class M-3 Certificates until the Class M-3
Certificate Principal Balance is reduced to zero;

                  (viii) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero; and

                                      -88-
<PAGE>
                  (ix) to the Class M-1 Certificates until the Class M-1
Certificate Principal Balance is reduced to zero.

            (j) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Trustee at least five (5) Business Days prior to the related Record
Date or, if not, by check mailed by first class mail to such Certificateholder
at the address of such holder appearing in the Certificate Register.
Notwithstanding the foregoing, but subject to Section 9.02 hereof respecting the
final distribution, distributions with respect to Certificates registered in the
name of a Depository shall be made to such Depository in immediately available
funds.

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

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

            (k) The Trustee is hereby directed by the Depositor to execute the
Cap Contracts on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents, adequacy or
sufficiency of such Cap Contracts, including, without limitation, the
representations and warranties contained therein. Any funds payable by the
Trustee under the Cap Contracts at closing shall be paid by the Depositor.
Notwithstanding anything to the contrary contained herein or in any Cap
Contract, the Trustee shall not be required to make any payments to the
counterparty under any Cap Contract. Any payments received under the terms of
the related Cap Contract will be available to pay the holders of the related
Offered Certificates up to the amount of any Floating Rate Certificate
Carryovers remaining after all other distributions required under this Section
4.04 are made on such Distribution Date, other than Floating Rate Certificate
Carryovers attributable to the fact that Applied Realized Loss Amounts are not
allocated to the Class A Certificates. Any amounts received under the terms of
any Cap Contract on a Distribution Date that are not used to pay such Floating
Rate Certificate Carryovers will be distributed to the holders of the Class C
Certificates. Payments in respect of such Floating Rate Certificate Carryovers
from proceeds of a Cap Contract shall

                                      -89-
<PAGE>
be paid to the related Classes of Offered Certificates, pro rata based upon such
Floating Rate Certificate Carryovers for each such class of Offered
Certificates.

                  (i) The Trustee shall establish and maintain, for the benefit
of the Trust Fund and the Certificateholders, the Cap Contract Account. On or
prior to the related Cap Contract Termination Date, amounts, if any, received by
the Trustee for the benefit of the Trust Fund in respect of the related Cap
Contract shall be deposited by the Trustee into the Cap Contract Account and
will be used to pay Floating Rate Certificate Carryovers on the related Offered
Certificates to the extent provided in the immediately preceding paragraph. With
respect to any Distribution Date on or prior to the related Cap Contract
Termination Date, the amount, if any, payable by the Cap Contract Counterparty
under the related Cap Contract will equal the product of (i) the excess of (x)
One-Month LIBOR (as determined by the Cap Contract Counterparty and subject to a
cap equal to the rate with respect to such Distribution Date as shown under the
heading "1ML Upper Collar" in the schedule to the related Cap Contract), over
(y) the rate with respect to such Distribution Date as shown under the heading
"1ML Strike Lower Collar" in the schedule to the related Cap Contract, (ii) an
amount equal to the related Cap Contract Notional Balance and (iii) the number
of days in such Accrual Period, divided by 360. If a payment is made to the
Trust Fund under a Cap Contract and the Trustee is required to distribute excess
amounts to the holders of the Class C Certificates as described above, the
Trustee shall send a notice on the Business Day prior to the related
Distribution Date, stating the amount received on the related Cap Contract, the
amounts paid with respect to Floating Rate Certificate Carryovers and the amount
due to the holders of the Class C Certificates. Such notice shall be sent by the
Trustee via facsimile to the holders of the Class C Certificates.

                  (ii) Amounts on deposit in the Cap Contract Account will
remain uninvested pending distribution to Certificateholders.

                  (iii) Each Cap Contract is scheduled to remain in effect until
the related Cap Contract Termination Date and will be subject to early
termination only in limited circumstances. Such circumstances include certain
insolvency or bankruptcy events in relation to the Cap Contract Counterparty
(after a grace period of three Local Business Days, as defined in the related
Cap Contract, after notice of such failure is received by the Cap Contract
Counterparty) to make a payment due under the related Cap Contract, the failure
by the Cap Contract Counterparty or the Trustee (after a cure period of 20 days
after notice of such failure is received) to perform any other agreement made by
it under the related Cap Contract, the termination of the Trust Fund and the
related Cap Contract becoming illegal or subject to certain kinds of taxation.

      Section 4.05. Monthly Statements to Certificateholders.

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

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

                  (ii) the amount of such distribution to Holders of each Class
allocable to interest, together with any Non-Supported Interest Shortfalls
allocated to each Class;

                                      -90-
<PAGE>
                  (iii) the Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss Amounts
for such Distribution Date;

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

                  (v) the related amount of the Servicing Fee paid to or
retained by the Servicer;

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

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

                  (viii) the cumulative amount of (A) Realized Losses and (B)
Applied Realized Loss Amounts to date, in the aggregate and with respect to the
Group One Mortgage Loans and Group Two Mortgage Loans;

                  (ix) the amount of (A) Realized Losses and (B) Applied
Realized Loss Amounts with respect to such Distribution Date, in the aggregate
and with respect to the Group One Mortgage Loans and Group Two Mortgage Loans;

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

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

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

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

                  (xiv) whether a Stepdown Trigger Event or a Class A-1 Trigger
Event has occurred and is in effect;

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

                                     - 91 -
<PAGE>
                  (xvi) the number and Stated Principal Balance (as of the
preceding Distribution Date) of any Mortgage Loans which were purchased or
repurchased during the preceding Due Period and since the Cut-off Date;

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

                  (xviii) the amount and purpose of any withdrawal from the
Collection Account pursuant to Section 3.08(a)(viii);

                  (xix) the amount of any payments to each Class of Certificates
that are treated as payments received in respect of a REMIC "regular interest"
or REMIC "residual interest" and the amount of any payments to each Class of
Certificates that are not treated as payments received in respect of a REMIC
"regular interest" or REMIC "residual interest";

                  (xx) as of each Distribution Date, the amount, if any, to be
deposited in the Cap Contract Account pursuant to the related Cap Contract as
described in Section 4.04(k) and the amount thereof to be paid to the Class A,
Class M, Class B and Class C Certificates described in Section 4.04(k) hereof;

                  (xxi) the related amount of each MI Insurer Fee paid to each
MI Insurer;

                  (xxii) the number and aggregate Stated Principal Balance of
Mortgage Loans covered by each MI Policy as of the end of the related Due
Period; and

                  (xxiii) any Floating Rate Certificate Carryover paid and all
Floating Rate Certificate Carryover remaining on each class of the Offered
Certificates and Class B-2, Class B-3, Class B-4 and Class B-5 Certificates on
such Distribution Date.

            (b) The Trustee will make the Monthly Statement (and, at its option,
any additional files containing the same information in an alternative format)
available each month to Certificateholders, other parties to this Agreement and
any other interested parties via the Trustee's Internet website. The Trustee's
Internet website shall initially be located at www.ctslink.com". Assistance in
using the website can be obtained by calling the Trustee's customer service desk
at (301) 815-6600. Parties that are unable to use the website are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Trustee shall have the right to change the
way the monthly statements to Certificateholders are distributed in order to
make such distribution more convenient and/or more accessible to the above
parties and the Trustee shall provide timely and adequate notification to all
above parties regarding any such changes.

         The Trustee shall also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the monthly statement and may affix thereto
any disclaimer it deems appropriate in its reasonable discretion (without
suggesting liability on the part of any other party hereto).

         As a condition to access the Trustee's internet website, the Trustee
may require registration and the acceptance of a disclaimer. The Trustee will
not be liable for the dissemination of information in accordance with this
Agreement.

                                     - 92 -
<PAGE>
            (c) The Servicer shall deliver to the NIMs Insurer a copy of any
report delivered by the Servicer to the Trustee.

            (d) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i) without regard to subclauses (A)-(D)
thereof and (a)(ii) of this Section 4.05 aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Trustee pursuant to any requirements of the Code as are from time to time in
effect.

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

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

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

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

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

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

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

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

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

                                     - 93 -
<PAGE>
                                   ARTICLE V

                                THE CERTIFICATES

         Section 5.01. The Certificates.

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

<TABLE>
<CAPTION>
                                      Minimum             Integral Multiples in       Original Certificate
         Class                     Denomination             Excess of Minimum           Principal Balance
-----------------------        --------------------   ----------------------------  --------------------------
<S>                            <C>                    <C>                           <C>
         A-1A                       $25,000.00                    $1.00                   $ 137,747,000.00
         A-1B                       $25,000.00                    $1.00                      34,436,000.00
         A-2A                       $25,000.00                    $1.00                     108,678,000.00
         A-2B                       $25,000.00                    $1.00                      56,753,000.00
         A-2C                       $25,000.00                    $1.00                      25,259,000.00
         M-1                        $25,000.00                    $1.00                      21,910,000.00
         M-2                        $25,000.00                    $1.00                      16,067,000.00
         M-3                        $25,000.00                    $1.00                       2,504,000.00
         B-1                        $25,000.00                    $1.00                       2,504,000.00
         B-2                        $25,000.00                    $1.00                       2,086,000.00
         B-3                        $25,000.00                    $1.00                       2,086,000.00
         B-4                        $25,000.00                    $1.00                       2,086,000.00
         B-5                        $25,000.00                    $1.00                       3,130,000.00
         C                              (1)                        (1)                            100%
         R                            $100.00                      N/A                           $100.00
         P                              (2)                        (2)                             (2)
</TABLE>

----------

(1)      The Class C Certificates shall not have minimum dollar denominations or
         certificate notional amounts and shall be issued in a minimum
         percentage interest of 10%. The initial Overcollateralization Amount is
         $2,089,476.00.

(2)      The Class P Certificates shall not have minimum dollar denominations or
         Certificate Principal Balances and shall be issued in a minimum
         percentage interest of 100%.

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

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

                                     - 94 -
<PAGE>
            (a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of like aggregate Percentage Interest.

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

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

            (b) No Transfer of a Class C or Class P Certificate shall be made
unless such Transfer is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under the Securities Act and such state
securities laws. In the event that a Transfer is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder desiring to effect
such Transfer and such Certificateholder's prospective transferee shall (except
with respect to the initial transfer of a Class C or Class P Certificate by
Merrill Lynch & Co. or, in connection with a transfer of a Class C or Class P
Certificate to the indenture trustee under an Indenture pursuant to which NIM
Notes are issued, whether or not such notes are guaranteed by the NIMs Insurer)
each certify to each Trustee in writing the facts surrounding the Transfer in
substantially the form set forth in Exhibit F (the "Transferor Certificate") and
(i) deliver a letter in substantially the form of either Exhibit G (the
"Investment Letter") or Exhibit H (the "Rule 144A Letter") or (ii) there shall
be delivered to the Trustee an Opinion of Counsel that such Transfer may be made
pursuant to an exemption from the Securities Act, which Opinion of Counsel shall
not be an expense of the Depositor or the Trustee. The Depositor shall provide
to any Holder of a Class C or Class P Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for Transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Trustee shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
in the possession of the Trustee regarding the Certificates, the Mortgage Loans
and other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Class C or Class P Certificate desiring to effect such Transfer shall, and does
hereby agree to, indemnify the Depositor and the Trustee against any liability
that may result if the Transfer is not so exempt or is not made in accordance
with such federal and state laws.

                                     - 95 -
<PAGE>
         No transfer of an ERISA Restricted Certificate that is a Class R
Certificate may be made to any Person unless the Trustee has received a
representation from the transferee of the Class R Certificate, acceptable to and
in form and substance satisfactory to the Trustee, to the effect that such
transferee is not an employee benefit plan subject to Title I of ERISA, a plan
subject to Section 4975 of the Code or a plan subject to any state, local,
federal, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code ("Similar Law") (collectively, a "Plan"), or to any Person
directly or indirectly acquiring such Certificate for, on behalf of, or with any
assets of any such Plan. Each Person to whom a Class R Certificate is to be
transferred shall be required or deemed to represent that it is not a Plan.

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

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

            (c) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:

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

                                     - 96 -
<PAGE>
                  (ii) No Ownership Interest in a Class R Certificate may be
purchased, transferred or sold, directly or indirectly, except in accordance
with the provisions hereof. No Ownership Interest in a Class R Certificate may
be registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Class R Certificate unless, in addition
to the certificates required to be delivered to the Trustee under subparagraph
(b) above, the Trustee shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form attached
hereto as Exhibit E-1 and an affidavit of the proposed transferor in the form
attached hereto as Exhibit E-2. In the absence of a contrary instruction from
the transferor of a Class R Certificate, declaration (11) in Appendix A of the
Transfer Affidavit may be left blank. If the transferor requests by written
notice to the Trustee prior to the date of the proposed transfer that one of the
two other forms of declaration (11) in Appendix A of the Transfer Affidavit be
used, then the requirements of this Section 5.02(c)(ii) shall not have been
satisfied unless the Transfer Affidavit includes such other form of declaration.

                  (iii) Each Person holding or acquiring any Ownership Interest
in a Class R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership Interest in
a Class R Certificate, (B) to obtain a Transfer Affidavit from any Person for
whom such Person is acting as nominee, trustee or agent in connection with any
Transfer of a Class R Certificate and (C) not to Transfer its Ownership Interest
in a Class R Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee. Further, no transfer, sale or other
disposition of any Ownership Interest in a Class R Certificate may be made to a
person who is not a U.S. Person (within the meaning of Section 7701 of the Code)
unless such person furnishes the transferor and the Trustee with a duly
completed and effective Internal Revenue Service Form W-8ECI (or any successor
thereto) and the Trustee consents to such transfer, sale or other disposition in
writing.

                  (iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of a
Class R Certificate in violation of the provisions of this Section 5.02(c), then
the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer of such Class
R Certificate. The Trustee shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in fact not permitted
by Section 5.02(b) and this Section 5.02(c) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the Transfer
was registered after receipt of the related Transfer Affidavit. The Trustee
shall be entitled but not obligated to recover from any Holder of a Class R
Certificate that was in fact not a Permitted Transferee at the time it became a
Holder or, at such subsequent time as it became other than a Permitted
Transferee, all payments made on such Class R Certificate at and after either
such time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of such
Certificate.

                  (v) At the option of the Holder of the Class R Certificate,
the Class LTR Interest and the residual interest in the Upper Tier REMIC may be
severed and represented by separate certificates (with the certificate that
represents the Residual Interest also representing all rights of the Class R
Certificate to distributions attributable to a Pass-Through Rate on the Class R
Certificate in excess of the Net Rate); provided, however, that such separate
certification may not occur until the Trustee and the NIMs Insurer receive an
Opinion of Counsel to the effect that separate certification in the form and
manner proposed would not result in the imposition of federal tax upon the Trust
Fund or any of the REMICs provided for herein or cause any of the REMICs
provided for herein to fail to qualify as a REMIC; and provided further, that
the provisions of Sections 5.02(b) and (c) will apply to each such

                                     - 97 -
<PAGE>
separate certificate as if the separate certificate were a Class R Certificate.
If, as evidenced by an Opinion of Counsel, it is necessary to preserve the REMIC
status of any of the REMICs provided for herein, the Class LTR Interest and the
residual interest in the Upper Tier REMIC shall be severed and represented by
separate Certificates.

         The restrictions on Transfers of a Class R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee and the NIMs Insurer of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trustee or the
Depositor, to the effect that the elimination of such restrictions will not
cause any of the REMICs provided for herein to fail to qualify as a REMIC at any
time that the Certificates are outstanding or result in the imposition of any
tax on the Trust Fund, any REMIC provided for herein, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Class R Certificate hereby consents to any amendment of this Agreement that,
based on an Opinion of Counsel furnished to the Trustee, is reasonably necessary
(a) to ensure that the record ownership of, or any beneficial interest in, a
Class R Certificate is not transferred, directly or indirectly, to a Person that
is not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Class R Certificate that is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.

            (d) The transferor of the Class R Certificate shall notify the
Trustee in writing upon the transfer of the Class R Certificate.

            (e) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Depositor or the Trustee.

         Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.

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

         Section 5.04. Persons Deemed Owners.

         The NIMs Insurer, the Trustee and any agent of the NIMs Insurer or the
Trustee may treat the Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions as provided
in this Agreement and for all other purposes whatsoever, and none of the NIMs
Insurer or the Trustee, nor any agent of the NIMs Insurer or the Trustee shall
be affected by any notice to the contrary.

                                     - 98 -
<PAGE>
         Section 5.05. Access to List of Certificateholders' Names and
Addresses.

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

         Section 5.06. Book-Entry Certificates.

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

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

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

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

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

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

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

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

                                     - 99 -
<PAGE>
         For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.

         Section 5.07. Notices to Depository.

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

         Section 5.08. Definitive Certificates.

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

         Section 5.09. Maintenance of Office or Agency.

         The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange. The Trustee initially designates its
offices at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
Series 2005-HE1 as offices for such purposes. The Trustee will give prompt
written notice to the Certificateholders of any change in such location of any
such office or agency.

                                    - 100 -
<PAGE>
                                   ARTICLE VI

                         THE DEPOSITOR AND THE SERVICER

         Section 6.01. Respective Liabilities of the Depositor and the Servicer.

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

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

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

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

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

         None of the Depositor, the Servicer, nor any of the directors,
officers, employees or agents of the Depositor or the Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor or the Servicer and any director, officer,
employee or agent of the Depositor or the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor or the Servicer and any
director, officer, employee or agent of the Depositor, or the Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense, incurred in connection with the performance of their duties under this
agreement or incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense (i) incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder or (ii) which does not constitute
an "unanticipated expense" within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii). Neither the Depositor nor the Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided, however, that either the
Depositor or the Servicer in its discretion may undertake any such action that
it may deem necessary or desirable in respect of this Agreement and the

                                    - 101 -
<PAGE>
rights and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Trust Fund, and the Depositor and the Servicer shall be
entitled to be reimbursed therefor out of the Collection Account as provided by
Section 3.08 hereof.

         Section 6.04. Limitation on Resignation of Servicer.

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

         Section 6.05. Errors and Omissions Insurance; Fidelity Bonds.

         The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of Fannie Mae or Freddie Mac for Persons
performing servicing for mortgage loans purchased by Fannie Mae or Freddie Mac.
The Servicer shall provide the Trustee and the NIMs Insurer, upon request and
reasonable notice, with copies of such policies and fidelity bond or a
certification from the insurance provider evidencing such policies and fidelity
bond. In the event that any such policy or bond ceases to be in effect, the
Servicer shall use its reasonable commercial efforts to obtain a comparable
replacement policy or bond from an insurer or issuer meeting the requirements
set forth above as of the date of such replacement.

                                  ARTICLE VII

                        DEFAULT; TERMINATION OF SERVICER

         Section 7.01. Events of Default.

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

                  (i) any failure by the Servicer to make any Advance, to
deposit in the Collection Account or the Certificate Account or remit to the
Trustee any payment (excluding a payment required to be made under Section 4.01
hereof) required to be made under the terms of this Agreement, which failure
shall continue unremedied for three Business Days and, with respect to a payment
required to be made under Section 4.01 hereof, for one Business Day, after the
date on which written notice of such failure shall have been given to the
Servicer by the Trustee or the Depositor, or to the Trustee and the Servicer by
the NIMs Insurer or the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates; or

                  (ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer contained in this Agreement or any representation or warranty shall
prove to be untrue, which failure or breach shall continue unremedied for a
period of 60 days after the date on which written notice of such failure shall
have been given to the

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Servicer by the Trustee or the Depositor, or to the Trustee by the NIMs Insurer
or the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates; or

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

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

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

         If an Event of Default shall occur with respect to the Servicer, then,
and in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, or solely with respect to
clause (i) above by 5:00p.m. on the Servicer Remittance Date, the Trustee may
(with the written consent of the NIMs Insurer, except after a NIMs Insurer
Default), or at the direction of the NIMs Insurer or the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates
(with the written consent of the NIMs Insurer, except after a NIMs Insurer
Default), shall, by notice in writing to the Servicer (with a copy to each
Rating Agency), terminate all of the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. On or after the receipt
by the Servicer of such written notice, all authority and power of the Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee as successor servicer. To the extent the Event
of Default resulted from the failure of the Servicer to make a required Advance,
the Trustee shall thereupon make any Advance described in Section 4.01 hereof
subject to Section 3.04 hereof. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Servicer to pay amounts owed pursuant to Article VIII. The
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee of all cash amounts which shall at the
time be credited to the Collection Account, or thereafter be received with
respect to the Mortgage Loans. The Servicer and the Trustee shall promptly
notify the Rating Agencies of the occurrence of an Event of Default or an event
that, with notice, passage of time, other action or any combination of the
foregoing would be an Event of Default, such notice to be provided in any event
within two Business Days of such occurrence.

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

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contrary, upon termination of the Servicer hereunder, any liabilities of the
Servicer which accrued prior to such termination shall survive such termination.

         Section 7.02. Trustee to Act; Appointment of Successor.

         On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, to the extent provided in
Section 3.04, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make advances pursuant to Section 4.01. As
compensation therefor, subject to the last paragraph of Section 7.01, the
Trustee shall be entitled to all fees, costs and expenses relating to the
Mortgage Loans that the Servicer would have been entitled to if the Servicer had
continued to act hereunder. Notwithstanding the foregoing, if the Trustee has
become the successor to the Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which successor shall be approved by the NIMs Insurer and which
does not adversely affect the then current rating of the Certificates by each
Rating Agency as the successor to the Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor Servicer shall be an institution that is acceptable to
the NIMs Insurer and is a Fannie Mae and Freddie Mac approved seller/servicer in
good standing, that has a net worth of at least $15,000,000, and that is willing
to service the Mortgage Loans and executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, that contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer (other than liabilities of the
Servicer under Section 6.03 hereof incurred prior to termination of the Servicer
under Section 7.01), with like effect as if originally named as a party to this
Agreement; and provided further that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced as a result of such assignment and
delegation. No appointment of a successor to the Servicer hereunder shall be
effective until the Trustee and the NIMs Insurer shall have consented thereto,
prior written consent of the NIMs Insurer is obtained and written notice of such
proposed appointment shall have been provided by the Trustee to each
Certificateholder. The Trustee shall not resign as servicer until a successor
servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Servicer hereunder, the Trustee, unless the
Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Servicer hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Trustee nor any other successor
servicer shall be deemed to be in default hereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
or any failure to perform, or any delay in performing, any duties or
responsibilities hereunder, in either case caused by the failure of the Servicer
to deliver or provide, or any delay in delivering or providing, any cash,
information, documents or records to it.

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

         Section 7.03. Notification to Certificateholders.

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

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

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

         Section 8.01. Duties of the Trustee.

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

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they conform to the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, the Trustee shall
take such action as it deems appropriate to have the instrument corrected and if
the instrument is not corrected to its satisfaction, the Trustee will provide
notice thereof to the NIMs Insurer and the Certificateholders and take such
further action as directed by the NIMs Insurer and the Certificateholders.

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

                  (i) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable, individually or as Trustee
except for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to

                                    - 105 -
<PAGE>
the requirements of this Agreement that it reasonably believed in good faith to
be genuine and to have been duly executed by the proper authorities respecting
any matters arising hereunder;

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

                  (iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of the NIMs Insurer or the
Holders of each Class of Certificates evidencing not less than 25% of the Voting
Rights of such Class relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Agreement; and

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

         Section 8.02. Certain Matters Affecting the Trustee.

            (a) Except as otherwise provided in Section 8.01:

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

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

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

                  (viii) prior to the occurrence of an Event of Default
hereunder and after the curing of all Events of Default that may have occurred,
the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing so to do by the NIMs Insurer or the
Holders of each Class of Certificates evidencing not less than 25% of the Voting
Rights of such Class;

                  (ix) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, accountants or attorneys;

                  (x) the Trustee shall not be required to expend its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder if it shall have reasonable

                                    - 106 -
<PAGE>
grounds for believing that repayment of such funds or adequate indemnity against
such liability is not assured to it;

                  (xi) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this Agreement
(other than as issuer of the investment security);

                  (xii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have received
written notice thereof;

                  (xiii) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the NIMs Insurer or the Certificateholders, pursuant to the
provisions of this Agreement, unless the NIMs Insurer or such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that may be incurred therein or thereby; and

                  (xiv) if requested by the Servicer, the Trustee shall appoint
the Servicer as the Trustee's attorney-in-fact in order to carry out and perform
certain activities that are necessary or appropriate for the servicing and
administration of the Mortgage Loans pursuant to this Agreement. Such
appointment shall be evidenced by powers of attorney in such form as may be
agreed to by the Trustee and the Servicer. The Trustee shall have no liability
for any action or inaction of the Servicer in connection with such powers of
attorney and the Trustee shall be indemnified by the Servicer for all
liabilities, costs and expenses incurred by the Trustee in connection with the
Servicer's use or misuse of such powers of attorney.

            (b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.

            (c) The Trustee is hereby directed to execute and deliver on behalf
of the Trust Fund any letter agreements relating to the MI Policies.

         Section 8.03. Trustee Not Liable for Mortgage Loans.

         The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement, of any Mortgage Loan, of any
guarantee of a NIMs Insurer or related document other than with respect to the
Trustee's execution and authentication of the Certificates. The Trustee shall
not be accountable for the use or application by the Depositor or the Servicer
of any funds paid to the Depositor or the Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Collection Account or the
Certificate Account by the Depositor or the Servicer.

         Section 8.04. Trustee May Own Certificates.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.

         Section 8.05. Trustee's Fees and Expenses.

                                    - 107 -
<PAGE>
         The Trustee shall be entitled to all earnings on or investment income
with respect to funds in or credited to the Certificate Account.

         Section 8.06. Indemnification of Trustee.

            (a) The Trustee and its respective directors, officers, employees
and agents shall be entitled to indemnification from the Trust Fund for any
loss, liability or expense incurred in connection with any legal proceeding or
incurred without negligence or willful misconduct on their part, arising out of,
or in connection with the acceptance or administration of the trusts created
hereunder or in connection with the performance of their duties hereunder,
including any applicable fees and expenses payable hereunder, and the costs and
expenses of defending themselves against any claim in connection with the
exercise or performance of any of their powers or duties hereunder, provided
that:

                  (i) with respect to any such claim, the Trustee shall have
given the Depositor and the Holders written notice thereof promptly after the
Trustee shall have knowledge thereof; provided that failure to so notify shall
not relieve the Trust Fund of the obligation to indemnify the Trustee; however,
any reasonable delay by the Trustee to provide written notice to the Depositor
and the Holders promptly after the Trustee shall have obtained knowledge of a
claim shall not relieve the Trust Fund of the obligation to indemnify the
Trustee under this Section 8.06;

                  (ii) while maintaining control over its own defense, the
Trustee shall cooperate and consult fully with the Depositor in preparing such
defense;

                  (iii) notwithstanding anything to the contrary in this Section
8.06, the Trust Fund shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Depositor, which consent
shall not be unreasonably withheld; and

                  (iv) any such loss, liability or expense to be indemnified by
the Trust Fund must constitute an "unanticipated expense" of the Trust Fund
within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).

         The provisions of this Section 8.06 shall survive any termination of
this Agreement and the resignation or removal of the Trustee and shall be
construed to include, but not be limited to any loss, liability or expense under
any environmental law.

            (b) The Trustee shall be entitled to all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
this Agreement (including fees and expenses of its counsel and all persons not
regularly in its employment), except any such expenses, disbursements and
advances that either (i) arise from its negligence, bad faith or willful
misconduct or (ii) do not constitute "unanticipated expenses" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii).

            (c) The Trustee's right to indemnification and reimbursement shall
be subject to a cap of $300,000 in the aggregate in any calendar year, excluding
(i) any Servicing Transfer Costs and (ii) any costs, damages or expenses
incurred by the Trustee in connection with any "high cost" home loans or any
predatory or abusive lending laws, which amounts shall in no case be subject to
any such limitation; provided, however, that such cap shall apply only if NIM
Notes have been issued and shall cease to apply after the date on which any NIM
Notes are paid in full and all amounts which the NIMs Insurer is entitled to be
paid or reimbursed shall have been paid or reimbursed. Any amounts not in excess
of this cap may be withdrawn by the Trustee from the Certificate Account at any
time

                                    - 108 -
<PAGE>
         Section 8.07. Eligibility Requirements for Trustee.

         The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust powers
having a combined capital and surplus of at least $50,000,000, subject to
supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction) and reasonably acceptable to the NIMs
Insurer. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.07
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 8.07, the Trustee
shall resign immediately in the manner and with the effect specified in Section
8.08 hereof. The corporation or national banking association serving as Trustee
may have normal banking and trust relationships with the Depositor and the NIMs
Insurer and their respective Affiliates; provided, however, that such
corporation cannot be an Affiliate of the Servicer other than the Trustee in its
role as successor to the Servicer.

         Section 8.08. Resignation and Removal of Trustee.

         The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor, the
Servicer and the NIMs Insurer by mailing notice of resignation by first class
mail, postage prepaid, to the Certificateholders at their addresses appearing on
the Certificate Register and each Rating Agency, not less than 60 days before
the date specified in such notice when, subject to Section 8.09, such
resignation is to take effect, and (2) acceptance of appointment by a successor
trustee acceptable to the NIMs Insurer in accordance with Section 8.09 and
meeting the qualifications set forth in Section 8.07. If no successor trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.

         If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor or the NIMs Insurer, (ii) the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the NIMs
Insurer may remove the Trustee and the Depositor with the consent of the NIMS
insurer shall promptly appoint a successor trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee, one
copy of which shall be delivered to the Servicer and one copy of which shall be
delivered to the successor trustee.

         The Holders evidencing at least 51% of the Voting Rights of all Classes
of Certificates, with the consent of the NIMs Insurer, or the NIMs Insurer upon
failure of the Trustee to perform its obligations hereunder may at any time
remove the Trustee and the Depositor shall appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized (or by the NIMs Insurer), one complete
set of which instruments shall be delivered by the successor Trustee to the
Servicer, one complete set to the Trustee so removed and one complete set to the

                                    - 109 -
<PAGE>
successor so appointed. Notice of any removal of the Trustee shall be given to
the NIMs Insurer and each Rating Agency by the successor trustee.

         Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.09 hereof.

         Section 8.09. Successor Trustee.

         Any successor trustee appointed as provided in Section 8.08 hereof
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee an instrument accepting such appointment hereunder and thereupon the
resignation or removal of the predecessor trustee, the NIMs Insurer and the
Servicer shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as if
originally named as trustee herein.

         No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.07 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 8.09, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.

         Section 8.10. Merger or Consolidation of Trustee.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).

         Section 8.11. Appointment of Co-Trustee or Separate Trustee.

         Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee and the NIMs Insurer to act as co-trustee or
co-trustees jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust Fund, and to vest in such Person or Persons, in
such capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.11, such powers, duties, obligations, rights
and trusts as the Servicer and the Trustee may consider necessary or desirable.
Any such co-trustee or separate trustee shall be subject to the written approval
of the Servicer and the NIMs Insurer. The Trustee shall not be liable for the
actions of any co-trustee; provided the appointment of a co-trustee shall not
relieve the Trustee of its obligations hereunder. If the Servicer and the NIMs
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in

                                    - 110 -
<PAGE>
the case an Event of Default shall have occurred and be continuing, the Trustee
alone shall have the power to make such appointment. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.07 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.09.

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

                  (i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee except for the obligation of the Trustee under this
Agreement to advance funds on behalf of the Servicer shall be conferred or
imposed upon and exercised or performed by the Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Trustee;

                  (ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and

                  (iii) The Trustee, with the consent of the NIMs Insurer, may
at any time accept the resignation of or remove any separate trustee or
co-trustee.

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer, the NIMs Insurer and the Depositor.

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

         Section 8.12. Tax Matters.

            (a) It is intended that each of the REMICs provided for herein shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
allow each such REMIC to qualify as, a "real estate mortgage investment conduit"
as defined in and in accordance with the REMIC Provisions. It is also intended
that each of the grantor trusts provided for in Section 2.07 hereof shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
allow each such grantor trust to qualify as, a grantor trust under the
provisions of Subpart E, Part I of Subchapter J of the Code. In furtherance of
such intention, the Trustee covenants and agrees that it shall act as agent (and
the Trustee is hereby appointed

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to act as agent) on behalf of each of the REMICs provided for herein and that in
such capacity it shall: (a) prepare and file, or cause to be prepared and filed,
in a timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax
Return (Form 1066 or any successor form adopted by the Internal Revenue Service)
and prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each of the REMICs and grantor
trusts provided for herein, containing such information and at the times and in
the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for each of the REMICs provided for
herein; (c) make or cause to be made elections, on behalf of each of the REMICs
provided for herein to be treated as a REMIC on the federal tax return of such
REMICs for their first taxable years (and, if necessary, under applicable state
law); (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions or other applicable
law, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Person that is not a Permitted Transferee, or a
pass through entity in which a Person that is not a Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) to the
extent that they are under its control conduct the affairs of each of the REMICs
and grantor trusts provided for herein at all times that any Certificates are
outstanding so as to maintain the status of each of the REMICs provided for
herein as a REMIC under the REMIC Provisions and the status of each of the
grantor trusts provided for herein as a grantor trust under Subpart E, Part I of
Subchapter J of the Code; (g) not knowingly or intentionally take any action or
omit to take any action that would cause the termination of the REMIC status of
any of the REMICs provided for herein or result in the imposition of tax upon
any such REMIC; (h) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the grantor trust status
under Subpart E, Part I of Subchapter J of the Code of any of the grantor trusts
provided for herein or result in the imposition of tax upon any such grantor
trust; (i) pay, from the sources specified in the last paragraph of this Section
8.12, the amount of any federal, state and local taxes, including prohibited
transaction taxes as described below, imposed on each of the REMICs provided for
herein prior to the termination of the Trust Fund when and as the same shall be
due and payable (but such obligation shall not prevent the Trustee or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Trustee from withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings); (j) sign or cause to be signed
federal, state or local income tax or information returns; (k) maintain records
relating to each of the REMICs provided for herein, including but not limited to
the income, expenses, assets and liabilities of each of the REMICs and grantor
trusts provided for herein, and the fair market value and adjusted basis of the
Trust Fund property determined at such intervals as may be required by the Code,
as may be necessary to prepare the foregoing returns, schedules, statements or
information, in each instance, to the extent provided by the Servicer; and (l)
as and when necessary and appropriate, represent each of the REMICs provided for
herein in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of any of the REMICs provided for herein,
enter into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of any of the REMICs provided
for herein, and

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otherwise act on behalf of each of the REMICs provided for herein in relation to
any tax matter involving any of such REMICs or any controversy involving the
Trust Fund.

         In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby agrees to indemnify the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.

         In the event that any tax is imposed on "prohibited transactions" of
any of the REMICs provided for herein as defined in Section 860F(a)(2) of the
Code, on the "net income from foreclosure property" of any of such REMICs as
defined in Section 860G(c) of the Code, on any contribution to the Trust Fund
after the Startup Day pursuant to Section 860G(d) of the Code, or any other tax
is imposed, if not paid as otherwise provided for herein, such tax shall be paid
by (i) the Trustee, if any such other tax arises out of or results from a breach
by the Trustee of any of its obligations under this Agreement or as a result of
the location of the Trustee, (ii) any party hereto (other than the Trustee) to
the extent any such other tax arises out of or results from a breach by such
other party of any of its obligations under this Agreement or as a result of the
location of such other party or (iii) in all other cases, or in the event that
any liable party here fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid first with amounts (other than amounts
received by the Trust Fund pursuant to the Cap Contracts) otherwise to be
distributed to the Class R Certificateholders (pro rata) pursuant to Section
4.04, and second with amounts (other than amounts received by the Trust Fund
pursuant to the Cap Contracts) otherwise to be distributed to all other
Certificateholders in the following order of priority: first, to the Class C
Certificates (pro rata), second to the Class B-5 Certificates (pro rata), third
to the Class B-4 Certificates (pro rata), fourth to the Class B-3 Certificates
(pro rata), fifth, to the Class B-2 Certificates (pro rata), sixth, to the Class
B-1 Certificates (pro rata), seventh to the Class M-3 Certificates (pro rata),
eighth to the Class M-2 Certificates (pro rata), ninth to the Class M-1
Certificates (pro rata), and tenth to the Class A Certificates (pro rata).
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Class R Certificate, the Trustee is hereby authorized
pursuant to such instruction to retain on any Distribution Date, from the
Holders of the Class R Certificate (and, if necessary, from the Holders of all
other Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
The Trustee agrees to promptly notify in writing the party liable for any such
tax of the amount thereof and the due date for the payment thereof.

            (b) Each of the Depositor and the Trustee agrees not to knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein.

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                                   ARTICLE IX

                                   TERMINATION

         Section 9.01. Termination upon Liquidation or Repurchase of all
Mortgage Loans.

            (a) Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) an Optional Termination and
(b) the later of (i) the maturity or other liquidation of the last Mortgage Loan
remaining in the Trust Fund (or any Advance with respect thereto) and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor of
the descendants of Joseph P. Kennedy, the late Ambassador of the United States
to the Court of St. James's, living on the date hereof and (ii) the Latest
Possible Maturity Date.

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

         If an Optional Termination does not occur as a result of the Auction's
failure to achieve the Optional Termination Price, the NIMs Insurer (or the
Servicer , if there is not a NIMs Insurer at such time) may, on any Distribution
Date following such Auction, at its option, terminate the Trust Fund by
purchasing all of the Mortgage Loans and REO Properties at a price equal to the
Optional Termination Price. In the event that there is a NIMs Insurer at the
time of the Auction, the Auction fails to achieve the Optional Termination Price
and the NIMs Insurer does not exercise its option to terminate the Trust Fund on
the first Distribution Date on which it is able to exercise such option, the
Servicer may, at such time, at its option, terminate the Trust Fund by
purchasing all of the Mortgage Loans and REO Properties at a price equal to the
Optional Termination Price. In connection with such termination, the Optional
Termination Price shall be delivered to the Trustee no later than the Business
Day immediately preceding the related Distribution Date. Notwithstanding
anything to the contrary herein, the Optional Termination Amount paid to the
Trustee by the winning bidder at the Auction or by the NIMs Insurer or the
Servicer shall be deposited by the Trustee directly into the Certificate Account
immediately upon receipt. Upon any termination as a result of an Auction, the
Trustee shall, out of the Optional Termination Amount deposited into the
Certificate Account, (x) retain for its own account, its costs and expenses
necessary to conduct the Auction and any other unreimbursed amounts owing to it
(without regard to the limitation contained in Section 8.06(c)) and (y) pay to
the Servicer, the aggregate amount of any unreimbursed out

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-of-pocket costs and expenses owed to the Servicer and any unpaid or
unreimbursed Servicing Fees, Advances and Servicing Advances.

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

         Section 9.02. Final Distribution on the Certificates.

         If on any Determination Date, (i) the Trustee determines that there are
no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Trustee shall send a final
distribution notice promptly to each Certificateholder and the NIMs Insurer or
(ii) the Trustee determines that a Class of Certificates shall be retired after
a final distribution on such Class, the Trustee shall notify the
Certificateholders within seven (7) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the Certificates at the office of the
Trustee.

         Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed no later than the last
calendar day of the month immediately preceding the month of such final
distribution (or with respect to an Auction, mailed no later than one Business
Day following completion of such Auction). Any such notice shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the location of the office or agency at which such presentation
and surrender must be made, and (c) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.
The Trustee will give such notice to the NIMs Insurer and each Rating Agency at
the time such notice is given to Certificateholders.

         In the event such notice is given, the Servicer shall cause all funds
in the Collection Account to be deposited in the Certificate Account on the
Business Day prior to the applicable Distribution Date in an amount equal to the
final distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Trustee of a Request for
Release therefor, the Trustee shall promptly release to the Trustee or the NIMs
Insurer, as applicable, the Mortgage Files for the Mortgage Loans.

         Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Certificate Account in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.

         In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the

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applicable Certificates shall not have been surrendered for cancellation, the
Trustee may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all Certificates shall not have been surrendered for cancellation, the
Class R Certificateholders shall be entitled to all unclaimed funds and other
assets of the Trust Fund that remain subject hereto. Upon payment to the Class R
Certificateholders of such funds and assets, the Trustee shall have no further
duties or obligations with respect thereto.

         Section 9.03. Additional Termination Requirements.

            (a) In the event the Trustee, the NIMs Insurer or the Servicer
completes an Optional Termination as provided in Section 9.01, the Trust Fund
shall be terminated in accordance with the following additional requirements,
unless the Trustee has been supplied with an Opinion of Counsel, at the expense
of the Trustee, the NIMs Insurer or the Servicer, as applicable to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of any of the REMICs provided for herein as defined in Section
860F of the Code, or (ii) cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding:

                  (i) The Depositor shall establish a 90-day liquidation period
and notify the Trustee thereof, which shall in turn specify the first day of
such period in a statement attached to the final tax returns of each of the
REMICs provided for herein pursuant to Treasury Regulation Section 1.860F-1. The
Depositor shall satisfy all the requirements of a qualified liquidation under
Section 860F of the Code and any regulations thereunder, as evidenced by an
Opinion of Counsel obtained at the expense of the Trustee or the NIMs Insurer,
as applicable;

                  (ii) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Depositor as agent
of the Trustee shall sell all of the assets of the Trust Fund for cash; and

                  (iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Class R Certificateholders all cash on hand (other than cash
retained to meet outstanding claims known to the Trustee), and the Trust Fund
shall terminate at that time, whereupon the Trustee shall have no further duties
or obligations with respect to sums distributed or credited to the Class R
Certificateholders.

            (b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Depositor to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.

            (c) Upon the written request of the Depositor, the Trustee as agent
for each REMIC hereby agrees to adopt and sign such a plan of complete
liquidation as provided to it by the Depositor. The Trustee's obligation to
adopt and sign such plan of complete liquidation is subject to the Trustee's
receipt of the Opinion of Counsel referred to in Section 9.03(a)(i). In
addition, the Trustee shall take such other action in connection therewith as
may be reasonably requested by the Depositor.

            (d) Notwithstanding any other terms of this Agreement, prior to any
termination of the Trust Fund, the Servicer may prepare a reconciliation of all
Advances and Servicing Advances made by it for which it has not been reimbursed
and a reasonable estimate of all additional Servicing Advances and other costs
for which it would be entitled to be reimbursed if the Trust Fund were not

                                    - 116 -
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being terminated, including without limitation, any Servicing Advances and other
costs arising under Section 6.03 (Limitation on Liability of the Depositor, the
Servicer and Others), and the Servicer may recover these Advances, Servicing
Advances and estimated Servicing Advances and other costs from the Collection
Account (to the extent that such recovery of Servicing Advances, estimated
Servicing Advances and other costs constitutes "unanticipated expenses" within
the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).

            (e) Notwithstanding any other terms of this Agreement, unless the
Servicer previously has notified the Trustee that it has entered into a
servicing agreement for the servicing after the termination date of the Trust
Fund assets, at least 20 days prior to any termination of the Trust Fund, the
Trustee or the Depositor shall notify the Servicer in writing to transfer the
assets of the Trust Fund as of the termination date to the person specified in
the notice, or if such person is not then known, to continue servicing the
assets until the date that is 20 days after the termination date and on the
termination date, the Trustee or the Depositor shall notify the Servicer of the
person to whom the assets should be transferred on that date. In the latter
event the Servicer shall be entitled to recover its servicing fee and any
advances made for the interim servicing period from the collections on the
assets which have been purchased from the Trust and the new owner of the assets,
and the agreements for the new owner to obtain ownership of the assets of the
Trust Fund shall so provide.

                                   ARTICLE X

                            MISCELLANEOUS PROVISIONS

         Section 10.01. Amendment.

         This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIMs Insurer and without the
consent of any of the Certificateholders to,

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

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

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

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

         Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Servicer and the Trustee may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of any of the REMICs provided for herein as REMICs under the
Code or to avoid or

                                    - 117 -
<PAGE>
minimize the risk of the imposition of any tax on the Trust Fund or any of the
REMICs provided for herein pursuant to the Code that would be a claim against
the Trust Fund at any time prior to the final redemption of the Certificates,
provided that the Trustee and the NIMs Insurer shall have been provided an
Opinion of Counsel addressed to the Trustee, which opinion shall be an expense
of the party requesting such amendment but in any case shall not be an expense
of the Trustee, to the effect that such action is necessary or appropriate to
maintain such qualification or to avoid or minimize the risk of the imposition
of such a tax.

         This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee and the Holders of the Certificates affected
thereby evidencing not less than 66 2/3% of the Voting Rights, with the consent
of the NIMs Insurer, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) reduce the aforesaid percentages of Certificates the Holders
of which are required to consent to any such amendment without the consent of
the Holders of all such Certificates then outstanding.

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel addressed to the Trustee, which opinion shall be
an expense of the party requesting such amendment but in any case shall not be
an expense of the Trustee, to the effect that such amendment is permitted
hereunder and will not cause the imposition of any tax on the Trust Fund, any of
the REMICs provided for herein or the Certificateholders or cause any of the
REMICs provided for herein to fail to qualify as a REMIC at any time that any
Certificates are outstanding. A copy of such Opinion of Counsel shall be
provided to the NIMs Insurer.

         Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee or upon the written
request of the Trustee to the Servicer, the Servicer shall furnish written
notification of the substance of such amendment to each Certificateholder, the
NIMs Insurer and each Rating Agency.

         It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

         Nothing in this Agreement shall require the Trustee or the Servicer to
enter into an amendment without receiving an Opinion of Counsel, satisfactory to
the Trustee or the Servicer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01.

         The Trustee may, but shall not be obligated to, enter into any
supplement, modification or waiver which affects its rights, duties or
obligations hereunder.

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<PAGE>
         Section 10.02. Counterparts.

         This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.

         Section 10.03. Governing Law.

         THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

         Section 10.04. Intention of Parties.

         It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement within the meaning
of the Uniform Commercial Code of the State of New York and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.

         The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.

Section 10.05.    Notices.

            (a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency and the NIMs Insurer with respect to each of the
following of which a Responsible Officer of the Trustee has actual knowledge:

                  (i) Any material change or amendment to this Agreement;

                  (ii) The occurrence of any Event of Default that has not been
cured;

                  (iii) The resignation or termination of the Trustee or the
Servicer and the appointment of any successor;

                                    - 119 -
<PAGE>
                  (iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02 or 2.03;

                  (v) The final payment to Certificateholders; and

                  (vi) Any change in the location of the Certificate Account.

                  (b) The Trustee shall promptly furnish or make available to
each Rating Agency copies of the following:

                  (i) Each report to Certificateholders described in Section
4.05;

                  (ii) Each annual statement as to compliance described in
Section 3.17; and

                  (iii) Each annual independent public accountants' servicing
report described in Section 3.18.

All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor, Merrill Lynch Mortgage Investors, Inc. 250 Vesey Street, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Rating Agencies, (i) Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc., 55 Water Street, New
York, New York 10041; (ii) Moody's Investors Service, Inc., 99 Church Street,
4th Floor, New York, New York 10007; and (iii) Fitch, Inc., One State Street
Plaza, New York, New York 10041; (c) in the case of the Servicer, Wilshire
Credit Corporation, 14523 S.W. Millikan Way, Suite 200, Beaverton, Oregon 97005;
Attention: Jay Memmott (d) in the case of the Trustee, Wells Fargo Bank, N.A.,
P.O. Box 98, Columbia, Maryland 21046, Attention: Client Manager -- MLMI Series
2005-HE1, with a copy to Wells Fargo Bank, N.A. 9062 Old Annapolis Road,
Columbia, Maryland 21045, Attention: Client Manager -- MLMI Series 2005-HE1; (e)
in the case of the NIMs Insurer, an address to be specified; (f) in the case of
PMI, 3003 Oak Road, Walnut Creek, California 94597; (g) in the case of MGIC,
P.O. Box 488, Milwaukee, Wisconsin 53201; and in the case of any of the
foregoing persons, such other addresses as may hereafter be furnished by any
such persons to the other parties to this Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.

         Section 10.06. Severability of Provisions.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

         Section 10.07. Assignment; Advance Facility.

         Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor;
provided, however, the Servicer is hereby authorized to enter into an Advance
Facility under which (l) the Servicer sells, assigns or pledges to an Advancing
Person the Servicer's rights under this Agreement to be reimbursed for any
Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all Advances or Servicing Advances required to be made by the Servicer
pursuant to this Agreement. No consent of the Trustee, Certificateholders, NIMs
Insurer or any other

                                    - 120 -
<PAGE>
party is required before the Servicer may enter into an Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund Advances and/or Servicing Advances on the Servicer's
behalf, the Servicer shall remain obligated pursuant to this Agreement to make
Advances and Servicing Advances pursuant to and as required by this Agreement,
and shall not be relieved of such obligations by virtue of such Advance
Facility.

         Reimbursement amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the Servicer had made the related Advance(s) and/or
Servicing Advance(s).

         The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan by loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.

         An Advancing Person who purchases or receives an assignment or pledge
of the rights to be reimbursed for Advances and/or Servicing Advances, and/or
whose obligations hereunder are limited to the funding of Advances and/or
Servicing Advances shall not be required to meet the criteria for qualification
of a Subservicer set forth in this Agreement.

         The documentation establishing any Advance Facility shall require that
such reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan by loan information with
respect to each such reimbursement amount distributed to such Advancing Person
or Advance Facility trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility trustee to make the FIFO allocation of each such
reimbursement amount with respect to each Mortgage Loan. The Servicer shall
remain entitled to be reimbursed by the Advancing Person or Advance Facility
trustee for all Advances and Servicing Advances funded by the Servicer to the
extent the related rights to be reimbursed therefor have not been sold, assigned
or pledged to an Advancing Person.

         Any amendment to this Section 10.07 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 10.07, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee and the Servicer, without the consent of any Certificateholder or the
NIMs Insurer notwithstanding anything to the contrary in this Agreement, upon
receipt by the Trustee of an Opinion of Counsel that such amendment has no
material adverse effect on the Certificateholders or written confirmation from
the Rating Agencies that such amendment will not adversely affect the ratings on
the Certificates. Prior to entering into an Advance Facility, the applicable
Servicer shall notify the lender under such facility in writing that: (a) the
Advances financed by and/or pledged to the lender are obligations owed to the
Servicer on a non recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances only to the extent
provided herein, and the Trustee and the Trust Fund are not otherwise obligated
or liable to repay any Advances financed by the lender; (b) the Servicer will be
responsible for remitting to the lender the applicable amounts collected by it
as reimbursement for Advances funded by the lender, subject to the restrictions
and priorities created in this Agreement; and (c) the Trustee shall not have any
responsibility to track or monitor the administration of the financing
arrangement between the Servicer and the lender.

         Section 10.08. Limitation on Rights of Certificateholders.

                                    - 121 -
<PAGE>
         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

         No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

         No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates and/or the NIMs
Insurer, or to obtain or seek to obtain priority over or preference to any other
such Holder and/or the NIMs Insurer or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section 10.08, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

         Section 10.09. Inspection and Audit Rights.

         The Servicer agrees that, on reasonable prior notice, it will permit
any representative of the NIMs Insurer, the Depositor or the Trustee during the
Servicer's normal business hours, to examine all the books of account, records,
reports and other papers of the Servicer relating to the Mortgage Loans, to make
copies and extracts therefrom, to cause such books to be audited by independent
certified public accountants selected by the NIMs Insurer, the Depositor or the
Trustee and to discuss its affairs, finances and accounts relating to the
Mortgage Loans with its officers, employees, agents, counsel and independent
public accountants (and by this provision the Servicer hereby authorizes such
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the NIMs
Insurer, Depositor or the Trustee of any right under this Section 10.09 shall be
borne by the party requesting such inspection; all other such expenses shall be
borne by the Servicer.

         Section 10.10. Certificates Nonassessable and Fully Paid.

         It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

                                    - 122 -
<PAGE>
         Section 10.11. Third Party Rights.

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

         Section 10.12. Additional Rights of the NIMs Insurer.

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

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

                                    - 123 -
<PAGE>
         IN WITNESS WHEREOF, the Depositor, the Trustee and the Servicer have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.

                                       MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                                as Depositor

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

                                       WELLS FARGO BANK, N.A.,
                                                as Trustee

                                       By:
                                          --------------------------------------
                                       Name:  Sandra Whalen
                                       Title:  Vice President

                                       WILSHIRE CREDIT CORPORATION,
                                                as Servicer

                                       By:
                                          --------------------------------------
                                       Name:  Heidi Peterson
                                       Title:  Vice President
<PAGE>
                                    EXHIBIT A

                              FORMS OF CERTIFICATES

                             [INTENTIONALLY OMITTED]

                                      A-1
<PAGE>
                                   EXHIBIT B-1

                     MORTGAGE LOAN SCHEDULE - MORTGAGE POOL

                             [Intentionally Omitted]

                                      B-1-1
<PAGE>
                                   EXHIBIT B-2

                MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS

                             [Intentionally Omitted]

                                      B-2-1
<PAGE>
                                   EXHIBIT B-3

                MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS

                             [Intentionally Omitted]

                                      B-3-1
<PAGE>
                                   EXHIBIT B-4

                   MORTGAGE LOAN SCHEDULE - MI MORTGAGE LOANS

                             [Intentionally Omitted]

                                      B-4-1
<PAGE>
                                    EXHIBIT C

                                    RESERVED

                                       C-1

<PAGE>

                                    EXHIBIT D

                          FORM OF TRUSTEE CERTIFICATION

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wilshire Credit Corporation
14523 S.W. Millikan Way,
Suite 200
Beaverton, Oregon 97005

Re:   Pooling and Servicing Agreement dated as of March 1, 2005 among Merrill
      Lynch Mortgage Investors, Inc., as depositor, Wells Fargo Bank, N.A., as
      trustee and Wilshire Credit Corporation, as servicer, relating to Merrill
      Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates,
      Series 2005-HE1

Ladies and Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:

         (i) All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;

         (ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and

         (iii) Such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that each of the Mortgage
Loan Number, the name of the Mortgagor, the street address (excluding zip code),
the Initial Mortgage Rate, the original maturity date, the original principal
balance, and the first payment due date of the Mortgage Loan conform to the
related information listed in the Mortgage Loan Schedule, (ii) with respect to
each Adjustable Rate Mortgage Loan, that each of the related Periodic Rate Cap,
the Gross Margin and the Lifetime Rate Cap conform to the related information
listed in the Mortgage Loan Schedule and (iii) the existence in each Mortgage
File of each of the documents listed in subparagraphs (i)(A) through (F),
inclusive, or (ii)(A) through (K), inclusive, as applicable, of Section 2.01 in
the Agreement. The Trustee makes no representations or warranties as to the
validity, legality, recordability, sufficiency, enforceability or genuineness of
any of the documents

                                      D-1
<PAGE>
contained in each Mortgage Loan or the collectibility, insurability,
effectiveness or suitability of any such Mortgage Loan.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                        WELLS FARGO BANK, N.A., as Trustee

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                      D-2
<PAGE>
                                   EXHIBIT E-1

                    FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention:  Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
Series 2005-HE1

Ladies and Gentlemen:

         We propose to purchase Merrill Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-HE1, Class R, described in the
Prospectus Supplement, dated April 19, 2005, and Prospectus, dated January 19,
2005. Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated March 1, 2005
relating to this issuance of the Merrill Lynch Mortgage Investors Trust,
Mortgage Loan Asset-Backed Certificates, Series 2005-HE1 (the "Pooling and
Servicing Agreement").

         1. We certify that (a) we are not a disqualified organization and (b)
we are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.

         2. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificate, and (d) we intend
to pay any taxes associated with holding the Class R Certificate as they become
due and (e) we will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of ours or another U.S. taxpayer.

         3. We acknowledge that we will be the beneficial owner of the Class R
Certificate and:1

            ______ The Class R Certificate will be registered in our name.

            ______ The Class R Certificate will be held in the name of our
                   nominee, _________________, which is not a disqualified
                   organization.

----------
1 Check appropriate box and if necessary fill in the name of the Transferee's
nominee.

                                     E-1-1
<PAGE>
         4. We certify that we are not an employee benefit plan subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
a plan subject to Section 4975 of the Code or a plan subject to federal, state,
local, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code (each, a "Plan"), and are not directly or indirectly
acquiring the Class R Certificate on behalf of or with any assets of a Plan.

         5. We certify that (i) we are a U.S. person or (ii) we will hold the
Class R Certificate in connection with the conduct of a trade or business within
the United States and have furnished the transferor and the Trustee with a duly
completed and effective Internal Revenue Service Form W-8ECI or successor form
at the time and in the manner required by the Code; for this purpose the term
"U.S. person" means a citizen or resident of the United States, a corporation,
or partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any State thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to United States federal income tax regardless
of the source of its income, or a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more such U.S. persons have the authority to control all substantial
decisions of the trust (or, to the extent provided in applicable Treasury
regulations, certain trusts in existence on August 20, 1996 which are eligible
to elect to be treated as U.S. Persons. We agree that any breach by us of this
certification shall render the transfer of any interest in the Class R
Certificate to us absolutely null and void and shall cause no rights in the
Class R Certificate to vest in us.

         6. We agree that in the event that at some future time we wish to
transfer any interest in the Class R Certificate, we will transfer such interest
in the Class R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person or
will hold the Class R Certificate in connection with the conduct of a trade or
business within the United States and will furnish us and the Trustee with a
duly completed and effective Internal Revenue Service Form W-8ECI or successor
form at the time and in the manner required by the Code and (iii) has delivered
to the Trustee a letter in the form of this letter (including the affidavit
appended hereto) and, we will provide the Trustee a written statement
substantially in the form of Exhibit E-2 to the Pooling and Servicing Agreement.

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

                                        Very truly yours,

                                        [PURCHASER]

                                        By:_____________________________________
                                             Name:
                                             Title:

Accepted as of __________ __, 200__

MERRILL LYNCH MORTGAGE INVESTORS, INC.

By: _________________________________
     Name:
     Title:

                                     E-1-2
<PAGE>
                                   APPENDIX A

                                    Affidavit pursuant to (i) Section 860E(e)(4)
                                    of the Internal Revenue Code of 1986, as
                                    amended, and (ii) certain provisions of the
                                    Pooling and Servicing Agreement

Under penalties of perjury, the undersigned declares that the following is true:

         1.       He or she is an officer of _________________________ (the
                  "Transferee"),

         2.       the Transferee's Employer Identification number is __________,

         3.       the Transferee is not a "disqualified organization" (as
                  defined below), has no plan or intention of becoming a
                  disqualified organization, and is not acquiring any of its
                  interest in the Merrill Lynch Mortgage Investors Trust,
                  Mortgage Loan Asset-Backed Certificates, Series 2005-HE1,
                  Class R Certificate on behalf of a disqualified organization
                  or any other entity,

         4.       unless Merrill Lynch Mortgage Investors, Inc.("MLMI") has
                  consented to the transfer to the Transferee by executing the
                  form of Consent affixed as Appendix B to the Transferee's
                  Letter to which this Certificate is affixed as Appendix A, the
                  Transferee is a "U.S. person" (as defined below),

         5.       that no purpose of the transfer is to avoid or impede the
                  assessment or collection of tax,

         6.       the Transferee has historically paid its debts as they became
                  due,

         7.       the Transferee intends, and believes that it will be able, to
                  continue to pay its debts as they become due in the future,

         8.       the Transferee understands that, as beneficial owner of the
                  Class R Certificate, it may incur tax liabilities in excess of
                  any cash flows generated by the Class R Certificate,

         9.       the Transferee intends to pay any taxes associated with
                  holding the Class R Certificate as they become due,

         10.      the Transferee consents to any amendment of the Pooling and
                  Servicing Agreement that shall be deemed necessary by MLMI
                  (upon advice of counsel) to constitute a reasonable
                  arrangement to ensure that the Class R Certificate will not be
                  owned directly or indirectly by a disqualified organization,
                  and

         11.      IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE
                  [the transfer is not a direct or indirect transfer of the
                  Class R Certificate to a foreign permanent establishment or
                  fixed base (within the meaning of an applicable income tax
                  treaty) of the Transferee, and as to each of the residual
                  interests represented by the Class R Certificate, the present
                  value of

                                     E-1-3
<PAGE>
                  the anticipated tax liabilities associated with holding such
                  residual interest does not exceed the sum of:

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

                  B.       the present value of the expected future
                           distributions on such residual interest; and

                  C.       the present value of the anticipated tax savings
                           associated with holding such residual interest as the
                           related REMIC generates losses.

         For purposes of this declaration, (i) the Transferee is assumed to pay
         tax at a rate equal to the highest rate of tax specified in Section
         11(b)(1) of the Code, but the tax rate specified in Section 55(b)(1)(B)
         of the Code may be used in lieu of the highest rate specified in
         Section 11(b)(1) of the Code if the Transferee has been subject to the
         alternative minimum tax under Section 55 of the Code in the preceding
         two years and will compute its taxable income in the current taxable
         year using the alternative minimum tax rate, and (ii) present values
         are computed using a discount rate equal to the Federal short-term rate
         prescribed by Section 1274(d) of the Code for the month of the transfer
         and the compounding period used by the Transferee;]

[(11)    (A)      at the time of the transfer, and at the close of each of the
                  Transferee's two fiscal years preceding the Transferee's
                  fiscal year of transfer, the Transferee's gross assets for
                  financial reporting purposes exceed $100 million and its net
                  assets for financial reporting purposes exceed $10 million;
                  and

         (B)      the Transferee is an eligible corporation as defined in
                  Treasury regulations Section 1.860E-1(c)(6)(i) and has agreed
                  in writing that any subsequent transfer of the Class R
                  Certificate will be to another eligible corporation in a
                  transaction that satisfies Treasury regulation Sections
                  1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii), 1.860E-1(c)(4)(iii) and
                  1.860E-1(c)(5) and such transfer will not be a direct or
                  indirect transfer to a foreign permanent establishment (within
                  the meaning of an applicable income tax treaty) of a domestic
                  corporation.

For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]

(12) The Transferee will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.

                                     E-1-4
<PAGE>
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).

___________________________________________

By: _______________________________________

    _______________________________________

         Address of Investor for receipt of distribution:

         Address of Investor for receipt of tax information:

         (Corporate Seal)

         Attest:

       ___________________________________________________

       ___________________________________________________ , Secretary

                                     E-1-5
<PAGE>
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.

Subscribed and sworn before me this       day of           ,
200__.

____________________________________________
Notary Public

County of __________________________________
State of ___________________________________

My commission expires the ________ day of ______________

                                            By:
                                                     Name:______________________
                                                     Title: ____________________

Dated: _________

                                     E-1-6
<PAGE>
                                   EXHIBIT E-2

                         FORM OF TRANSFEROR'S AFFIDAVIT

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention:  Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
Series 2005-HE1

Re:      Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
         Certificates, Series 2005-HE1

         _______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
Transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to the
Class R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.

                                                     Very truly yours,

                                                     ___________________________
                                                     Name:
                                                     Title:

                                     E-2-1
<PAGE>
                                    EXHIBIT F

                         FORM OF TRANSFEROR CERTIFICATE

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
Series 2005-HE1

RE:      Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
         Certificates, Series 2005-HE1

Ladies and Gentlemen:

         In connection with our disposition of the Class [____] Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of March 1,
2005, among Merrill Lynch Mortgage Investors, Inc., as depositor, Wells Fargo
Bank, N.A., as trustee and Wilshire Credit Corporation, as servicer.

                                                     Very truly yours,

                                                     ___________________________
                                                     Name of Transferor

                                                     By: _______________________
                                                     Name:
                                                     Title

                                      F-1
<PAGE>
                                    EXHIBIT G

                            FORM OF INVESTMENT LETTER
                              (ACCREDITED INVESTOR)

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
Series 2005-HE1

Re:      Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
         Certificates, Series 2005-HE1

Ladies and Gentlemen:

         ______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Merrill Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-HE1, Class [____] (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement, dated as
of March 1, 2005 (the "Pooling and Servicing Agreement"), among Merrill Lynch
Mortgage Investors, Inc., as depositor (the "Depositor"), Wells Fargo Bank, N.A.
as trustee (the "Trustee") and Wilshire Credit Corporation, as servicer (the
"Servicer"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN
THE NAME OF ____________________, AS NOMINEE FOR _________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.

         For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:

         1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.

         2.       The Certificates will bear a legend to the following effect:

         THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS
         AMENDED (THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS,
         AND MAY NOT, DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED,
         OR OFFERED FOR SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO
         REGISTRATION UNDER THE ACT, THE 1940 ACT AND ANY APPLICABLE STATE
         SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES WITH THE OTHER
         PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT. NO
         TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL

                                      G-1
<PAGE>
         HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE SERVICER (A)
         AN INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B)
         REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE OFFERING AND SALE OF
         THE CERTIFICATES.

         3. The ERISA Restricted Certificates (other than the Class R
Certificates) will bear a legend to the following effect:

         NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE HAS
         RECEIVED (A) A REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
         BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION
         4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR A
         PLAN SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW
         SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
         ("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
         CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN, (B)
         IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
         UNDERWRITING, A REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE
         COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
         COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED
         TRANSACTION CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND
         HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND
         III OF PTCE 95-60, OR (C) SOLELY IN THE CASE OF A DEFINITIVE
         CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE, AND
         UPON WHICH THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT
         THE ACQUISITION AND HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE
         TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED
         TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR A
         VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE NIMS
         INSURER, THE SERVICER OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
         THOSE UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING
         AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE
         TRUSTEE, THE NIMS INSURER, THE SERVICER OR THE DEPOSITOR. IF THE
         CERTIFICATE IS NOT A DEFINITIVE CERTIFICATE, THE TRANSFEREE IS DEEMED
         TO HAVE MADE THE REPRESENTATION IN (A) OR (B) ABOVE.

         4. The Class R Certificate will bear a legend to the following effect:

         NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE
         PROSPECTIVE TRANSFEREE PROVIDES THE TRUSTEE WITH A REPRESENTATION THAT
         SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF
         THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
         ("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT
         TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR
         TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW"), AND
         IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE BY, ON BEHALF
         OF, OR WITH ANY ASSETS OF ANY SUCH PLAN.

                                      G-2
<PAGE>
         5. The Purchaser is acquiring the Transferred Certificates for its own
account [FOR INVESTMENT ONLY]* and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.

         6. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.

         7. The Purchaser will not nor has it authorized nor will it authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.

         8. The Purchaser of an ERISA Restricted Certificate (other than the
Class R Certificate) (A) is not an employee benefit plan subject to Title I of
ERISA, a plan subject to Section 4975 of the Code, a plan subject to any state,
local, federal, non-U.S. or other law substantively similar to the foregoing
provisions of ERISA or the Code ("Similar Law") and is not directly or
indirectly acquiring such Certificates by, on behalf of, or with any assets of
any such plan, or (B) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, is an insurance company that is acquiring the
Certificate with assets of an "insurance company general account," as defined in
Section V(e) of Prohibited Transaction Class Exemption ("PTCE") 95-60, and the
acquisition and holding of the Certificate are covered and exempt under Sections
I and III of PTCE 95-60, or (C) solely in the event the Certificate is a
Definitive Certificate, herewith delivers an Opinion of Counsel satisfactory to
the Trustee, and upon which the Trustee shall be entitled to rely, to the effect
that the acquisition and holding of the Certificate will not constitute or
result in a nonexempt prohibited transaction under Title I of ERISA or Section
4975 of the Code, or a violation of Similar Law, and will not subject the
Trustee, the NIMs Insurer, the Servicer or the Depositor to any obligation in
addition to those expressly undertaken in the Pooling and Servicing Agreement,
which Opinion of Counsel shall not be an expense of the Trustee, the NIMs
Insurer, the Servicer or the Depositor.

         9. The Purchaser of a Class R Certificate is not an employee benefit
plan subject to Title I of ERISA, a plan subject to Section 4975 of the Code, a
plan subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), or a

----------
* Not required of a broker/dealer purchaser.

                                      G-3
<PAGE>
Person directly or indirectly acquiring such Certificate by, on behalf of, or
with any assets of any such plan.

         10. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit H to the Pooling and Servicing Agreement.

         11. The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation made
herein.

                                                     Very truly yours,

                                                     [PURCHASER]

                                                     By:________________________
                                                          Name:
                                                          Title:

                                      G-4
<PAGE>
                                    EXHIBIT H

                       FORM OF RULE 144A INVESTMENT LETTER
                         (QUALIFIED INSTITUTIONAL BUYER)

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
Series 2005-HE1

Re:      Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
         Certificates, Series 2005-HE1

Ladies and Gentlemen:

         ______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Merrill Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-HE1, Class [____] (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement, dated as
of March 1, 2005 (the "Pooling and Servicing Agreement"), among Merrill Lynch
Mortgage Investors, Inc., as depositor (the "Depositor"), Wells Fargo Bank, N.A.
as trustee (the "Trustee") and Wilshire Credit Corporation, as servicer (the
"Servicer"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN
THE NAME OF ____________________, AS NOMINEE FOR _________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.

         For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:

         In connection with our acquisition of the above Transferred
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Transferred
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Transferred Certificates,
(d)(A) solely with respect to ERISA Restricted Certificates, we are not an
employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), a plan subject to
any state, local, federal, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law"), or Persons directly
or indirectly acting on behalf of or using any assets of any such plan, or (B)
solely with respect to ERISA Restricted Certificates (other than the Class R
Certificates), if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, we are an insurance company that is acquiring the Certificate with
assets of an "insurance company general account," as defined in Section V(e) of
Prohibited Transaction Class Exemption ("PTCE") 95-60, and the acquisition and
holding of the Certificate are covered and exempt under Sections I and III of
PTCE 95-60, or (C) solely in the event the Certificate is an ERISA Restricted
Certificate (other than a Class R Certificate) and also a Definitive

                                      H-1
<PAGE>
Certificate, we will herewith deliver an Opinion of Counsel satisfactory to the
Trustee, and upon which the Trustee shall be entitled to rely, to the effect
that the acquisition and holding of the Certificate will not constitute or
result in a nonexempt prohibited transaction under Title I of ERISA or Section
4975 of the Code, or a violation of Similar Law, and will not subject the
Trustee, the NIMs Insurer, the Servicer or the Depositor to any obligation in
addition to those expressly undertaken in the Pooling and Servicing Agreement,
which Opinion of Counsel shall not be an expense of the Trustee, the NIMs
Insurer, the Servicer or the Depositor, (e) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (f) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
one of the forms of certification to that effect attached hereto as Annex 1 or
Annex 2. We are aware that the sale of the Transferred Certificates to us is
being made in reliance on Rule 144A. We are acquiring the Transferred
Certificates for our own account or for resale pursuant to Rule 144A and further
understand that such Certificates may be resold, pledged or transferred only (i)
to a person reasonably believed by us, based upon certifications of such
purchaser or information we have in our possession, to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.

         We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.

                                                     Very truly yours,

                                                     [PURCHASER]

                                                     By: _______________________
                                                          Name:
                                                          Title:

                                      H-2
<PAGE>
                                                                         ANNEX 1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]

         The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

         1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

         2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________* in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.

                  _________  Corporation, etc. The Buyer is a corporation (other
                             than a bank, savings and loan association or
                             similar institution), Massachusetts or similar
                             business trust, partnership, or charitable
                             organization described in Section 501(c)(3) of the
                             Internal Revenue Code of 1986, as amended.

                  _________  Bank. The Buyer (a) is a national bank or banking
                             institution organized under the laws of any State,
                             territory or the District of Columbia, the business
                             of which is substantially confined to banking and
                             is supervised by Federal, State or territorial
                             banking commission or similar official or is a
                             foreign bank or equivalent institution, and (b) has
                             an audited net worth of at least $25,000,000 as
                             demonstrated in its latest annual financial
                             statements, a copy of which is attached hereto.

                  _________  Savings and Loan. The Buyer (a) is a savings and
                             loan association, building and loan association,
                             cooperative bank, homestead association or similar
                             institution, which is supervised and examined by a
                             State or Federal authority having supervision over
                             such institution or is a foreign savings and loan
                             association or equivalent institution and (b) has
                             an audited net worth of at least $25,000,000 as
                             demonstrated in its latest annual financial
                             statements, a copy of which is attached hereto.

                  _________  Broker-dealer. The Buyer is a dealer registered
                             pursuant to Section 15 of the Securities Exchange
                             Act of 1934, as amended.

----------
* Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.

                                      H-3
<PAGE>
                  _________  Insurance Company. The Buyer is an insurance
                             company whose primary and predominant business
                             activity is the writing of insurance or the
                             reinsuring of risks underwritten by insurance
                             companies and which is subject to supervision by
                             the insurance commissioner or a similar official or
                             agency of the State, territory or the District of
                             Columbia.

                  _________  State or Local Plan. The Buyer is a plan
                             established and maintained by a State, its
                             political subdivisions, or any agency or
                             instrumentality of the State or its political
                             subdivisions, for the benefit of its employees.

                  _________  ERISA Plan. The Buyer is an employee benefit plan
                             subject to Title I of the Employee Retirement
                             Income Security Act of 1974, as amended.

                  _________  Investment Advisor.  The Buyer is an investment
                             advisor registered under the Investment Advisors
                             Act of 1940, as amended.

                  _________  Small Business Investment Company. Buyer is a small
                             business investment company licensed by the U.S.
                             Small Business Administration under Section 301(c)
                             or (d) of the Small Business Investment Act of
                             1958, as amended.

                  _________  Business Development Company. Buyer is a business
                             development company as defined in Section
                             202(a)(22) of the Investment Advisors Act of 1940,
                             as amended.

         3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.

         4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

                                      H-4
<PAGE>
         5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

         6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                                     By:________________________
                                                          Name:
                                                          Title:

                                                     Date:______________________

                                      H-5
<PAGE>
                                                                         ANNEX 2

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]

         The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

         1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

         2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

          _________  The Buyer owned $___________ in securities (other than the
                     excluded securities referred to below) as of the end of the
                     Buyer's most recent fiscal year (such amount being
                     calculated in accordance with Rule 144A).

          _________  The Buyer is part of a Family of Investment Companies which
                     owned in the aggregate $__________ in securities (other
                     than the excluded securities referred to below) as of the
                     end of the Buyer's most recent fiscal year (such amount
                     being calculated in accordance with Rule 144A).

         3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

         4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.

         5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.

                                      H-6
<PAGE>
         6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.

                                                     By:________________________
                                                          Name:
                                                          Title:

                                                     IF AN ADVISER:

                                                     ___________________________
                                                     Print Name of Buyer

                                                     Date:______________________

                                      H-7
<PAGE>
                                    EXHIBIT I

                           FORM OF REQUEST FOR RELEASE

                                     [DATE]

To:      Wells Fargo Bank, N.A.
         1015 10th Avenue Southeast
         Minneapolis, Minnesota 55414

Re:      Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
         Certificates, Series 2005-HE1

         In connection with the administration of the Mortgage Loans held by
you, as Trustee, pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Mortgage File for the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_______ 1.        Mortgage Paid in Full

_______ 2.        Foreclosure

_______ 3.        Substitution

_______ 4.        Other Liquidation (Repurchases, etc.)

_______ 5.        Nonliquidation

_______ 6.        Other Reason:     __________________________

Address to which the Trustee should deliver the Mortgage File:

                                          By:_______________________________
                                                   (authorized signer)

                                          Address:__________________________

                                          Date:_____________________________

If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.

                                      I-1
<PAGE>
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.

Please acknowledge the execution of the above request by your signature and date
below:

Wells Fargo Bank, N.A.,
as Trustee

By:_________________________________        _________________________________
    Signature                                        Date

Documents returned to Trustee:

By:_________________________________        _________________________________
    Signature                                        Date

                                      I-2
<PAGE>
                                    EXHIBIT J

               LIST OF TRANSFER AGREEMENTS AND BRING DOWN LETTERS

1.       Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
         of October 1, 2004, as amended November 1, 2004, among Merrill Lynch
         Mortgage Capital Inc., as Purchaser and First Bank d/b/a First Bank
         Mortgage, as Seller, as supplemented by that certain Bring Down Letter,
         dated as of April 21, 2005, from First Bank d/b/a First Bank Mortgage
         to Merrill Lynch Mortgage Capital Inc.

2.       Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
         of September 1, 2004, as amended December 1, 2004, among Merrill Lynch
         Mortgage Capital Inc., as Purchaser and Acoustic Home Loans, LLC, as
         Seller, as supplemented by that certain Bring Down Letter, dated as of
         April 21, 2005, from Acoustic Home Loans, LLC to Merrill Lynch Mortgage
         Capital Inc.

3.       Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
         of January 1, 2005, as amended March 1, 2005, among Merrill Lynch
         Mortgage Capital Inc., as Purchaser and ComUnity Lending, Incorporated,
         as Seller, as supplemented by that certain Bring Down Letter, dated as
         of April 21, 2005, from ComUnity Lending, Incorporated to Merrill Lynch
         Mortgage Capital Inc.

4.       Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
         of August 1, 2004, as amended January 1, 2005, and February 1, 2005,
         among Merrill Lynch Mortgage Capital Inc., as Purchaser and Lenders
         Direct Capital Corporation, as Seller, as supplemented by that certain
         Bring Down Letter, dated as of April 21, 2005, from Lenders Direct
         Capital Corporation to Merrill Lynch Mortgage Capital Inc.

5.       Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
         of March 1, 2004, as amended May 1, 2004, and December 1, 2004, between
         Merrill Lynch Mortgage Capital Inc., as Purchaser and Fieldstone
         Mortgage Company, as Seller, as supplemented by that certain Bring Down
         Letter, dated as of April 21, 2005, from Fieldstone Mortgage Company to
         Merrill Lynch Mortgage Capital Inc.

6.       Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
         of December 1, 2003, as amended September 1, 2004, and February 1,
         2005, between Merrill Lynch Mortgage Capital Inc., as Purchaser and
         Fremont Investment & Loan, as Seller, as supplemented by that certain
         Bring Down Letter, dated as of April 21, 2005, from Fremont Investment
         & Loan to Merrill Lynch Mortgage Capital Inc.

7.       Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
         of January 1, 2004, as amended June 1, 2004, among Merrill Lynch
         Mortgage Capital Inc., as Purchaser and The CIT Group/Consumer Finance,
         Inc., as Seller, as supplemented by that certain Bring Down Letter,
         dated as of April 21, 2005, from The CIT Group/Consumer Finance, Inc.
         to Merrill Lynch Mortgage Capital Inc.

                                      J-1
<PAGE>
8.       Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
         of January 1, 2004, as amended July 1, 2004, and February 1, 2005,
         between Merrill Lynch Mortgage Capital Inc., as Purchaser and WMC
         Mortgage Corp., as Seller, as supplemented by that certain Bring Down
         Letter, dated as of April 21, 2005, from WMC Mortgage Corp. to Merrill
         Lynch Mortgage Capital Inc.

                                      J-2
<PAGE>
                                    EXHIBIT K

                    FORM OF OFFICER'S CERTIFICATE OF TRUSTEE

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Re:      Pooling and Servicing Agreement dated as of March 1, 2005 among Merrill
         Lynch Mortgage Investors, Inc., as depositor, Wells Fargo Bank, N.A.,
         as trustee and Wilshire Credit Corporation, as servicer (the
         "Agreement), relating to, Merrill Lynch Mortgage Investors Trust,
         Mortgage Loan Asset-Backed Certificates, Series 2005-HE1

         I, [identify the certifying individual], a [title] of the Trustee
hereby certify to the Depositor, and its officers, directors and affiliates, and
with the knowledge and intent that they will rely upon this certification, that:

1.  I have reviewed the Monthly Statements delivered pursuant to the
    Agreement since the last Officer's Certificate executed pursuant to
    Section 3.21 of the Agreement [or in the case of the first
    certification, since the Cut-off Date] (the "Trustee Information").

2.  Based on my knowledge, the information in the Monthly Statement, taken
    as a whole, does not contain any untrue statement of a material fact or
    omit to state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were made, not
    misleading as of the date hereof;

3.  Based on my knowledge, the Monthly Statements required to be prepared
    by the Trustee under the Agreement has been prepared and provided in
    accordance with the Agreement; and

4.  I am responsible for reviewing the activities performed by the Trustee
    under the Agreement and the Trustee has, as of the date hereof
    fulfilled its obligations under the Agreement and there are no
    significant deficiencies relating to the Trustee's compliance with the
    Agreement.

Date:
                                           Wells Fargo Bank, N.A.,
                                           as Trustee
                                           By:      ____________________________
                                           Name:    ____________________________
                                           Title:   ____________________________

                                      K-1
<PAGE>
                                    EXHIBIT L

                        OFFICER'S CERTIFICATE OF SERVICER

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
Series 2005-HE1

Re:      Pooling and Servicing Agreement dated as of March 1, 2005 among Merrill
         Lynch Mortgage Investors, Inc., as depositor, Wells Fargo Bank, N.A.,
         as trustee and Wilshire Credit Corporation, as servicer (the
         "Agreement), relating to, Merrill Lynch Mortgage Investors Trust,
         Mortgage Loan Asset-Backed Certificates, Series 2005-HE1

         I, [identify the certifying individual], an authorized representative
of the Servicer hereby certify to the Trustee and the Depositor, and each of
their respective officers, directors and affiliates, and with the knowledge and
intent that they will rely upon this certification, that:

1.  I have reviewed the information required to be delivered to the Trustee
    pursuant to the Agreement (the "Servicing Information").

2.  Based on my knowledge, the information in the Annual Statement of
    Compliance, and all servicing reports, officer's certificates and other
    information relating to the servicing of the Mortgage Loans submitted
    to the Trustee by the Servicer taken as a whole, does not contain any
    untrue statement of a material fact or omit to state a material fact
    necessary to make the statements made, in light of the circumstances
    under which such statements were made, not misleading as of the last
    day of the period covered by the Annual Statement of Compliance;

3.  Based on my knowledge, the Servicing Information required to be
    provided to the Trustee by the Servicer under the Agreement has been
    provided to the Trustee; and

                                      L-1
<PAGE>
4.  I am responsible for reviewing the activities performed by the Servicer
    under the Agreement and based upon the review required hereunder, and
    except as disclosed in the Annual Statement of Compliance, the Annual
    Independent Certified Public Accountant's Servicing Report and all
    servicing reports, officer's certificates and other information
    relating to the servicing of the Mortgage Loans submitted to the
    Trustee by the Servicer, the Servicer has, as of the last day of the
    period covered by the Annual Statement of Compliance fulfilled its
    obligations under this Agreement.

Date:
                                     Wilshire Credit Corporation, as Servicer
                                     By:      ____________________________
                                     Name:    ____________________________
                                     Title:   ____________________________

                                      L-2
<PAGE>
                                    EXHIBIT M

                           MORTGAGE LOAN MODIFICATIONS

The following Mortgage Loans in the Merrill Lynch Mortgage Investors Trust,
Series 2005 - HE1 have been modified, waived altered, or released in writing by
the Servicer as of March 1, 2005:

<TABLE>
<CAPTION>
Servicer Loan No.    Investor Loan No.     Current Rate     Modification Date     Modification Type
-----------------    -----------------     ------------     -----------------     -----------------
<S>                  <C>                   <C>              <C>                   <C>
            459936          4433266426            7.250            12/23/2004      Payment Deferral
            491288            10992078            8.615             1/19/2005      Payment Deferral
            491485            10967521            7.625             1/19/2005      Payment Deferral
</TABLE>

                                      M-1
<PAGE>
                                   EXHIBIT N-1

                         FORM OF CLASS A-1 CAP CONTRACT

                                     N-1-1
<PAGE>
                                   EXHIBIT N-2

                         FORM OF CLASS A-2 CAP CONTRACT

                                     N-2-1
<PAGE>
                                   EXHIBIT N-3

                  FORM OF SUBORDINATED CERTIFICATE CAP CONTRACT

                                     N-3-1
<PAGE>
                                   EXHIBIT O-1

                      ONE-MONTH LIBOR CAP TABLE - CLASS A-1

<TABLE>
<CAPTION>
                  BEGINNING        ENDING               NOTIONAL       INDEX RATE      1ML STRIKE LOWER     UPPER COLLAR
    PERIOD         ACCRUAL         ACCRUAL             BALANCE($)      MULTIPLIER       COLLAR (%) (1)          (%)
    ------        ---------       ---------         --------------     -----------     ----------------     ------------
<S>               <C>             <C>               <C>                <C>             <C>                  <C>
      1            4/21/05         4/25/05           17,218,300.00       10.00              5.506              9.280
      2            4/25/05         5/25/05           16,956,574.79       10.00              5.697              9.280
      3            5/25/05         6/25/05           16,651,389.19       10.00              5.507              9.280
      4            6/25/05         7/25/05           16,304,001.23       10.00              5.698              9.280
      5            7/25/05         8/25/05           15,920,252.87       10.00              5.508              9.280
      6            8/25/05         9/25/05           15,504,869.07       10.00              5.509              9.280
      7            9/25/05         10/25/05          15,061,883.48       10.00              5.700              9.280
      8            10/25/05        11/25/05          14,592,591.28       10.00              5.509              9.280
      9            11/25/05        12/25/05          14,108,891.11       10.00              5.700              9.280
      10           12/25/05        1/25/06           13,633,732.95       10.00              5.510              9.280
      11           1/25/06         2/25/06           13,170,230.65       10.00              5.510              9.280
      12           2/25/06         3/25/06           12,720,106.80       10.00              6.125              9.280
      13           3/25/06         4/25/06           12,282,972.87       10.00              5.512              9.280
      14           4/25/06         5/25/06           11,858,450.95       10.00              5.704              9.280
      15           5/25/06         6/25/06           11,418,727.86       10.00              5.514              9.280
      16           6/25/06         7/25/06           10,990,206.37       10.00              5.727              9.280
      17           7/25/06         8/25/06           10,556,918.09       10.00              5.544              9.280
      18           8/25/06         9/25/06           10,138,757.83       10.00              5.680              9.280
      19           9/25/06         10/25/06           9,668,262.28       10.00              5.873              9.280
      20           10/25/06        11/25/06           9,090,061.89       10.00              6.081              9.280
      21           11/25/06        12/25/06           8,522,572.76       10.00              7.505              9.280
      22           12/25/06        1/25/07            7,984,233.85       10.00              7.431              9.280
      23           1/25/07         2/25/07            7,474,350.23       10.00              7.544              9.280
      24           2/25/07         3/25/07            7,029,777.74       10.00              8.417              9.280
      25           3/25/07         4/25/07            6,690,157.40       10.00              7.577              9.280
      26           4/25/07         5/25/07            6,375,835.42       10.00              7.991              9.280
      27           5/25/07         6/25/07            6,080,574.78       10.00              8.213              9.280
      28           6/25/07         7/25/07            5,795,749.25       10.00              8.575              9.280
      29           7/25/07         8/25/07            5,520,644.05       10.00              8.349              9.280
      30           8/25/07         9/25/07            5,254,904.00       10.00              8.389              9.280
      31           9/25/07         10/25/07           4,998,166.46       10.00              8.669              9.280
      32           10/25/07        11/25/07           4,750,109.78       10.00              8.631              9.280
      33           11/25/07        12/25/07           4,510,609.14       10.00              9.280              9.280
      34           12/25/07        1/25/08            4,279,462.53       10.00              9.195              9.280
      35           1/25/08         2/25/08            4,056,155.59       10.00              9.247              9.280
      36           2/25/08         3/25/08            3,840,385.33       10.00              9.280              9.280
      37           3/25/08         4/25/08            3,631,874.22       10.00              9.268              9.280
</TABLE>

(1)      With respect to any Distribution Date, if One-Month LIBOR (as
         determined by the Cap Contract Counterparty and subject to a cap equal
         to 9.280%) exceeds the Lower Collar, the Trust Fund will receive
         payments pursuant to the Class A-1 Cap Contract.

                                     O-1-1
<PAGE>
                                   EXHIBIT O-2

                      ONE-MONTH LIBOR CAP TABLE - CLASS A-2

<TABLE>
<CAPTION>
                  BEGINNING        ENDING              NOTIONAL        INDEX RATE       LOWER COLLAR        UPPER COLLAR
    PERIOD         ACCRUAL         ACCRUAL             BALANCE($)      MULTIPLIER          (%)(1)               (%)
    ------        ---------       ---------         --------------     -----------     ----------------     ------------
<S>               <C>             <C>               <C>                <C>             <C>                  <C>
      1            04/21/05        04/25/05          19,069,000.00       10.00              5.113              9.300
      2            04/25/05        05/25/05          18,797,682.21       10.00              5.292              9.300
      3            05/25/05        06/25/05          18,479,255.70       10.00              5.116              9.300
      4            06/25/05        07/25/05          18,114,769.70       10.00              5.295              9.300
      5            07/25/05        08/25/05          17,714,498.33       10.00              5.120              9.300
      6            08/25/05        09/25/05          17,284,341.31       10.00              5.121              9.300
      7            09/25/05        10/25/05          16,825,579.04       10.00              5.300              9.300
      8            10/25/05        11/25/05          16,339,941.50       10.00              5.123              9.300
      9            11/25/05        12/25/05          15,836,148.98       10.00              5.302              9.300
      10           12/25/05        01/25/06          15,323,161.85       10.00              5.126              9.300
      11           01/25/06        02/25/06          14,819,297.52       10.00              5.127              9.300
      12           02/25/06        03/25/06          14,329,469.19       10.00              5.699              9.300
      13           03/25/06        04/25/06          13,853,460.83       10.00              5.130              9.300
      14           04/25/06        05/25/06          13,390,877.09       10.00              5.309              9.300
      15           05/25/06        06/25/06          12,887,408.58       10.00              5.135              9.300
      16           06/25/06        07/25/06          12,398,518.16       10.00              5.325              9.300
      17           07/25/06        08/25/06          11,925,305.41       10.00              5.158              9.300
      18           08/25/06        09/25/06          11,467,499.90       10.00              5.169              9.300
      19           09/25/06        10/25/06          10,983,890.71       10.00              5.353              9.300
      20           10/25/06        11/25/06          10,498,886.82       10.00              5.413              9.300
      21           11/25/06        12/25/06           9,919,639.97       10.00              5.921              9.300
      22           12/25/06        01/25/07           9,336,431.59       10.00              6.486              9.300
      23           01/25/07        02/25/07           8,783,576.76       10.00              6.731              9.300
      24           02/25/07        03/25/07           8,282,634.10       10.00              7.461              9.300
      25           03/25/07        04/25/07           7,835,976.85       10.00              6.709              9.300
      26           04/25/07        05/25/07           7,476,591.79       10.00              7.030              9.300
      27           05/25/07        06/25/07           7,149,826.89       10.00              6.916              9.300
      28           06/25/07        07/25/07           6,834,694.63       10.00              7.445              9.300
      29           07/25/07        08/25/07           6,530,232.22       10.00              7.307              9.300
      30           08/25/07        09/25/07           6,235,902.05       10.00              7.303              9.300
      31           09/25/07        10/25/07           5,951,244.72       10.00              7.546              9.300
      32           10/25/07        11/25/07           5,675,930.45       10.00              7.380              9.300
      33           11/25/07        12/25/07           5,409,645.83       10.00              7.792              9.300
      34           12/25/07        01/25/08           5,152,152.56       10.00              7.905              9.300
      35           01/25/08        02/25/08           4,903,380.99       10.00              8.024              9.300
      36           02/25/08        03/25/08           4,662,775.19       10.00              8.590              9.300
      37           03/25/08        04/25/08           4,430,010.51       10.00              8.013              9.300
      38           04/25/08        05/25/08           4,430,010.51       10.00              8.365              9.300
      39           05/25/08        06/25/08           4,430,010.51       10.00              8.208              9.300
      40           06/25/08        07/25/08           4,430,010.51       10.00              8.791              9.300
      41           07/25/08        08/25/08           4,430,010.51       10.00              8.594              9.300
      42           08/25/08        09/25/08           4,430,010.51       10.00              8.583              9.300
      43           09/25/08        10/25/08           4,430,010.51       10.00              8.861              9.300
      44           10/25/08        11/25/08           4,388,338.22       10.00              8.591              9.300
      45           11/25/08        12/25/08           4,256,316.04       10.00              8.892              9.300
      46           12/25/08        01/25/09           4,128,542.51       10.00              8.664              9.300
      47           01/25/09        02/25/09           4,004,901.00       10.00              8.661              9.300
      48           02/25/09        03/25/09           3,885,230.70       10.00              9.300              9.300
      49           03/25/09        04/25/09           3,769,395.74       10.00              8.632              9.300
      50           04/25/09        05/25/09           3,657,267.41       10.00              8.915              9.300
      51           05/25/09        06/25/09           3,548,722.19       10.00              8.625              9.300
</TABLE>

                                     O-2-1
<PAGE>
<TABLE>
<CAPTION>
                  BEGINNING        ENDING              NOTIONAL        INDEX RATE       LOWER COLLAR        UPPER COLLAR
    PERIOD         ACCRUAL         ACCRUAL             BALANCE($)      MULTIPLIER          (%)(1)               (%)
    ------        ---------       ---------         --------------     -----------     ----------------     ------------
<S>               <C>             <C>               <C>                <C>             <C>                  <C>
      52           06/25/09        07/25/09           3,443,640.80       10.00              9.131              9.300
      53           07/25/09        08/25/09           3,341,687.33       10.00              8.823              9.300
      54           08/25/09        09/25/09           3,242,941.74       10.00              8.809              9.300
      55           09/25/09        10/25/09           3,147,340.70       10.00              9.096              9.300
      56           10/25/09        11/25/09           3,054,710.72       10.00              8.794              9.300
      57           11/25/09        12/25/09           2,964,898.40       10.00              9.096              9.300
      58           12/25/09        01/25/10           2,877,901.25       10.00              8.787              9.300
      59           01/25/10        02/25/10           2,793,660.66       10.00              8.770              9.300
      60           02/25/10        03/25/10           2,712,087.10       10.00              9.300              9.300
      61           03/25/10        04/25/10           2,633,093.14       10.00              8.738              9.300
      62           04/25/10        05/25/10           2,556,593.17       10.00              9.022              9.300
      63           05/25/10        06/25/10           2,482,505.84       10.00              8.708              9.300
      64           06/25/10        07/25/10           2,410,750.23       10.00              9.166              9.300
      65           07/25/10        08/25/10           2,341,310.62       10.00              8.847              9.300
      66           08/25/10        09/25/10           2,274,048.04       10.00              8.828              9.300
      67           09/25/10        10/25/10           2,208,890.13       10.00              9.110              9.300
      68           10/25/10        11/25/10           2,145,768.05       10.00              8.794              9.300
      69           11/25/10        12/25/10           2,084,615.81       10.00              9.074              9.300
      70           12/25/10        01/25/11           2,025,367.71       10.00              8.755              9.300
      71           01/25/11        02/25/11           1,967,961.45       10.00              8.735              9.300
      72           02/25/11        03/25/11           1,912,336.86       10.00              9.300              9.300
      73           03/25/11        04/25/11           1,858,435.89       10.00              8.697              9.300
      74           04/25/11        05/25/11           1,806,202.53       10.00              8.978              9.300
</TABLE>

(1)      With respect to any Distribution Date, if One-Month LIBOR (as
         determined by the Cap Contract Counterparty and subject to a cap equal
         to 9.300%) exceeds the Lower Collar, the Trust Fund will receive
         payments pursuant to the Class A-2 Cap Contract.

                                     O-2-2
<PAGE>
                                   EXHIBIT O-3

        ONE-MONTH LIBOR CAP TABLE - SUBORDINATED CERTIFICATE CAP CONTRACT

<TABLE>
<CAPTION>
                  BEGINNING        ENDING              NOTIONAL        INDEX RATE       LOWER COLLAR        UPPER COLLAR
    PERIOD         ACCRUAL         ACCRUAL             BALANCE($)      MULTIPLIER          (%)(1)               (%)
    ------        ---------       ---------         --------------     -----------     ----------------     ------------
<S>               <C>             <C>               <C>                <C>             <C>                  <C>
      1            04/21/05        04/25/05           5,237,300.00       10.00              4.329              8.320
      2            04/25/05        05/25/05           5,237,300.00       10.00              4.514              8.320
      3            05/25/05        06/25/05           5,237,300.00       10.00              4.331              8.320
      4            06/25/05        07/25/05           5,237,300.00       10.00              4.516              8.320
      5            07/25/05        08/25/05           5,237,300.00       10.00              4.333              8.320
      6            08/25/05        09/25/05           5,237,300.00       10.00              4.334              8.320
      7            09/25/05        10/25/05           5,237,300.00       10.00              4.519              8.320
      8            10/25/05        11/25/05           5,237,300.00       10.00              4.336              8.320
      9            11/25/05        12/25/05           5,237,300.00       10.00              4.520              8.320
      10           12/25/05        01/25/06           5,237,300.00       10.00              4.337              8.320
      11           01/25/06        02/25/06           5,237,300.00       10.00              4.338              8.320
      12           02/25/06        03/25/06           5,237,300.00       10.00              4.931              8.320
      13           03/25/06        04/25/06           5,237,300.00       10.00              4.341              8.320
      14           04/25/06        05/25/06           5,237,300.00       10.00              4.526              8.320
      15           05/25/06        06/25/06           5,237,300.00       10.00              4.345              8.320
      16           06/25/06        07/25/06           5,237,300.00       10.00              4.545              8.320
      17           07/25/06        08/25/06           5,237,300.00       10.00              4.370              8.320
      18           08/25/06        09/25/06           5,237,300.00       10.00              4.441              8.320
      19           09/25/06        10/25/06           5,237,300.00       10.00              4.629              8.320
      20           10/25/06        11/25/06           5,237,300.00       10.00              4.759              8.320
      21           11/25/06        12/25/06           5,237,300.00       10.00              5.702              8.320
      22           12/25/06        01/25/07           5,237,300.00       10.00              5.964              8.320
      23           01/25/07        02/25/07           5,237,300.00       10.00              6.146              8.320
      24           02/25/07        03/25/07           5,237,300.00       10.00              6.944              8.320
      25           03/25/07        04/25/07           5,237,300.00       10.00              6.150              8.320
      26           04/25/07        05/25/07           5,237,300.00       10.00              6.515              8.320
      27           05/25/07        06/25/07           5,237,300.00       10.00              6.561              8.320
      28           06/25/07        07/25/07           5,237,300.00       10.00              7.011              8.320
      29           07/25/07        08/25/07           5,237,300.00       10.00              6.831              8.320
      30           08/25/07        09/25/07           5,237,300.00       10.00              6.848              8.320
      31           09/25/07        10/25/07           5,237,300.00       10.00              7.108              8.320
      32           10/25/07        11/25/07           5,237,300.00       10.00              7.003              8.320
      33           11/25/07        12/25/07           5,237,300.00       10.00              7.592              8.320
      34           12/25/07        01/25/08           5,237,300.00       10.00              7.546              8.320
      35           01/25/08        02/25/08           5,237,300.00       10.00              7.634              8.320
      36           02/25/08        03/25/08           5,237,300.00       10.00              8.257              8.320
      37           03/25/08        04/25/08           5,237,300.00       10.00              7.638              8.320
      38           04/25/08        05/25/08           4,810,602.33       10.00              8.040              8.320
      39           05/25/08        06/25/08           4,398,052.16       10.00              8.021              8.320
      40           06/25/08        07/25/08           3,999,327.43       10.00              8.320              8.320
      41           07/25/08        08/25/08           3,613,904.11       10.00              8.262              8.320
      42           08/25/08        09/25/08           3,241,216.46       10.00              8.253              8.320
      43           09/25/08        10/25/08           2,880,763.42       10.00              8.320              8.320
      44           10/25/08        11/25/08           2,610,832.09       10.00              8.268              8.320
      45           11/25/08        12/25/08           2,522,823.88       10.00              8.320              8.320
      46           12/25/08        01/25/09           2,437,694.99       10.00              8.296              8.320
      47           01/25/09        02/25/09           2,355,357.61       10.00              8.290              8.320
      48           02/25/09        03/25/09           2,275,709.24       10.00              8.320              8.320
      49           03/25/09        04/25/09           2,198,657.69       10.00              8.261              8.320
      50           04/25/09        05/25/09           2,124,115.14       10.00              8.320              8.320
      51           05/25/09        06/25/09           2,052,000.60       10.00              8.264              8.320
      52           06/25/09        07/25/09           1,982,228.69       10.00              8.320              8.320
</TABLE>

                                      O-3-1
<PAGE>
<TABLE>
<CAPTION>
                  BEGINNING        ENDING              NOTIONAL        INDEX RATE       LOWER COLLAR        UPPER COLLAR
    PERIOD         ACCRUAL         ACCRUAL             BALANCE($)      MULTIPLIER          (%)(1)               (%)
    ------        ---------       ---------         --------------     -----------     ----------------     ------------
<S>               <C>             <C>               <C>                <C>             <C>                  <C>
      53           07/25/09        08/25/09           1,914,617.73       10.00              8.320              8.320
      54           08/25/09        09/25/09           1,849,164.83       10.00              8.320              8.320
      55           09/25/09        10/25/09           1,785,822.62       10.00              8.320              8.320
      56           10/25/09        11/25/09           1,724,507.08       10.00              8.320              8.320
      57           11/25/09        12/25/09           1,665,127.13       10.00              8.320              8.320
      58           12/25/09        01/25/10           1,607,653.70       10.00              8.320              8.320
      59           01/25/10        02/25/10           1,552,034.38       10.00              8.320              8.320
      60           02/25/10        03/25/10           1,498,208.39       10.00              8.320              8.320
      61           03/25/10        04/25/10           1,446,116.04       10.00              8.319              8.320
      62           04/25/10        05/25/10           1,395,699.20       10.00              8.320              8.320
      63           05/25/10        06/25/10           1,346,902.33       10.00              8.289              8.320
      64           06/25/10        07/25/10           1,299,670.77       10.00              8.320              8.320
      65           07/25/10        08/25/10           1,253,983.55       10.00              8.320              8.320
      66           08/25/10        09/25/10           1,209,757.44       10.00              8.320              8.320
      67           09/25/10        10/25/10           1,166,943.12       10.00              8.320              8.320
      68           10/25/10        11/25/10           1,125,493.72       10.00              8.320              8.320
      69           11/25/10        12/25/10           1,085,364.22       10.00              8.320              8.320
      70           12/25/10        01/25/11           1,046,510.32       10.00              8.309              8.320
      71           01/25/11        02/25/11           1,008,889.74       10.00              8.291              8.320
      72           02/25/11        03/25/11             972,461.63       10.00              8.320              8.320
      73           03/25/11        04/25/11             937,186.55       10.00              8.255              8.320
</TABLE>

(1)      With respect to any Distribution Date, if One-Month LIBOR (as
         determined by the Cap Contract Counterparty and subject to a cap equal
         to 8.320%) exceeds the Lower Collar, the Trust Fund will receive
         payments pursuant to the Subordinated Certificate Cap Contract.

                                     O-3-2
<PAGE>
                                    EXHIBIT P

                                    RESERVED

                                      P-1
<PAGE>
                                   EXHIBIT Q-1

                     MI POLICY - PMI MORTGAGE INSURANCE CO.

                             [Intentionally Omitted]

                                     Q-1-1
<PAGE>
                                   EXHIBIT Q-2

               MI POLICY - MORTGAGE GUARANTY INSURANCE CORPORATION

                             [Intentionally Omitted]

                                     Q-2-1EX-4.1

 

Exhibit 4.1

EXECUTION COPY

THE HOME DEPOT, INC., as Company

and

THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee

Indenture

Dated as of May 4, 2005

 

 

	 	 	 	 	 	 	 
	

	 	ARTICLE 1	 	 	 	 
	

	 	DEFINITIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.01

	 	Certain Terms Defined
	 	 	1	 
	Section 1.02

	 	Other Definitions
	 	 	5	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 2	 	 	 	 
	

	 	SECURITY FORMS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.01

	 	Forms Generally
	 	 	5	 
	Section 2.02

	 	Form of Trustee’s Certificate of Authentication
	 	 	6	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 3	 	 	 	 
	

	 	ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.01

	 	Amount Unlimited; Issuable in Series
	 	 	6	 
	Section 3.02

	 	Authentication and Delivery of Securities
	 	 	8	 
	Section 3.03

	 	Execution of Securities
	 	 	9	 
	Section 3.04

	 	Certificate of Authentication
	 	 	9	 
	Section 3.05

	 	Denomination and Date of Securities; Payments of Interest
	 	 	9	 
	Section 3.06

	 	Global Security Legend
	 	 	10	 
	Section 3.07

	 	Registration, Transfer and Exchange
	 	 	10	 
	Section 3.08

	 	Book-Entry Provisions for Global Securities
	 	 	12	 
	Section 3.09

	 	Mutilated, Defaced, Destroyed, Lost and Stolen Securities
	 	 	13	 
	Section 3.10

	 	Cancellation of Securities
	 	 	14	 
	Section 3.11

	 	Temporary Securities
	 	 	14	 
	Section 3.12

	 	CUSIP and ISIN Numbers
	 	 	15	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 4	 	 	 	 
	

	 	CERTAIN COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.01

	 	Payment of Principal, Premium and Interest on Securities
	 	 	15	 
	Section 4.02

	 	Maintenance of Office or Agency
	 	 	15	 
	Section 4.03

	 	Money for Securities Payments to be Held in Trust
	 	 	16	 
	Section 4.04

	 	Existence
	 	 	17	 
	Section 4.05

	 	Statement by Officers as to Default
	 	 	17	 
	Section 4.06

	 	Waiver of Certain Covenants
	 	 	17	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 5	 	 	 	 
	

	 	REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.01

	 	Events of Default
	 	 	17	 
	Section 5.02

	 	Acceleration
	 	 	18	 

i

 

	 	 	 	 	 	 	 
	Section 5.03

	 	Other Remedies
	 	 	19	 
	Section 5.04

	 	Waiver of Past Defaults
	 	 	19	 
	Section 5.05

	 	Control by Majority
	 	 	20	 
	Section 5.06

	 	Limitation on Suits
	 	 	20	 
	Section 5.07

	 	Rights of Holders to Receive Payment
	 	 	21	 
	Section 5.08

	 	Collection Suit by Trustee
	 	 	21	 
	Section 5.09

	 	Trustee May File Proofs of Claim
	 	 	21	 
	Section 5.10

	 	Priorities
	 	 	21	 
	Section 5.11

	 	Undertaking for Costs
	 	 	22	 
	Section 5.12

	 	Restoration of Rights and Remedies
	 	 	22	 
	Section 5.13

	 	Rights and Remedies Cumulative
	 	 	22	 
	Section 5.14

	 	Delay or Omission Not Waiver
	 	 	22	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 6	 	 	 	 
	

	 	CONCERNING THE TRUSTEE	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.01

	 	Duties and Responsibilities of the Trustee; During Default; Prior to Default
	 	 	23	 
	Section 6.02

	 	Certain Rights of the Trustee
	 	 	24	 
	Section 6.03

	 	Trustee Not Responsible for Recitals, Disposition of Securities or
Application of Proceeds Thereof
	 	 	25	 
	Section 6.04

	 	Trustee and Agents May Hold Securities; Collections, etc
	 	 	25	 
	Section 6.05

	 	Moneys Held by Trustee
	 	 	26	 
	Section 6.06

	 	Notice of Default
	 	 	26	 
	Section 6.07

	 	Compensation and Indemnification of Trustee and Its Prior Claim
	 	 	26	 
	Section 6.08

	 	Right of Trustee to Rely on Officers’ Certificate, etc
	 	 	27	 
	Section 6.09

	 	Persons Eligible for Appointment as Trustee
	 	 	27	 
	Section 6.10

	 	Resignation and Removal; Appointment of Successor Trustee
	 	 	27	 
	Section 6.11

	 	Acceptance of Appointment by Successor
	 	 	28	 
	Section 6.12

	 	Merger, Conversion, Consolidation or Succession to Business of Trustee
	 	 	29	 
	Section 6.13

	 	Preferential Collection of Claims
	 	 	30	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 7	 	 	 	 
	

	 	CONCERNING THE HOLDERS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.01

	 	Evidence of Action Taken by Holders
	 	 	30	 

ii

 

	 	 	 	 	 	 	 
	Section 7.02

	 	Proof of Execution of Instruments and of Holding of Securities; Record Date
	 	 	31	 
	Section 7.03

	 	Who May Be Deemed Owners of Securities
	 	 	31	 
	Section 7.04

	 	Securities Owned by Company Deemed Not Outstanding
	 	 	31	 
	Section 7.05

	 	Record Date for Action by Securityholders
	 	 	32	 
	Section 7.06

	 	Right of Revocation of Action Taken
	 	 	32	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 8	 	 	 	 
	

	 	SECURITYHOLDERS’ MEETINGS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.01

	 	Purposes for Which Meeting May Be Called
	 	 	33	 
	Section 8.02

	 	Manner of Calling Meetings; Record Date
	 	 	33	 
	Section 8.03

	 	Call of Meeting by Company or Securityholders
	 	 	33	 
	Section 8.04

	 	Who May Attend and Vote at Meeting
	 	 	34	 
	Section 8.05

	 	Regulations
	 	 	34	 
	Section 8.06

	 	Manner of Voting at Meetings and Record to be Kept
	 	 	35	 
	Section 8.07

	 	Exercise of Rights of Trustee and Securityholders Not to be Hindered or Delayed
	 	 	35	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 9	 	 	 	 
	

	 	SUPPLEMENTAL INDENTURES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.01

	 	Supplemental Indentures Without Consent of Holders
	 	 	35	 
	Section 9.02

	 	With Consent of Holders
	 	 	36	 
	Section 9.03

	 	Effect of Supplemental Indenture
	 	 	37	 
	Section 9.04

	 	Documents to Be Given to Trustee; Compliance with TIA
	 	 	37	 
	Section 9.05

	 	Notation on Securities in Respect of Supplemental Indentures
	 	 	37	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 10	 	 	 	 
	

	 	CONSOLIDATION, MERGER OR SALE OF ASSETS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.01

	 	When the Company May Merge, Etc
	 	 	38	 
	Section 10.02

	 	Successor Corporation Substituted
	 	 	38	 
	Section 10.03

	 	Opinion of Counsel to Trustee
	 	 	39	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 11	 	 	 	 
	

	 	REDEMPTION OF SECURITIES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 11.01

	 	Applicability of Article
	 	 	39	 
	Section 11.02

	 	Notice of Redemption; Partial Redemptions
	 	 	39	 
	Section 11.03

	 	Payment of Securities Called for Redemption
	 	 	40	 

iii

 

	 	 	 	 	 	 	 
	

	 	ARTICLE 12	 	 	 	 
	

	 	DEFEASANCE AND COVENANT DEFEASANCE	 	 	 	 
	 
	 	 	 	 	 	 
	Section 12.01

	 	Applicability of the Article; Company’s Option to Effect
Defeasance or Covenant Defeasance
	 	 	40	 
	Section 12.02

	 	Legal Defeasance and Discharge
	 	 	41	 
	Section 12.03

	 	Covenant Defeasance
	 	 	41	 
	Section 12.04

	 	Conditions to Legal or Covenant Defeasance
	 	 	42	 
	Section 12.05

	 	Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions
	 	 	43	 
	Section 12.06

	 	Repayment to the Company
	 	 	43	 
	Section 12.07

	 	Reinstatement
	 	 	44	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 13	 	 	 	 
	

	 	SATISFACTION AND DISCHARGE	 	 	 	 
	 
	 	 	 	 	 	 
	Section 13.01

	 	Satisfaction and Discharge of Indenture
	 	 	44	 
	Section 13.02

	 	Application of Trust Money
	 	 	45	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 14	 	 	 	 
	

	 	HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY	 	 	 	 
	 
	 	 	 	 	 	 
	Section 14.01

	 	Company to Furnish Trustee Names and Addresses of Holders
	 	 	45	 
	Section 14.02

	 	Preservation of Information; Communications to Holders
	 	 	46	 
	Section 14.03

	 	Reports by the Trustee
	 	 	47	 
	Section 14.04

	 	Reports by the Company
	 	 	47	 
	 
	 	 	 	 	 	 
	

	 	ARTICLE 15	 	 	 	 
	

	 	MISCELLANEOUS PROVISIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 15.01

	 	Incorporators, Stockholders, Officers and Directors of Company Exempt
from Individual Liability
	 	 	47	 
	Section 15.02

	 	Provisions of Indenture for the Sole Benefit of Parties and Holders
	 	 	48	 
	Section 15.03

	 	Successors and Assigns of Company Bound by Indenture
	 	 	48	 
	Section 15.04

	 	Notices to Holders
	 	 	48	 
	Section 15.05

	 	Officers’ Certificates and Opinions of Counsel; Statements to Be
Contained Therein
	 	 	48	 
	Section 15.06

	 	Payments Due on Saturdays, Sundays and Holidays
	 	 	49	 
	Section 15.07

	 	Conflict of Any Provision of Indenture with Trust Indenture Act
	 	 	49	 
	Section 15.08

	 	New York Law to Govern
	 	 	49	 
	Section 15.09

	 	Third Party Beneficiaries
	 	 	50	 

iv

 

	 	 	 	 	 	 	 
	Section 15.10

	 	Counterparts
	 	 	50	 
	Section 15.11

	 	Effect of Headings
	 	 	50	 
	Section 15.12

	 	Severability
	 	 	50	 

v

 

THE HOME DEPOT, INC.

Reconciliation and tie between Trust Indenture Act of 1939

and this Indenture

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Trust Indenture Act	 	 	 	 	 	Indenture
	 	 	Section	 	 	 	 	 	Section
	 
	 	 	§310	(a)(1)	 	 	 	 	 	6.09
	 
	 	 	 	(a)(2)	 	 	 	 	 	6.09
	 
	 	 	 	(a)(3)	 	 	 	 	 	Not Applicable
	 
	 	 	 	(a)(4)	 	 	 	 	 	Not Applicable
	 
	 	 	 	(a)(5)	 	 	 	 	 	6.09
	 
	 	 	 	(b)	 	 	 	 	 	6.10
	 
	 	 	§311	(a)	 	 	 	 	 	6.13
	 
	 	 	 	(b)	 	 	 	 	 	6.13
	 
	 	 	 	(b)(2)	 	 	 	 	 	14.03(a), 14.03(b)
	 
	 	 	§312	(a)	 	 	 	 	 	14.01, 14.02(a)
	 
	 	 	 	(b)	 	 	 	 	 	14.02(b)
	 
	 	 	 	(c)	 	 	 	 	 	14.02(c)
	 
	 	 	§313	(a)	 	 	 	 	 	14.03(a)
	 
	 	 	 	(b)	 	 	 	 	 	14.03(a)
	 
	 	 	 	(c)	 	 	 	 	 	14.03(a), 14.03(b)
	 
	 	 	 	(d)	 	 	 	 	 	14.03(b)
	 
	 	 	§314	(a)	 	 	 	 	 	14.04
	 
	 	 	 	(b)	 	 	 	 	 	Not Applicable
	 
	 	 	 	(c)(1)	 	 	 	 	 	15.05
	 
	 	 	 	(c)(2)	 	 	 	 	 	15.05
	 
	 	 	 	(c)(3)	 	 	 	 	 	Not Applicable
	 
	 	 	 	(d)	 	 	 	 	 	Not Applicable
	 
	 	 	 	(e)	 	 	 	 	 	15.05
	 
	 	 	§315	(a)	 	 	 	 	 	6.01
	 
	 	 	 	(b)	 	 	 	 	 	6.06, 14.03(a)
	 
	 	 	 	(c)	 	 	 	 	 	6.01
	 
	 	 	 	(d)	 	 	 	 	 	6.01
	 
	 	 	 	(d)(1)	 	 	 	 	 	6.01
	 
	 	 	 	(d)(2)	 	 	 	 	 	6.01
	 
	 	 	 	(d)(3)	 	 	 	 	 	6.01
	 
	 	 	 	(e)	 	 	 	 	 	5.11
	 
	 	 	§316	(a)(1)(A)	 	 	 	 	 	5.05
	 
	 	 	 	(a)(1)(B)	 	 	 	 	 	5.02, 5.04
	 
	 	 	 	(a)(2)	 	 	 	 	 	Not Applicable
	 
	 	 	 	(b)	 	 	 	 	 	5.07
	 
	 	 	 	(c)	 	 	 	 	 	7.02
	 
	 	 	§317	(a)(1)	 	 	 	 	 	5.08
	 
	 	 	 	(a)(2)	 	 	 	 	 	5.09
	 
	 	 	 	(b)	 	 	 	 	 	4.03
	 
	 	 	 318	(a)	 	 	 	 	 	15.07

vi

 

	*	 	This cross-reference table shall not, for any purpose, be deemed to be part of this Indenture.

vii

 

          THIS INDENTURE, dated as of May 4, 2005, among The Home Depot, Inc., a Delaware
corporation (the “Company”), and The Bank of New York Trust Company, N.A. (the “Trustee”),

W I T N E S S E T H:

          WHEREAS, the Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of its unsecured debentures, notes or other evidences of
indebtedness (herein called the “Securities”), to be issued in one or more series as in this
Indenture provided; and

          WHEREAS, all things necessary to make the Indenture a valid indenture and agreement according
to its terms, have been done;

          NOW, THEREFORE:

          In consideration of the premises and the purchases of the Securities by the Holders thereof,
the Company and the Trustee mutually covenant and agree for the equal and proportionate benefit of
the respective Holders from time to time of the Securities as follows:

ARTICLE 1

DEFINITIONS

          SECTION 1.01 Certain Terms Defined. The following terms (except as otherwise
expressly provided or unless the context otherwise clearly requires) for all purposes of this
Indenture and of any indenture supplemental hereto shall have the respective meanings specified in
this Section. All other terms used in this Indenture which are defined in the Trust Indenture Act
or the definitions of which in the Securities Act are referred to in the Trust Indenture Act
(except as herein otherwise expressly provided or unless the context otherwise clearly requires),
shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities
Act as in force at the date of this Indenture. All accounting terms used herein and not expressly
defined shall have the meanings given to them in accordance with generally accepted accounting
principles in the United States (whether or not such is indicated herein). The words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision. The terms defined in this Article
include the plural as well as the singular.

          “Agent Members” has the meaning provided in Section 3.08(a).

          “Board Of Directors” means, with respect to any Person, the Board of Directors of such Person,
or any authorized committee of the Board of Directors of such Person or any officer of such Person
duly authorized by the Board of Directors of such Person to take a specific action.

          “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the Trustee.

 

 

          “Business Day” means any day except a Saturday, Sunday or other day on which commercial banks
in the cities of New York or Atlanta are authorized or obligated by law or executive order to
close.

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

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

          “Company Request” or “Company Order” means a written request or order signed in the name of
the Company by its Chairman of the Board, a Vice Chairman of the Board, its President, Chief
Executive Officer or a Vice President, and by its Chief Financial Officer, Treasurer, an Assistant
Treasurer, its Controller, an Assistant Controller, its Secretary or an Assistant Secretary, and
delivered to the Trustee.

          “Corporate Trust Office” means the corporate trust office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be principally administered,
which office is, at the date as of which this Indenture is dated, located at 100 Ashford Center
North, Suite 520, Atlanta, Georgia 30338, Attention: Corporate Trust Trustee Administration.

          “Default” means any event that is or with the passage of time or the giving of notice or both
would be an Event of Default.

          “Depositary” means The Depository Trust Company, its nominees, and their respective
successors.

          “Event of Default” means any event or condition specified as such in Section 5.01 which shall
have continued for the period of time, if any, therein designated.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          “Government Securities” means direct obligations of, or obligations guaranteed by, the United
States of America, and the payment for which the United States pledges its full faith and credit.

          “Holder,” “Holder of Securities,” “Securityholder” or other similar terms mean the registered
holder of any Security.

          “Indenture” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of particular series of Securities
established as contemplated hereunder.

2

 

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

          “Material Adverse Effect” means a material adverse effect on the business, assets, financial
condition or results of operations of the Company (taken together with its Subsidiaries as a
whole).

          “Maturity,” when used with respect to any Security, means the date on which the principal of
such Security or an installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

          “Notice of Default” has the meaning provided in Section 6.06.

          “Officers’ Certificate” means a certificate signed by the Chairman of the Board, any Vice
Chairman of the Board, the President, Chief Executive Officer or any Vice President of the Company,
and by the Chief Financial Officer, Treasurer, an Assistant Treasurer, the Controller, an Assistant
Controller, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee.

          “Opinion of Counsel” means an opinion in writing signed by legal counsel who may be an
employee of or counsel to the Company or who may be other counsel satisfactory to the Trustee.

          “outstanding”, when used with reference to Securities, subject to the provisions of Article 7
means, as of any particular time, all Securities authenticated and delivered by the Trustee under
this Indenture, except

	 	(a)  	Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
	 
	 	(b)  	Securities, or portions thereof, for the payment or redemption
of which moneys in the necessary amount shall have been deposited in trust with
the Trustee or with any Paying Agent (other than the Company) or shall have
been set aside, segregated and held in trust by the Company (if the Company
shall act as its own Paying Agent), provided that if such Securities are to be
redeemed prior to the maturity thereof, notice of such redemption shall have
been given as herein provided, or provision satisfactory to a Responsible
Officer of the Trustee shall have been made for giving such notice;
	 
	 	(c)  	Securities in substitution for which other Securities shall
have been authenticated and delivered, or which shall have been paid, pursuant
to the terms of Section 3.09 (unless proof satisfactory to the Trustee and the
Company is presented that any of such Securities is held by a person in whose
hands such Security is a legal, valid and binding obligation of the Company);
and

3

 

	 	(d)  	Securities that have been defeased pursuant to Section 13.01.

          “Paying Agent” means any Person authorized by the Company to pay the principal of, premium, if
any, or interest on any Securities on behalf of the Company. The Company may act as Paying Agent
with respect to any Securities issued hereunder.

          “Payment Office,” when used with respect to the Securities of or within any series, means the
place or places where the principal of (and premium, if any) and interest on such Securities are
payable as specified as contemplated by Sections 3.01 and 4.01.

          “Person” means any individual, corporation, partnership, joint stock company, business trust,
trust, unincorporated association, joint venture or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.

          “Physical Securities” means Securities issued pursuant to Section 3.02 in exchange for
interest in the Global Security or pursuant to Section 3.08(b) in registered form substantially in
the form hereinabove recited.

          “principal” wherever used with reference to the Securities or any Security or any portion
thereof, shall be deemed to include “and premium, if any.”

          “Principal Amount” means, when used with respect to any Security, the amount of principal of
such Security that could then be declared due and payable pursuant to Section 5.02.

          “Redemption Price,” when used with respect to any Security to be redeemed, means the price
(including premium, if any) at which it is to be redeemed pursuant to this Indenture.

          “Registrar” has the meaning provided in Section 3.07.

          “Regular Record Date” for the interest payable on any Interest Payment Date on the Securities
of any series means the date specified for that purpose as contemplated by Section 3.01.

          “Responsible Officer” when used with respect to the Trustee means any officer within the
corporate trust department of the Trustee including any vice president, any trust officer, any
assistant vice president, any assistant secretary, any assistant treasurer, or any other officer of
the Trustee customarily performing functions similar to those performed by the persons who at the
time shall be such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Security” or “Securities” means any Security or Securities, as the case may be, authenticated
and delivered under this Indenture.

          “Security Register” has the meaning provided in Section 3.07.

4

 

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

          “Subsidiary” means, as applied, with respect to any Person, any corporation, partnership or
other legal entity of which, in the case of a corporation, more than 50% of the issued and
outstanding capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time capital stock of any other class
or classes of such corporation has or might have voting power upon the occurrence of any
contingency), or, in the case of any partnership or other legal entity, more than 50% of the
ordinary equity capital interests, is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more of its other Subsidiaries or by one or more of such
Person’s other Subsidiaries.

          “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as in force at the
date as of which this Indenture was originally executed, and “TIA”, when used in respect of an
indenture supplemental hereto, means such Act as in force at the time such indenture supplemental
hereto becomes effective.

          “Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee
hereunder; provided, however, that if at any time there is more than one such Person, ”Trustee” as
used with respect to the Securities of any series shall mean only the Trustee with respect to
Securities of that series.

          SECTION 1.02 Other Definitions.

	 	 	 	 	 
	 	 	Defined in Term	 
	 	 	Section	 
	“Covenant Defeasance”
	 	 	13.03	 
	“Legal Defeasance”
	 	 	13.02	 

ARTICLE 2

SECURITY FORMS

5

 

          SECTION 2.01 Forms Generally. The Securities of each series shall be in substantially
the forms as shall be established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon as may be required
to comply with the rules of any securities exchange or as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their execution of the Securities. If
the form of Securities of any series is established by action taken pursuant to a Board Resolution,
a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.02 for the authentication and delivery of such Securities.

          The Trustee’s certificate of authentication on all Securities shall be in substantially the
form set forth in this Article.

          The definitive Securities shall be printed, lithographed or engraved on steel-engraved borders
or may be produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.

          SECTION 2.02 Form of Trustee’s Certificate of Authentication. The Trustee’s
certificate of authentication shall be substantially in the following form:

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

	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST

     COMPANY, N.A.,

     as Trustee	 	 
	 
	

	 	By	 	 	 	 
	

	 	 	 	 	 	 
	

	 	 	 	Authorized Signatory	 	 

ARTICLE 3

ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES

          SECTION 3.01 Amount Unlimited; Issuable in Series. The aggregate principal amount of
Securities which may be authenticated and delivered under this Indenture is unlimited.

          The Securities may be issued from time to time in one or more series. Prior to the issuance
of Securities of any series, there shall be established in or pursuant to (i) a Board Resolution,
(ii) action taken pursuant to a Board Resolution and (subject to Sections 3.03 and 3.04) set forth,
or determined in the manner provided, in an Officers’ Certificate, or (iii) one or more indentures
supplemental hereto:

6

 

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

     (2) the purchase price, denomination and any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Sections 3.03, 3.08, 3.10, 9.05 or 11.02);

     (3) the date or dates on which the principal of and premium, if any, on the Securities of the
series is payable or the method of determination thereof;

     (4) the rate or rates at which the Securities of the series shall bear interest, if any, or
the method of calculating such rate or rates of interest, the date or dates from which such
interest shall accrue or the method by which such date or dates shall be determined, the Interest
Payment Dates on which any such interest shall be payable and the Regular Record Date, if any, for
the interest payable on any Interest Payment Date;

     (5) the place or places where the principal of, premium, if any, and interest, if any, on
Securities of the series shall be payable;

     (6) the place or places where the Securities may be exchanged or transferred;

     (7) the period or periods within which, the price or prices at which, the currency or
currencies (including currency unit or units) in which, and the other terms and conditions upon
which Securities of the series may be redeemed, in whole or in part, at the option of the Company,
if the Company is to have that option, and, if other than as provided in Section 11.02, the manner
in which the particular Securities of such series (if less than all Securities of such series are
to be redeemed) are to be selected for redemption;

     (8) the obligation, if any, of the Company to redeem or purchase Securities of the series in
whole or in part pursuant to any sinking fund or analogous provisions or upon the happening of a
specified event or at the option of a Holder thereof and the period or periods within which, the
price or prices at which, and the other terms and conditions upon which Securities of the series
shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

     (9) if other than denominations of $1,000 and any integral multiple thereof, the denominations
in which Securities of the series shall be issuable;

     (10) if other than U.S. dollars, the currency or currencies (including currency unit or units)
in which payments of principal of, premium, if any, and interest on the Securities of the series
shall or may by payable, or in which the Securities of the series shall be denominated, and the
particular provisions applicable thereto;

     (11) if the payments of principal of, premium, if any, or interest on the Securities of the
series are to be made, at the election of the Company or a Securityholder, in a currency or
currencies (including currency unit or units) other than that in which such Securities are

7

 

denominated or designated to be payable, the currency or currencies (including currency unit
or units) in which such payments are to be made, the terms and conditions of such payments and the
manner in which the exchange rate with respect to such payments shall be determined, and the
particular provisions applicable thereto;

     (12) if the amount of payments of principal of, premium, if any, and interest on the
Securities of the series shall be determined with reference to an index, formula or other method
(which index, formula or method may be based, without limitation, on a currency or currencies
(including currency unit or units) other than that in which the Securities of the series are
denominated or designated to be payable), the index, formula or other method by which such amounts
shall be determined;

     (13) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 5.02 or the method by which such portion shall be determined;

     (14) any modifications of or additions to the Events of Default or the covenants of the
Company set forth herein with respect to Securities of the series;

     (15) if either or both of Section 12.02 and Section 12.03 shall be inapplicable to the
Securities of the series (provided that if no such inapplicability shall be specified, then both
Section 12.02 and Section 12.03 shall be applicable to the Securities of the series);

     (16) if other than the Trustee, the identity of the Registrar and any Paying Agent;

     (17) if the Securities of the series shall be issued in whole or in part in global form, (i)
the Depositary for such global Securities, (ii) the form of any legend in addition to or in lieu of
that in Section 3.07 which shall be borne by such global Security, (iii) whether beneficial owners
of interests in any Securities of the series in global form may exchange such interests for
certificated Securities of such series and of like tenor of any authorized form and denomination,
and (iv) if other than as provided in Section 3.08, the circumstances under which any such exchange
may occur; and

     (18) any other terms of the series (which terms shall not be inconsistent with the provisions
of this Indenture, except as permitted by Section 9.01, but which may modify or delete any
provision of this Indenture insofar as it applies to such series), including any terms which may be
required by or advisable under the laws of the United States of America or regulations thereunder
or advisable (as determined by the Company) in connection with the marketing of Securities of the
series.

     All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided (i) by a Board Resolution, (ii) by action taken pursuant to
a Board Resolution and (subject to Section 3.02-3.05) set forth, or determined in the manner provided,
in an Officers’ Certificate or (iii) in any such indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders, for issuances of additional Securities of such
series.

8

 

     If any of the terms of the Securities of any series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers’ Certificate setting forth, or providing the manner for determining, the
terms of the Securities of such series, and an appropriate record of any action taken pursuant
thereto in connection with the issuance of any Securities of such series shall be delivered to the
Trustee prior to the authentication and delivery thereof.

          SECTION 3.02 Authentication and Delivery of Securities. Upon the execution and
delivery of this Indenture, or from time to time thereafter, Securities may be executed by the
Company and delivered to the Trustee for authentication, and upon delivery to the Trustee of all
documents and certificates as required by this Indenture, the Trustee shall thereupon authenticate
and make available for delivery said Securities to or upon the written order of the Company, signed
by its Chairman of the Board of Directors, or any Vice Chairman of the Board of Directors, or its
President or any Vice President (whether or not designated by a number or numbers or a word or
words added before or after the title “Vice President”) without any further action by the Company.

          SECTION 3.03 Execution of Securities. The Securities shall be signed on behalf of the
Company by its Chairman of the Board of Directors or any Vice Chairman of the Board of Directors or
its President or any Vice President (whether or not designated by a number or numbers or a word or
words added before or after the title “Vice President”). Such signatures may be the manual or
facsimile signatures of the present or any future such officers. In case any officer of the
Company who shall have signed any of the Securities shall cease to be such officer before the
Security so signed shall be authenticated and delivered by the Trustee or disposed of by the
Company, such Security nevertheless may be authenticated and delivered or disposed of as though the
person who signed such Security had not ceased to be such officer of the Company, as the case may
be; and any Security may be signed on behalf of the Company by such persons as, at the actual date
of the execution of such Security shall be the proper officers of the Company, as the case may be,
although at the date of the execution and delivery of this Indenture any such person was not such
officer.

          SECTION 3.04 Certificate of Authentication. Only such Securities as shall bear
thereon a certificate of authentication substantially in the form hereinabove recited, executed by
the Trustee by manual signature of one of its authorized signatories, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Security executed by the Company shall be conclusive evidence that the Security so
authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled
to the benefits of this Indenture.

          SECTION 3.05 Denomination and Date of Securities; Payments of Interest. (a) The
Securities shall be issuable in such denominations as shall be specified as contemplated by Section
3.01. In the absence of any such provisions with respect to the Securities, the Securities shall
be issuable in denominations of $1,000 and any integral multiple thereof. The Securities shall be
numbered, lettered, or otherwise distinguished in such manner or in accordance with such plans as
the officers of the Company executing the same may determine with the approval of the Trustee.

9

 

          Any of the Securities may be issued with appropriate insertions, omissions, substitutions and
variations, and may have imprinted or otherwise reproduced thereon such legend or legends, not
inconsistent with the provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, including those required by Section 3.06, or with
the rules of any securities market in which the Securities are admitted to trading, or to conform
to general usage.

          Each Security shall be dated the date of its authentication, shall bear interest from the
applicable date and shall be payable on the dates specified on the face of the form of Security
above.

          (a) Global Securities. If Securities of or within a series are issuable in whole or in part
in global form, then any such Security of such series shall be deposited with the Trustee as
custodian for the Depositary and registered in the name of Cede & Co., as nominee for the
Depositary. The Global Security shall be deposited on behalf of the purchasers of the Securities
represented thereby with the Trustee, as custodian for the Depositary (or with such other custodian
as the Depositary may direct), and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided.
The aggregate principal amount of the Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary or its nominee as
hereinafter provided.

          (c) The person in whose name any Security is registered at the close of business on any
Regular Record Date with respect to any Interest Payment Date shall be entitled to receive the
interest, if any, payable on such Interest Payment Date notwithstanding any transfer or exchange of
such Security subsequent to the Regular Record Date and prior to such Interest Payment Date, except
if and to the extent the Company shall default in the payment of the interest due on such Interest
Payment Date, in which case such defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, shall be paid to the persons in whose names outstanding
Securities are registered at the close of business on a subsequent record date (which shall be not
less than five Business Days prior to the date of such payment) established by notice given by mail
by or on behalf of the Company to the holders of Securities not less than 15 days preceding such
subsequent record date.

          SECTION 3.06 Global Security Legend. Any Security in global form authenticated and
delivered hereunder shall bear a legend in substantially the following form, or in such other form
as may be necessary or appropriate to reflect the arrangements with or to comply with the
requirements of any Depositary:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY
BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS
SECURITY FOR ALL PURPOSES.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE

10

 

OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S
NOMINEE.

          SECTION 3.07 Registration, Transfer and Exchange. The Securities are issuable only in
registered form. The Company will keep at each office or agency (the “Registrar”) for each series
of Securities a register or registers (the “Security Register(s)”) in which, subject to such
reasonable regulations as it may prescribe, it will register, and will register the transfer of,
Securities as in this Article provided. Such Security Register or Security Registers shall be in
written form in the English language or in any other form capable of being converted into such form
within a reasonable time. At all reasonable times such Security Register or Security Registers
shall be open for inspection by the Trustee.

          Upon due presentation for registration of transfer of any Security of any series at each such
office or agency, the Company shall execute and the Trustee shall authenticate and make available
for delivery in the name of the designated transferee or transferees a new Security or Securities
of the same series, in each case, of any authorized denominations and of a like aggregate Principal
Amount.

          At the option of the Holder, Securities of any series (except a Security in global form) may
be exchanged for other Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and Stated Maturity, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and make available for delivery, the Securities which
the Holder making the exchange is entitled to receive.

          A Holder may transfer a Security only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of this Indenture. No such
transfer shall be effected until, and such transferee shall succeed to the rights of a Holder only
upon, final acceptance and registration of the transfer by the Registrar in the Security Register.
Prior to the registration of any transfer by a Holder as provided herein, the Company, the Trustee,
and any agent of the Company shall treat the person in whose name the Security is registered as the
owner thereof for all purposes whether or not the Security shall be overdue, and neither the
Company, the Trustee, nor any such agent shall be affected by notice to the contrary. Furthermore,
any Holder of a Global Security shall, by acceptance of such Global Security, agree that transfers
of beneficial interests in such Global Security may be effected only through a book entry system
maintained by the Holder of such Global Security (or its agent) and

11

 

that ownership of a beneficial interest in the Security shall be required to be reflected in a
book entry. When Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer or to exchange them for an equal Principal Amount of Securities of other
authorized denominations, the Registrar shall register the transfer or make the exchange as
requested if the requirements for such transactions set forth herein are met. To permit
registrations of transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Securities at the Registrar’s request.

          The Company may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any exchange or registration of transfer of
Securities (other than any such transfer taxes or other similar governmental charge payable upon
exchanges pursuant to Section 3.11, 9.05 or 11.03). No service charge to any Holder shall be made
for any such transaction.

          The Company shall not be required to exchange or register a transfer of (a) any Securities of
any series for a period of 15 days next preceding the first mailing of notice of redemption of
Securities of that series to be redeemed, or (b) any Securities of any series selected, called or
being called for redemption except, in the case of any Security of any series where public notice
has been given that such Security is to be redeemed in part, the portion thereof not so to be
redeemed.

          All Securities issued upon any transfer or exchange of Securities shall be valid obligations
of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture,
as the Securities surrendered upon such transfer or exchange.

          SECTION 3.08 Book-Entry Provisions for Global Securities. (a) Each Global Security
initially shall (i) be registered in the name of the Depositary for such Global Securities or the
nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and
(iii) bear legends as set forth in Section 3.06.

          Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under
this Indenture with respect to any Global Security held on their behalf by the Depositary, or the
Trustee as its custodian, or under the Global Security, and the Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee, from giving effect to
any written certification, proxy or other authorization furnished by the Depositary or impair, as
between the Depositary and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Security.

          (b) Transfers of a Global Security shall be limited to transfers of such Global Security in
whole, but not in part, to the Depositary for such series, its successors or their respective
nominees. If at any time the Depositary for the Securities of such series notifies the Company
that it is unwilling or unable to continue as Depositary or if at any time the Depositary shall no
longer be qualified to serve as the Depositary, the Company shall appoint a successor depositary
with respect to the Securities of such series. If a successor depositary for the Securities of
such series is not appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Trustee, upon receipt of a

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Company Order for the authentication and delivery of definitive Securities of such series of
like tenor, will authenticate and deliver Securities of such series of like tenor and terms in
definitive form in an aggregate Principal Amount equal to the Principal Amount of the Global
Securities or Securities of such series in exchange for such Global Security or Securities.

          The Company may at any time and in its sole discretion determine that the Securities of a
series issued in the form of one or more Global Securities shall no longer be represented by such
Global Securities. In such event, the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Securities of such series of like
tenor, will authenticate and deliver Securities of such series of like tenor and terms in
definitive form in an aggregate Principal Amount equal to the Principal Amount of the Global
Security or Securities of such series in exchange for such Global Security or Securities.
Interests of beneficial owners in a Global Security may be transferred in accordance with the rules
and procedures of the Depositary. In addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global Security, if (i) the
Depositary (A) notifies the Company that it is unwilling or unable to continue as Depositary for
such Global Security, and a successor depositary is not appointed by the Company within 90 days of
such notice, (B) ceases to be qualified to serve as Depositary and a successor depositary is not
appointed by the Company within 90 days of such notice, (ii) the Company executes and delivers to
the Trustee a Company Order that such Global Security shall be so transferable, registrable and
exchangeable, and such transfers shall be registrable, or (iii) an Event of Default of which the
Trustee has actual notice has occurred and is continuing and the Registrar has received a request
from the Depositary to issue such Physical Securities.

          (c) Any beneficial interest in one of the Global Securities that is transferred to a person
who takes delivery in the form of an interest in the other Global Security will, upon transfer,
cease to be an interest in such Global Security and become an interest in the other Global Security
and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Security for as long as it
remains such an interest.

          (d) In connection with any transfer of a portion of the beneficial interests in a Global
Security to beneficial owners pursuant to paragraph (b) of this Section 3.08, the Registrar shall
reflect on its books and records the date and a decrease in the Principal Amount of such Global
Security in an amount equal to the Principal Amount of the beneficial interest in such Global
Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and
make available for delivery, one or more Physical Securities of like tenor and amount.

          (e) In connection with the transfer of an entire Global Security to beneficial owners pursuant
to paragraph (b) of this Section, such Global Security shall be deemed to be surrendered to the
Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and
deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial
interest in such Global Security, an equal Principal Amount of Physical Securities of authorized
denominations.

          (f) The registered holder of a Global Security may grant proxies and otherwise authorize any
person, including Agent Members and persons that may hold interests

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through Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities of such series.

          SECTION 3.09 Mutilated, Defaced, Destroyed, Lost and Stolen Securities. In case any
temporary or definitive Security shall become mutilated, defaced or be apparently destroyed, lost
or stolen, the Company in its discretion may execute, and upon the written request of any officer
of the Company and delivery to the Trustee of all documents and certificates as required by this
Indenture, the Trustee shall authenticate and make available for delivery, a new Security of the
same series bearing a number not contemporaneously outstanding, in exchange and substitution for
the mutilated or defaced Security, or in lieu of and substitution for the Security so apparently
destroyed, lost or stolen. In every case the applicant for a substitute Security shall furnish to
the Company and the Trustee and any agent of the Company or the Trustee such security or indemnity
as may be required by each of them to indemnify and defend and to save each of them harmless and,
in every case of destruction, loss or theft evidence to their satisfaction of the apparent
destruction, loss or theft of such Security and of the ownership thereof.

          Upon the issuance of any substitute Security, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the Trustee) connected therewith. In
case any Security which has matured or is about to mature, or has been called for redemption in
full, shall become mutilated or defaced or be apparently destroyed, lost or stolen, the Company
may, instead of issuing a substitute Security of the same series, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated or defaced Security), if the
applicant for such payment shall furnish to the Company and to the Trustee and any agent of the
Company or the Trustee such security or indemnity as any of them may require to save each of them
harmless from all risks, however remote, and, in every case of apparent destruction, loss or theft,
the applicant shall also furnish to the Company and the Trustee and any agent of the Company or the
Trustee evidence to their satisfaction of the apparent destruction, loss or theft of such Security
and of the ownership thereof.

          Every substitute Security issued pursuant to the provisions of this Section by virtue of the
fact that any Security is apparently destroyed, lost or stolen shall constitute an additional
contractual obligation of the Company whether or not the apparently destroyed, lost or stolen
Security shall be at any time enforceable by anyone and shall be entitled to all the benefits of
(but shall be subject to all the limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities duly authenticated and delivered hereunder. All
Securities shall be held and owned upon the express condition that, to the extent permitted by law,
with respect to the holder of a substitute Security, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, or apparently destroyed, lost or
stolen Securities and shall preclude any and all other rights or remedies notwithstanding any law
or statute existing or hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.

          SECTION 3.10 Cancellation of Securities. All Securities surrendered for payment,
redemption, registration of transfer or exchange, if surrendered to the Company or any agent of the
Company or the Trustee, shall be delivered to the Trustee for cancellation or, if surrendered to
the Trustee, shall be cancelled by it; and no Securities shall be issued in lieu

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thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee
shall dispose of cancelled Securities in accordance with its customary procedures. If the Company
shall acquire any of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.

          SECTION 3.11 Temporary Securities. Pending the preparation of definitive Securities
of any series, the Company may execute and the Trustee shall authenticate and make available for
delivery temporary Securities of such series (printed, lithographed, typewritten or otherwise
reproduced, in each case in form satisfactory to the Trustee). Temporary Securities shall be
issuable as registered Securities of such series without coupons, of any authorized denomination,
and substantially in the form of the definitive Securities of such series but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Company with the concurrence of the Trustee. Temporary Securities may contain such
reference to any provisions of this Indenture as may be appropriate. Every temporary Security
shall be executed by the Company and be authenticated by the Trustee upon the same conditions and
in substantially the same manner, and with like effect, as the definitive Securities of such
series. Without unreasonable delay the Company shall execute and shall furnish definitive
Securities of such series and thereupon temporary Securities of such series may be surrendered in
exchange therefor without charge at each office or agency to be maintained by the Company for the
purpose pursuant to Section 4.02, and upon delivery to the Trustee of all documents and
certificates as required by this Indenture, the Trustee shall authenticate and make available for
delivery in exchange for such temporary Securities a like aggregate principal amount of definitive
Securities of such series of authorized denominations. Until so exchanged the temporary Securities
of such series shall be entitled to the same benefits under this Indenture as definitive Securities
of such series.

          SECTION 3.12 CUSIP and ISIN Numbers. The Company in issuing the Securities of any
series may use a “CUSIP” and “ISIN” number (if then generally in use), and, if so, the Trustee
shall use the CUSIP numbers or ISIN numbers, as the case may be, in notices of redemption or
exchange as a convenience to Holders of such series; provided that any such notice shall state that
no representation is made as to the correctness of such numbers either as printed on the Securities
or as contained in any notice of redemption or exchange and that reliance may be placed only on the
other identification numbers printed on the Securities and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company shall promptly notify the
Trustee of any change in the CUSIP numbers or ISIN numbers.

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ARTICLE 4

CERTAIN COVENANTS

          SECTION 4.01 Payment of Principal, Premium and Interest on Securities. The Company,
for the benefit of each series of the Securities, will duly and punctually pay or cause to be paid
the principal of and any premium and interest on the Securities of that series in accordance with
the terms of such Securities and this Indenture.

          SECTION 4.02 Maintenance of Office or Agency. The Company will maintain a Payment
Office where Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer or exchange, and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations, surrenders,
notices, and demands may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby initially appoints the Trustee at its office or agency as its agent to receive all
such presentations, surrenders, notices and demands.

     The Company may also from time to time designate one or more other offices or agencies where
the Securities of one or more series may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain an office or
agency in accordance with the requirements set forth above for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.

          SECTION 4.03 Money for Securities Payments to be Held in Trust. (a) If the Company
shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on
or before each due date of the principal of or any premium or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and any premium and interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.

          (b) Whenever the Company shall have one or more Paying Agents for any series of Securities, it
will, prior to each due date of the principal of or any premium or interest on any Securities of
that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held
as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to act.

          (c) The Company will cause each Paying Agent for any series of Securities (other than the
Trustee) to execute and deliver to the Trustee an instrument in which such Paying Agent will agree
with the Trustee, subject to the provisions of this Section 4.03, that such Paying Agent will (i)
comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent (ii) hold
all sums held by it for the payment of the principal of (and premium, if any) or interest,

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if any, on the Securities of that series in trust for the benefit of the Holders until such
sums shall be paid to such Holders or otherwise disposed of as herein provided; (iii) give the
Trustee notice of any default by the Company (or any other obligor upon the Securities) in the
making of any payment of principal (and premium, if any) or interest, if any, on the Securities of
that series; and (iv) during the continuance of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment in respect of the Securities of
that series, and upon the written request of that Trustee, forthwith pay to the Trustee all sums
held in trust by such Paying Agent for payment in respect of the Securities of that series.

          (d) The Company may at any time, for the purpose of obtaining the satisfaction and discharge
of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to
pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be
held by the Trustee upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent
will be released from all further liability with respect to such money.

          (e) Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or any premium or interest on any Security of any series
and remaining unclaimed for two years after such principal, premium, or interest has become due and
payable will be paid to the Company upon a Company Request (or, if then held by the Company, will
be discharged from such trust); and the Holder of such Security will thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company cause to be published
once, in a newspaper published in the English language, customarily published on each Business Day
and of general circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which will not be less than 30
calendar days from the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

          SECTION 4.04 Existence. Subject to Article 10, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its existence, rights
(charter and statutory), and franchises; provided, however, that the Company will not be required
to preserve any such right or franchise if the Board of Directors determines that the preservation
thereof is no longer desirable in the conduct of the business of the Company and that the loss
thereof will not result in a Material Adverse Effect.

          SECTION 4.05 Statement by Officers as to Default. The Company will deliver to the
Trustee, within 120 calendar days after the end of each fiscal year of the Company ending after the
first date any series of Securities issued under this Indenture is outstanding, an Officers’
Certificate signed by the principal executive officer, principal financial officer, principal
accounting officer or treasurer of the Company stating whether or not to the knowledge of such
person after due inquiry the Company is in default in the performance and observance of any of the
terms, provisions, and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company is in default, specifying all such
defaults and the nature and status thereof of which such person may have such knowledge. The

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Company shall deliver to the Trustee, as soon as possible and in any event within five days
after the Company becomes aware of the occurrence of any Event of Default or an event which, with
notice or the lapse of time or both, would constitute an Event of Default, an Officers’ Certificate
setting forth the details of such Event of Default or default and the action which the Company
proposes to take with respect thereto.

          SECTION 4.06 Waiver of Certain Covenants. The Company may omit in any particular
instance to comply with any term, provision, or condition set forth in the provisions of any
supplemental indenture specified in such supplemental indenture, with respect to the Securities of
any series if the Holders of a majority in Principal Amount of all outstanding Securities of such
series shall, by act of such Holders in accordance with Section 7.01, either waive such compliance
in such instance or generally waive compliance with such term, provision, or condition, but no such
waiver will extend to or affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision, or condition will remain in full
force and effect.

ARTICLE 5

REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT

          SECTION 5.01 Events of Default. Each of the following events constitutes an “EVENT OF
DEFAULT” wherever used herein with respect to Securities of any series:

          (a) default for 30 days in the payment when due of interest on the Securities of that series;

          (b) default in payment when due of the principal of or premium, if any, on the Securities of
that series;

          (c) default for 90 days after written notice to the Company by the Trustee or by the Holders
of not less than 25% in Principal Amount of Securities of that series then outstanding in the
performance of any covenant or agreement in the Indenture or the Securities;

          (d) the entry by a court having jurisdiction in the premises of (i) a decree or order for
relief in respect of the Company in an involuntary case or proceeding under any applicable federal
or state bankruptcy, insolvency, reorganization, or other similar law or (ii) a decree or order
adjudging the Company bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition of or in respect of the Company under any
applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator, or other similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and in effect for a period of
60 consecutive calendar days;

          (e) the commencement by the Company of a voluntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization, or other similar law or of any other case
or proceeding to be adjudicated bankrupt or insolvent, or the consent by it to the

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entry of a decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency, reorganization, or other
similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it,
or the filing by it of a petition or answer or consent seeking reorganization or relief with
respect to the Company under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or other similar official of the Company or of any substantial part of its property
pursuant to any such law, or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as they become due, or the
taking of corporate action by the Company in furtherance of any such action; or

          (f) any other Event of Default provided with respect to Securities of that series.

          Upon receipt by the Trustee of any Notice of Default pursuant to this Section 5.01, a record
date shall automatically and without any other action by any Person be set for the purpose of
determining the Holders of outstanding Securities of the applicable series entitled to join in such
Notice of Default, which record date shall be the close of business on the day the Trustee receives
such Notice of Default. The Holders of outstanding Securities of the applicable series on such
record date (or their duly appointed agents), and only such Persons, shall be entitled to join in
such Notice of Default, whether or not such Holders remain Holders after such record date.

          SECTION 5.02 Acceleration. (a) If any Event of Default (other than an Event of
Default specified in clause (d) or (e) of Section 5.01 hereof) occurs and is continuing, the
Trustee by notice to the Company or the Holders of at least 25% in aggregate Principal Amount of
the then outstanding Securities of that series by written notice to the Company and the Trustee,
may declare the unpaid principal of, premium, if any, and any accrued and unpaid interest on all
the Securities of the affected series to be due and payable immediately. Except as set forth
above, upon such declaration the principal of, premium, if any, and interest shall be due and
payable immediately. If an Event of Default specified in clause (d) or (e) of Section 5.01 hereof
occurs with respect to the Company the unpaid principal of, premium, if any, and any accrued and
unpaid interest on all the Securities shall ipso facto become and be immediately due and payable
without further action or notice on the part of the Trustee or any Holder.

          (b) At any time after such a declaration of acceleration with respect to the Securities of any
series has been made and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article 5 provided, the Holders of a majority in Principal
Amount of the outstanding Securities of such series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if (i) the Company has paid or
deposited with the Trustee a sum sufficient to pay (A) all overdue interest on all of the
Securities of that series, (B) the principal of (and premium, if any, on) Securities of that series
which has become due otherwise than by such declaration of acceleration and any interest thereon at
the rate or rates prescribed therefor in the Securities of that series, (C) to the extent that
payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed
therefor in the Securities of that series, and (D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements, and advances of the Trustee and
its agents and counsel and (ii) all Events of Default with respect to the Securities

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of that series, other than the non-payment of the principal of the Securities of that series
which have become due solely by such declaration of acceleration, have been cured or waived as
provided in Section 5.04. No such rescission will affect any subsequent default or impair any
right consequent thereon.

          SECTION 5.03 Other Remedies. If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may pursue any available remedy to collect the payment
of principal or interest on the Securities of such series or to enforce the performance of any
provision of the Securities of such series or this Indenture.

          The Trustee may maintain a proceeding even if it does not possess any of the Securities of
such series or does not produce any of them in the proceeding and any such proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been recovered. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event
of Default. All remedies are cumulative to the extent permitted by law.

          SECTION 5.04 Waiver of Past Defaults. The Holders of not less than a majority in
aggregate Principal Amount of the Securities of any series then outstanding by written notice to
the Trustee may on behalf of the Holders of all of the Securities of such series waive any existing
Default or Event of Default and its consequences under this Indenture except a continuing Default
or Event of Default in the payment of the principal of, premium, if any, or interest on any
Security of such series. The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to waive any past default hereunder. If a record date
is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons,
shall be entitled to waive any default hereunder, whether or not such Holders remain Holders after
such record date. Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other Default or impair any right consequent
thereon.

          SECTION 5.05 Control by Majority. With respect to the Securities of any series, the
Holders of a majority in aggregate Principal Amount of the then outstanding Securities of that
series 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 on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture, that the Trustee in good faith
determines may be unduly prejudicial to the rights of other Holders of that series or that may
involve or cause the Trustee any potential liability. The Trustee may take any other action which
it deems proper which is not inconsistent with any such direction.

          Upon receipt by the Trustee of any such direction with respect to the Securities of such
series, a record date shall automatically and without any other action by any Person be set for
determining the Holders of outstanding Securities of such series entitled to join in such
direction, which record date shall be the close of business on the day the Trustee receives such

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direction. The Holders of outstanding Securities of such series on such record date (or their
duly appointed agents), and only such Persons, shall be entitled to join in such direction, whether
or not such Holders remain Holders after such record date.

          SECTION 5.06 Limitation on Suits. A Holder of any Security of any series may pursue a
remedy with respect to this Indenture or the Securities of the applicable series only if:

          (a) the Holder gives to the Trustee written notice of a continuing Event of Default;

          (b) the Holders of at least 25% in aggregate Principal Amount of the then outstanding
Securities of that series make a written request to the Trustee to pursue the remedy;

          (c) such Holder or Holders provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;

          (d) during the 90-day period specified in (e) below, the Holders of a majority in aggregate
Principal Amount of the then outstanding Securities of such series do not give the Trustee a
direction inconsistent with the request; and

          (e) the Trustee does not comply with the request within 90 days after receipt of the notice,
request and the offer of indemnity.

          A Holder may not use this Indenture to prejudice the rights of another Holder of Securities of
the same series in case of any Event of Default described in clause (a), (b) or (f) of Section 5.01
or of another Holder of any series of Securities in the case of any Event of Default described in
clause (c), (d) or (e) of Section 5.01. A Holder may not use this Indenture to obtain a preference
or priority over another Holder of Securities of the same series in case of any Event of Default
described in clause (a), (b) or (f) of Section 5.01 or of another Holder of any series of
Securities in the case of any Event of Default described in clause (c), (d) or (e) of Section 5.01.

          SECTION 5.07 Rights of Holders to Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of principal, premium, if
any, and interest on any Security, on or after the respective due dates expressed in such Security,
or to bring suit for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of the Holder.

          SECTION 5.08 Collection Suit by Trustee. If an Event of Default specified in Section
5.01 hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company or any other obligor for the whole amount of
principal, premium, if any, and interest remaining unpaid on any Securities of such series and
interest on overdue principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover amounts due the Trustee under Section 6.07 hereof, including the costs and
expenses of collection, including the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel.

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          SECTION 5.09 Trustee May File Proofs of Claim. The Trustee is authorized to file such
proofs of claim and other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor upon the Securities), its creditors or
its property and shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the
event that the Trustee shall consent to the making of such payments directly to the Holders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07 hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.07 hereof out of the estate in any such proceeding, shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the Holders may be entitled
to receive in such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities of any series or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.

          SECTION 5.10 Priorities. If the Trustee collects any money pursuant to this Article,
it shall pay out the money in the following order:

          First: to the Trustee, its agents and attorneys for amounts due under Section 6.07, including
payment of all compensation, expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;

          Second: to Holders for amounts due and unpaid on the Securities of any series for principal,
premium, if any, and interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Securities of such series for principal, premium, if any and
interest, respectively; and

          Third: to the Company or to such party as a court of competent jurisdiction shall direct. The
Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section
5.10 upon five Business Days prior notice to the Company.

          SECTION 5.11 Undertaking for Costs. In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of
Securities of the affected series pursuant to Section 5.07 hereof, a suit by Holders of more than
10% in aggregate Principal Amount of the then outstanding Securities of any series in the case of

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any suit relating to or arising under clause (a), (b), (c) or (f) of Section 5.01, or a suit
by Holders of more than 10% in aggregate Principal Amount of the then all outstanding Securities in
the case of any suit relating to or arising under clause (d) or (e) of Section 5.01.

          SECTION 5.12 Restoration of Rights and Remedies. If the Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding
has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding has been instituted.

          SECTION 5.13 Rights and Remedies Cumulative. Except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the
last paragraph of Section 3.09, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

          SECTION 5.14 Delay or Omission Not Waiver. No delay or omission of the Trustee or of
any Holder of Securities of any series to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such Event of Default
or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be.

ARTICLE 6

CONCERNING THE TRUSTEE

          SECTION 6.01 Duties and Responsibilities of the Trustee; During Default; Prior to
Default. The Trustee, with respect to the Securities of any series, prior to the occurrence of
an Event of Default with respect to the Securities of such series and after the curing or waiving
of all Events of Default with respect to the Securities of such series which may have occurred,
undertakes to perform such duties and only such duties with respect to such series as are
specifically set forth in this Indenture. In case an Event of Default with respect to the
Securities of a series has occurred (and is continuing which has not been cured or waived) the
Trustee shall exercise such of the rights and powers vested in it by this Indenture with respect to
such series, 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.

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

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

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

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

          (d) the Trustee shall not be liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the holders given as provided in Section 5.05
or otherwise exercising any trust or power conferred upon the Trustee, under this Indenture.

          None of the provisions contained in this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any potential or actual liability (financial or otherwise) in the
performance of any of its duties or in the exercise of any of its rights or powers, if there shall
be reasonable ground for believing that the repayment of such funds or adequate indemnity against
such liability is not reasonably assured to it. This Section 6.01 is in furtherance of and subject
to Sections 315 and 316 of the Trust Indenture Act.

          Whether or not therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the Trustee shall be subject
to the provisions of this Article 6.

          SECTION 6.02 Certain Rights of the Trustee. In furtherance of and subject to the
Trust Indenture Act, and subject to Section 6.01:

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

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          (b) any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by an Officers’ Certificate (unless other evidence in respect thereof be
herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the secretary or an assistant secretary of the Company;

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

          (d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Holders of the Securities of
any series pursuant to the provisions of this Indenture, unless such Holders shall have offered and
provided to the Trustee reasonable security or indemnity satisfactory to it against the costs,
expenses and liabilities which might be incurred therein or thereby; but nothing herein contained
shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default
(which has not been cured or waived) with respect to the Securities of any series, to exercise such
of the rights and powers vested in it by this Indenture, and to 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;

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

          (f) 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, appraisal, bond, debenture, note, coupon, security, or other paper or document
unless requested in writing so to do by the holders of not less than a majority in aggregate
Principal Amount of all the Securities then outstanding; provided 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 Indenture, the Trustee may require
indemnity satisfactory to it against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Company;

          (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys not regularly in its employ and 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 it hereunder;

          (h) the rights, privileges, protections, immunities and benefits given to the Trustee under
this Indenture, including, without limitation, its right to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent,
custodian and other Person employed to act hereunder;

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          (i) the Trustee shall not be deemed to have notice of any Default or Event of Default 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 Securities and this Indenture; and

          (j) The Trustee may request that the Company deliver an Officers’ Certificate setting forth
the names of individuals and/or titles of officers authorized at such time to take specified
actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person
authorized to sign an Officers’ Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superceded.

          SECTION 6.03 Trustee Not Responsible for Recitals, Disposition of Securities or
Application of Proceeds Thereof. The recitals contained herein and in the Securities, except
the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and
the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the Securities, except
that the Trustee represents, that it is duly authorized to execute and deliver this Indenture,
authenticate the Securities and perform its obligations hereunder and that the statements made by
it in a Statement of Eligibility on Form T-1 supplied to the Company, are true and accurate,
subject to the qualifications set forth therein. The Trustee shall not be liable or accountable in
any manner for the use or application by the Company of any of the Securities or of the proceeds
thereof.

          SECTION 6.04 Trustee and Agents May Hold Securities; Collections, etc. The Trustee or
any of its affiliates or any agent of the Company or the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Securities, subject to Sections 6.10 and 6.13 with the
same rights it would have if it were not the Trustee or such agent and may otherwise deal with the
Company and receive, collect, hold and retain collections from the Company with the same rights it
would have if it were not the Trustee or such agent.

          SECTION 6.05 Moneys Held by Trustee. All moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by mandatory provisions
of law. Neither the Trustee nor any agent of the Company or the Trustee shall be under any
liability for interest on any moneys received by it hereunder, except as otherwise agreed with the
Company.

          SECTION 6.06 Notice of Default. If any Default or any Event of Default occurs and is
continuing with respect to the Securities of any series and if such Default or Event of Default is
actually known to a Responsible Officer of the Trustee, the Trustee shall mail to each Holder of
Securities of such series in the manner and to the extent provided in Trust Indenture Act Section
313(c) notice of the Default or Event of Default (“Notice of Default”) within 90 days after it
occurs, unless such Default or Event of Default has been cured; provided, however, that, except in
the case of a default in the payment of the principal of, premium, if any, or interest on any
Security of such series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of directors

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and/or Responsible Officers of the Trustee in good faith determine that the withholding of
such notice is in the interest of the Holders of Securities of such series.

          SECTION 6.07 Compensation and Indemnification of Trustee and Its Prior Claim. The
Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as shall be agreed in writing between the Company and the Trustee
(which shall not be limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Company covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its counsel and of all
agents and other persons not regularly in its employ) except any such expense, disbursement or
advance as may arise from its negligence or bad faith. The Company also covenants to indemnify the
Trustee and each predecessor Trustee for, and to hold it harmless against, any and all loss,
liability, damage, claim or expense, including taxes (other than taxes based on the income of the
Trustee) incurred without negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of this Indenture or the trusts hereunder and its duties
hereunder, including without limitation the costs and expenses of defending itself against or
investigating any claim (whether asserted by the Company, a Holder or any other Person). The
obligations of the Company under this Section to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and each predecessor Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. Such financial obligations of the Company identified
in this Section shall be a senior claim to that of the Securities of each series upon all property
and funds held or collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Securities, and the Securities of each series are hereby subordinated to
such senior claim.

          When the Trustee incurs expenses or renders services in connection with an Event of Default
specified in Section 5.01(d) or Section 5.01(e), the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for the services are intended to constitute expenses
of administration under any applicable Federal or state bankruptcy, insolvency or other similar
law.

          SECTION 6.08 Right of Trustee to Rely on Officers’ Certificate, etc. Subject to
Sections 6.01 and 6.02, whenever in the administration of the trusts of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of
the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate
delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted
by it under the provisions of this Indenture upon the faith thereof.

          SECTION 6.09 Persons Eligible for Appointment as Trustee. The Trustee hereunder shall
at all times be a corporation, national association or other appropriate entity having a combined
capital and surplus of at least $50,000,000, and which is eligible in accordance with the
provisions of Section 310(a) of the Trust Indenture Act. If such corporation

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publishes reports of condition at least annually, pursuant to law or to the requirements of a
Federal, State or District of Columbia supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published.

          SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee. (a) The
Trustee may at any time resign with respect to the Securities of one or more series by giving
written notice of resignation to the Company and to the Holders of Securities of such series, such
notice to the Holders to be given by mailing (by first class mail) the same within 30 days after
such notice is given to the Company. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument in duplicate, executed by authority of
the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee
and one copy to the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 60 days after the mailing of such notice of resignation, the
resigning trustee may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor trustee, or any Securityholder of the affected series who has
been a bona fide holder of a Security or Securities of the affected series for at least six months
may, on behalf of himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may
deem proper and prescribe, appoint a successor trustee.

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

     (i) the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust
Indenture Act, after written request therefor by the Company or by any Securityholder who
has been a bona fide holder of a Security or Securities for at least six months; or

     (ii) the Trustee shall cease to be eligible in accordance with the provisions of
Section 6.09 and shall fail to resign after written request therefor by the Company or by
any such Securityholder; or

     (iii) the Trustee shall become incapable of acting, or shall be adjudged as bankrupt or
insolvent, or a receiver or liquidator of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation;

then, in any such case, the Company may remove the Trustee and appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors of the Company, one
copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor
trustee, or, subject to Section 315(e) of the Trust Indenture Act, any Securityholder who has been
a bona fide holder of a Security or Securities for at least six months may on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

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          (c) The holders of a majority in aggregate Principal Amount of the Securities of any series at
the time outstanding may at any time remove the Trustee for that series and appoint a successor
trustee by delivering to the Trustee so removed, to the successor trustee so appointed and to the
Company the evidence provided for in Section 7.01 of the action in that regard taken by the
Securityholders.

          If no successor trustee shall have been so appointed and have accepted appointment 60 days
after the mailing of such notice of removal, the trustee being removed may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.

          (d) Any resignation or removal of the Trustee and any appointment of a successor trustee
pursuant to any of the provisions of this Section 6.10 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 6.11.

          (e) The Company shall give notice of each resignation and each removal of the Trustee with
respect to the Securities of any series and each appointment of a successor Trustee with respect to
the Securities of any series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

          SECTION 6.11 Acceptance of Appointment by Successor. (a) In case of the appointment
hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer
and deliver to such successor Trustee all property and money held by such retiring Trustee
hereunder.

     (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities
of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee
with respect to the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts hereunder by more than one

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Trustee, it being understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee
of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered
by any other such Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor Trustee relates; but,
on request of the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the appointment of such
successor Trustee relates.

     (c) Upon request of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may
be.

     (d) No successor Trustee shall accept its appointment unless at the time of such acceptance
such successor Trustee shall be qualified and eligible under the Trust Indenture Act.

          SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee.
Any corporation or national association into which the Trustee may be merged or converted or with
which it may be consolidated, or to which the Trustee’s assets may be sold, or any corporation or
national association resulting from any merger, conversion, consolidation or sale to which the
Trustee shall be a party or by which the Trustee’s property may be bound, or any corporation or
national association succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such entity shall be
eligible under the provisions of Section 6.09, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

          In case at the time such successor to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered, any such successor
to the Trustee may adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases
such certificate shall have the full force that it is anywhere in the Securities or in this
Indenture provided that the certificate of the Trustee shall have; provided, that the right to
adopt the certificate of authentication of any predecessor Trustee or to authenticate Securities in
the name of any predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.

          SECTION 6.13 Preferential Collection of Claims. If the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company (or any other
obligor on the Securities), the Trustee shall be subject to the provisions of Section 311 of the
Trust Indenture Act regarding the collection of claims against the Company (or any such

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other obligor). For purposes of Section 311(b) (4) and (6) of such Act, the following terms
shall mean:

          (a) “cash transaction” means any transaction in which full payment for goods or securities
sold is made within seven days after delivery of the goods or securities in currency or in checks
or other orders drawn upon banks or bankers and payable upon demand; and

          (b) “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation which
is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is
secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise
previously constituting the security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.

ARTICLE 7

CONCERNING THE HOLDERS

          SECTION 7.01 Evidence of Action Taken by Holders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to be given or taken
by Securityholders of any series may be embodied in and evidenced (a) by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by agent duly appointed in
writing, (b) by the record of the holders of Securities of such series voting in favor thereof at
any meeting of Securityholders duly called and held in accordance with the provisions of Article 8,
or (c) by a combination of such instrument or instruments and any such record of such a meeting of
Securityholders; and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee. Proof of execution of
any instrument or of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Sections 6.01 and 6.02) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Article.

          SECTION 7.02 Proof of Execution of Instruments and of Holding of Securities; Record
Date. Subject to Sections 6.01 and 6.02, the execution of any instrument by a Securityholder
or his agent or proxy may be proved in accordance with such reasonable rules and regulations as may
be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Securities shall be proved by the Security Register or by a certificate of the Registrar
thereof. The Company may set a record date for purposes of determining the identity of holders of
Securities entitled to vote or consent to any action referred to in Section 7.01, which record date
may be set at any time or from time to time by notice to the Trustee, for any date or dates (in the
case of any adjournment or resolicitation) not more than 90 days nor less than 20 days prior to the
proposed date of such vote or consent, and thereafter, notwithstanding any other provisions hereof,
only holders of Securities of record on such record date shall be entitled to so vote or give such
consent or to withdraw such vote or consent.

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          Section 7.03 Who May Be Deemed Owners of Securities. The Company, the Trustee,
any paying agent and any Security registrar may deem and treat the person in
whose name any Security of any series shall be registered upon the books of the
Company on the applicable record date as the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding any notation
of ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of, premium, if any, and interest on such
Security and for all other purposes; and neither the Company nor the Trustee nor
any paying agent nor any Security registrar shall be affected by any notice to
the contrary. All such payments so made to, or upon the order of, any Holders
shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability of moneys payable upon any such Security.

          Section 7.04 Securities Owned by Company Deemed Not Outstanding. In determining
whether the Holders of the requisite aggregate Principal Amount of Securities of
any series have concurred in any direction, consent or waiver under this
Indenture, Securities of such series which are owned by the Company or any other
obligor on the Securities of such series or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Securities of such series shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver only
Securities which a Responsible Officer of the Trustee actually knows are so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any other obligor on
the Securities. In case of a dispute as to such right, the advice of counsel
shall be full protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers’ Certificate listing and identifying
all Securities of any series, if any, known by the Company to be owned or held
by or for the account of any of the above-described persons; and, subject to
Sections 6.01 and 6.02, the Trustee shall be entitled to accept such Officers’
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Securities of such series not listed therein are outstanding for
the purpose of any such determination.

          Section 7.05 Record Date for Action by Securityholders. Whenever in this Indenture it is
provided that Holders of a specified percentage in aggregate principal amount of
the Securities of any series may take any action (including the making of any
demand or request, the giving of any direction, notice, consent or waiver or the
taking of any other action), other than any action taken at a meeting of
Securityholders of such series called pursuant to Article 8, the Company,
pursuant to a resolution of its Board of Directors, or the Holders of at least
ten percent in aggregate principal amount of the Securities of such series then
outstanding, may request the Trustee to fix a record date for determining
Securityholders entitled to notice of and to take any such action. In case the
Company or the Holders of Securities of such series in the amount above
specified shall desire to request Securityholders of such series to take any
action and shall request the Trustee to fix a record date with respect thereto
by written notice setting

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forth in
reasonable detail the Securityholder action to be requested, the Trustee shall promptly (but in any
event within five days of receipt of such request) fix a record date that shall be a business day
not less than 15 nor more than 20 days after the date on which the Trustee receives such request.
If the Trustee shall fail to fix a record date as hereinabove provided, then the Company or the
Holders of Securities of such series in the amount above specified may fix the same by mailing
written notice thereof (the record date so fixed to be a business day not less than 15 nor more
than 20 days after the date on which such written notice shall be given) to the Trustee. If a
record date is fixed according to this Section 7.05, only persons shown as Securityholders of such
series on the registration books for the Company at the close of business on the record date so
fixed shall be entitled to take the requested action and the taking of such action by the Holders
of Securities of such series on the record date of the required percentage of the aggregate
Principal Amount of the Securities shall be binding on all Securityholders of such series, provided
that the taking of the requested action by the Holders of Securities of such series on the record
date of the percentage in aggregate Principal Amount of the Securities in connection with such
action shall have been evidenced to the Trustee, as provided in Section 7.01, not later than 180
days after such record date.

          SECTION 7.06 Right of Revocation of Action Taken. At any time prior to (but not
after) the evidencing to the Trustee, as provided in Section 7.01, of the taking of any action by
the holders of the percentage in aggregate Principal Amount of the Securities of any series
specified in this Indenture in connection with such action, any holder of a Security the serial
number of which is shown by the evidence to be included among the serial numbers of the Securities
of the series the Holders of which have consented to such action may, by filing written notice at
the Corporate Trust Office and upon proof of holding as provided in this Article, revoke such
action so far as concerns such Security. Except as aforesaid any such action taken by the holder
of any Security shall be conclusive and binding upon such holder and upon all future holders and
owners of such Security and of any Securities issued in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon any such Security. Any
action taken by the holders of the percentage in aggregate Principal Amount of the Securities of
any series specified in this Indenture in connection with such action shall be conclusively binding
upon the Company, the Trustee and the holders of all the Securities of such series.

ARTICLE 8

SECURITYHOLDERS’ MEETINGS

          SECTION 8.01 Purposes for Which Meeting May Be Called. A meeting of Holders of
Securities of any series may be called at any time and from time to time pursuant to the provisions
of this Article 8 for any of the following purposes:

          (a) to give any notice to the Company or to the Trustee, or to give any directions to the
Trustee, or to consent to the waiving of any default or Event of Default with respect to the
Securities of such series hereunder and its consequences, or take any other action authorized to be
taken by Securityholders of such series pursuant to any of the provisions of Article 5;

          (b) to remove the Trustee and appoint a successor trustee with respect to the Securities of
such series pursuant to the provisions of Article 6;

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          (c) to consent to the execution of an indenture or indentures supplemental hereto pursuant to
the provisions of Section 9.02; or

          (d) to take any other action authorized to be taken by or on behalf of the holders of the
percentage in aggregate Principal Amount of the Securities of such series under any other
provisions of this Indenture or under applicable law.

          SECTION 8.02 Manner of Calling Meetings; Record Date. The Trustee may at any time
call a meeting of Securityholders of any series to take any action specified in Section 8.01, to be
held at such time and at such place in The City of New York, New York, or as the Trustee shall
determine. Notice of every meeting of Securityholders of any series setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at such meeting, shall
be mailed not less than thirty nor more than sixty days prior to the date fixed for the meeting to
such Securityholders at their registered addresses. For the purpose of determining Securityholders
entitled to notice of any meeting of Securityholders, the Trustee shall fix in advance a date as
the record date for such determination, such date to be a business day not more than ten days prior
to the date of the mailing of such notice as hereinabove provided. Only persons in whose name a
Security of such series is registered upon the books of the Company on a record date fixed by the
Trustee as aforesaid, or by the Company or the Securityholders as in Section 8.03 provided, shall
be entitled to notice of the meeting of Securityholders with respect to which such record date was
so fixed.

          SECTION 8.03 Call of Meeting by Company or Securityholders. In case at any time the
Company, pursuant to a resolution of its Board of Directors, or the Holders of at least ten percent
in aggregate principal amount of the Securities of any series then outstanding, shall have
requested the Trustee to call a meeting of the Securityholders of such series to take any action
authorized in Section 8.01 by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed notice of such meeting
within twenty days after receipt of such request, then the Company or the Holders of Securities of
such series in the amount above specified may fix the record date with respect to, and determine
the time and the place for, such meeting and may call such meeting to take any action authorized in
Section 8.01, by mailing notice thereof as provided in Section 8.02. The record date fixed as
provided in the preceding sentence shall be set forth in a written notice to the Trustee and shall
be a business day not less than 15 nor more than 20 days after the date on which such notice is
sent to the Trustee.

          SECTION 8.04 Who May Attend and Vote at Meeting. To be entitled to vote at any
meeting of Securityholders of any series, a person shall be a holder of one or more Securities of
such series. The only persons who shall be entitled to be present or to speak at any meeting of
Securityholders of any series shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any representatives of the
Company and its counsel. When a determination of Securityholders entitled to vote at any meeting
of Securityholders has been made as provided in this Section 8.04, such determination shall apply
to any adjournment thereof.

          SECTION 8.05 Regulations. Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any meeting of
Securityholders of any series, in regard to proof of the holding of the Securities of

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such series
and of the appointment of proxies, and in regard to the appointment and duties of inspectors of
votes, the submission and examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it shall think fit. Except
as otherwise permitted or required by any such regulations, the holding of the Securities of such
series shall be provided in the manner specified in Section 8.06.

          The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting,
unless the meeting shall have been called by the Company or by Securityholders as provided in
Section 8.03, in which case the Company or the Securityholders calling the meeting, as the case may
be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by a vote of the holders of a majority in Principal
Amount of the Securities represented at the meeting and entitled to vote.

          Subject to the provisions of Section 7.04, at any meeting each Securityholder or proxy
entitled to vote thereat shall be entitled to one vote for each $1,000 principal amount of
Securities of such series held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Security challenged as not outstanding and ruled by the
chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to
vote other than by virtue of Securities held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Securityholders. Any meeting of
Securityholders duly called pursuant to the provisions of Section 8.02 or 8.03 may be adjourned
from time to time, and the meeting may be held as so adjourned without further notice.

          At any meeting of Securityholders of any series, the presence of persons who held, or who are
acting as proxy for persons who held, an aggregate Principal Amount of Securities of such series on
the record date for such meeting sufficient to take action on the business for the transaction of
which such meeting was called shall constitute a quorum, but, if less than a quorum is present, the
persons holding or representing a majority in aggregate Principal Amount of the Securities of such
series represented at the meeting may adjourn such meeting with the same effect, for all intents
and purposes, as though a quorum had been present.

          SECTION 8.06 Manner of Voting at Meetings and Record to be Kept. The vote upon any
resolution submitted to any meeting of Securityholders of any series shall be by written ballots on
each of which shall be subscribed the signature of the Securityholder or proxy casting such ballot
and the identifying number or numbers of the Securities of such series held or represented in
respect of which such ballot is cast. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of
the notice of the meeting and showing that said notice was mailed as provided in Section 8.02. The
record shall show the identifying numbers of the Securities of such series voting in favor of or
against any resolution. Each counterpart of such record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the counterparts shall
be delivered to the Company and the other to the Trustee to be preserved by the Trustee.

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          Any counterpart record so signed and verified shall be conclusive evidence of the matters
therein stated and shall be the record referred to in clause (b) of Section 8.01.

          SECTION 8.07 Exercise of Rights of Trustee and Securityholders Not to be Hindered or
Delayed. Nothing in this Article 8 contained shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of Securityholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of any right or
rights conferred upon or reserved to the Trustee or to the Securityholders of any series under any
of the provisions of this Indenture or of the Securities of such series.

ARTICLE 9

SUPPLEMENTAL INDENTURES

          SECTION 9.01 Supplemental Indentures Without Consent of Holders. The Company and the
Trustee may amend or supplement this Indenture or the Securities of any series without the consent
of any Holder:

          (a) to cure any ambiguity, defect or inconsistency;

          (b) to provide for uncertificated Securities in addition to or in place of certificated
Securities;

          (c) to provide for the assumption of the Company’s obligations to the Holders of the
Securities in the case of any transaction pursuant to Article 10 hereof;

          (d) to evidence and provide for the acceptance of appointment hereunder by a successor trustee
and to add to or change any of the provisions of the Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more than one trustee;

          (e) to make any change that would provide any additional rights or benefits to the Holders of
all or any series of Securities or that does not adversely affect the legal rights hereunder of any
such Holder; or

          (f) to comply with requirements of the Commission in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act.

          Upon the request of the Company accompanied by a resolution of their respective Board of
Directors authorizing the execution of any such supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 9.04 hereof, the Trustee shall join with the Company
in the execution of any supplemental indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations which may be therein
contained, but the Trustee shall not be obligated to enter into such supplemental indenture which
affects its own rights, duties or immunities under this Indenture or otherwise.

          SECTION 9.02 With Consent of Holders. Except as provided in the next succeeding
paragraphs, this Indenture or the Securities may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate Principal Amount of the Securities

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then outstanding
affected by such supplemental indenture, and any existing default or compliance with any provision
of this Indenture or the Securities of any series may be waived with the consent of the Holders of
a majority in aggregate Principal Amount of the then outstanding Securities affected by such
default or compliance.

          Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee
of evidence satisfactory to the Trustee of the consent of the Holders as aforesaid, and upon
receipt by the Trustee of the documents described in Section 9.04 hereof, the Trustee shall join
with the Company in the execution of such supplemental indenture unless such supplemental indenture
affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental
indenture.

          It shall not be necessary for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.

          After an amendment, supplement or waiver under this Section becomes effective, the Company
shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such supplemental indenture or waiver. Subject to
Sections 5.04 and 5.07 hereof, the Holders of a majority in aggregate Principal Amount of the
Securities then outstanding affected may waive compliance in a particular instance by the Company
with any provision of this Indenture or such Securities. Without the consent of each Holder
affected hereby, however, an amendment or waiver may not:

          (a) reduce the Principal Amount of Securities of any series whose Holders must consent to an
amendment, supplement or waiver;

          (b) change the stated maturity of the principal of, or any installment of principal of or
interest on, or time for payment of interest on, any Security, or reduce the Principal Amount
thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or
change any Payment Office where, or the coin or currency in which, any Security or any premium or
interest thereon is payable, or impair the right to institute suit for the enforcement of any such
payment on or after the stated maturity thereof (or, in the case of redemption, on or after the
redemption date);

          (c) modify any of the provisions of this Section 9.02, Section 5.04 or Section 4.06, except to
increase the percentage in Principal Amount of Holders required under any such Section or to
provide that certain other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each outstanding Security affected thereby, provided, however, that this
clause (c) will not be deemed to require the consent of any Holder with respect to changes in the
references to “the Trustee” and concomitant changes in this Section 9.02, Section 5.04 and Section
4.06, or the deletion of this proviso, in accordance with the requirements of Section 6.11; or

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          (d) make any change in this sentence of this Section 9.02.

          SECTION 9.03 Effect of Supplemental Indenture. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified
and amended in accordance therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Company and the Holders shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture for any and all
purposes.

          SECTION 9.04 Documents to Be Given to Trustee; Compliance with TIA. The Trustee,
subject to the provisions of Sections 6.01 and 6.02, may receive an Officers’ Certificate and an
Opinion of Counsel as conclusive evidence that any such supplemental indenture complies with the
applicable provisions of this Indenture. Every such supplemental indenture shall comply with the
TIA.

          SECTION 9.05 Notation on Securities in Respect of Supplemental Indentures. Securities
authenticated and delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article may bear a notation approved by the Trustee as to form (but not as to
substance) as to any matter provided for by such supplemental indenture or as to any action taken
at any such meeting. If the Company or the Trustee shall so determine, new Securities of any
series so modified as to conform, in the opinion of the Trustee and the Board of Directors of the
Company, to any modification of this Indenture contained in any such supplemental indenture may be
prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities
of such series then outstanding.

ARTICLE 10

CONSOLIDATION, MERGER OR SALE OF ASSETS

          SECTION 10.01 When the Company May Merge, Etc. The Company shall not consolidate with
or merge into any other Person or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:

          (a) the Person formed by such consolidation or into which the Company is merged or the Person
which acquires by conveyance or transfer the properties and assets of the Company substantially as
an entirety shall be a Person organized and existing under the laws of the United States of America
or any State or the District of Columbia, and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, the due and punctual payment of the principal of
(and premium, if any) and interest, if any, on all the Securities and the performance or observance
of every covenant of this Indenture of the part of the Company to be performed or observed;

          (b) immediately after giving effect to such transaction, no Event of Default, and no event
which, after notice or lapse of time, or both, would become an Event of Default, shall have
happened and be continuing; and

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          (c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel each stating that such consolidation, merger, conveyance or transfer and, if a supplemental
indenture is required in connection with such transaction, such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating to such transaction
have been complied with.

          SECTION 10.02 Successor Corporation Substituted. Upon any consolidation or merger, or
any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all
of the assets of the Company in accordance with Section 10.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the
“Company” shall refer instead to the successor corporation), and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor Person had been
named as the Company herein.

          In case of any such consolidation, merger, sale or conveyance such changes in phraseology and
form (but not in substance) may be made in the Securities thereafter to be issued as may be
appropriate. Notwithstanding the foregoing, (i) a consolidation or merger by the Company with or
into, or (ii) the sale, assignment, transfer, lease, conveyance or other disposition by the Company
of all or substantially all of its property or assets to, one or more of its Subsidiaries shall not
relieve the Company from its obligations under this Indenture and the Securities.

          SECTION 10.03 Opinion of Counsel to Trustee. The Trustee, subject to the provisions
of Sections 6.01 and 6.02, may receive an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, conveyance, sale, transfer, lease, exchange or other disposition complies
with the applicable provisions of this Indenture.

ARTICLE 11

REDEMPTION OF SECURITIES

          SECTION 11.01 Applicability of Article. Securities of any series which are redeemable
before their Stated Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.01 for Securities of any series) in accordance
with this Article.

          SECTION 11.02 Notice of Redemption; Partial Redemptions. Notice of redemption to the
holders of Securities of any series to be redeemed as a whole or in part shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30 days and not more than
60 days prior to the date fixed for redemption to such holders of Securities at their last
addresses as they shall appear upon the registry books. Any notice which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the notice to the holder of
any Security designated for redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.

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          The notice of redemption to each such Holder shall identify the Securities to be redeemed
(including CUSIP numbers) and shall specify the Principal Amount of each Security held by such
Holder to be redeemed, the date fixed for redemption, the redemption price, the place or places of
payment, that payment will be made upon presentation and surrender of such Securities, that
interest accrued to the date fixed for redemption will be paid as specified in said notice and that
on and after said date interest thereon or on the portions thereof to be redeemed will cease to
accrue. In case any Security is to be redeemed in part only the notice of redemption shall state
the portion of the Principal Amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or Securities in
Principal Amount equal to the unredeemed portion thereof will be issued.

          The notice of redemption of Securities of any series to be redeemed at the option of the
Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and
at the expense of the Company.

          No later than 10:00 a.m. on the redemption date specified in the notice of redemption given as
provided in this Section, the Company will deposit with the Trustee or with one or more paying
agents (or, if the Company is acting as its own paying agent, set aside, segregate and hold in
trust) an amount of money sufficient to redeem on the redemption date all the Securities of a
series so called for redemption at the appropriate redemption price, together with accrued interest
to the date fixed for redemption. The Company will deliver to the Trustee at least 70 days prior
to the date fixed for redemption an Officers’ Certificate stating the aggregate Principal Amount of
Securities of such series to be redeemed.

          If less than all the Securities of a series are to be redeemed, the Trustee shall select,
either pro rata, by lot or by any other method it shall deem fair and reasonable, Securities to be
redeemed in whole or in part. Securities may be redeemed in part only in denominations equal to
the minimum authorized denomination for Securities of that series or any integral multiple thereof.
The Trustee shall promptly notify the Company in writing of the Securities selected for redemption
and, in the case of any Securities selected for partial redemption, the Principal Amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of any Security
redeemed or to be redeemed only in part, to the portion of the Principal Amount of such Security
which has been or is to be redeemed.

          SECTION 11.03 Payment of Securities Called for Redemption. If notice of redemption
has been given as above provided, the Securities or portions of Securities specified in such notice
shall become due and payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for redemption, and on and after
said date (unless the Company shall default in the payment of such Securities at the redemption
price, together with interest accrued to said date) interest on the Securities or portions of
Securities so called for redemption shall cease to accrue and, except as provided in Sections 6.05
and 13.06, such Securities shall cease from and after the date fixed for redemption to be entitled
to any benefit or security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price thereof and unpaid
interest to the date fixed for redemption. On presentation and surrender of such Securities at a
Payment Office specified in said notice, said Securities or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together

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with interest accrued
thereon to the date fixed for redemption; provided that any payment of interest becoming due on the
date fixed for redemption shall be payable to the holders of such Securities registered as such on
the relevant Regular Record Date subject to the terms and provisions of Section 3.05 hereof.

          If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed
for redemption at the rate borne by the Security.

          Upon presentation of any Security redeemed in part only, the Company shall execute and the
Trustee shall authenticate and make available for delivery to or on the order of the Holder
thereof, at the expense of the Company, a new Security or Securities of authorized denominations,
in Principal Amount equal to the unredeemed portion of the Security so presented.

ARTICLE 12

DEFEASANCE AND COVENANT DEFEASANCE

          SECTION 12.01 Applicability of the Article; Company’s Option to Effect Defeasance or
Covenant Defeasance. Unless pursuant to Section 3.01 provision is made for the inapplicability
of either or both of (a) defeasance of the Securities of a series under Section 12.02 or (b)
covenant defeasance of the Securities of a series under Section 12.03, then the provisions of such
Section or Sections, as the case may be, together with the other provisions of this Article, shall
be applicable to the Securities of such series, and the Company may, at its option, by resolution
of the Board of Directors, at any time, elect to have either Section 12.02 or Section 12.03 applied
to the outstanding Securities of a series upon compliance with the conditions set forth below in
this Article 12.

          SECTION 12.02 Legal Defeasance and Discharge. Upon the Company’s exercise of the
option provided under Section 12.01 hereof to defease the outstanding Securities of a particular
series under this Section 12.02, the Company shall be deemed to have been discharged from its
obligations with respect to such outstanding Securities on the date the conditions set forth below
are satisfied (hereinafter, “Legal Defeasance”). For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire indebtedness represented by
the outstanding Securities of such series, which shall thereafter be deemed to be “outstanding”
only for the purposes of Section 12.05 hereof and the other Sections of this Indenture referred to
in clauses (i) and (ii) of this Section 12.02, and to have satisfied all its other obligations
under such Securities and this Indenture (and the Trustee, on demand of and at the expense of the
Company shall execute proper instruments acknowledging the same), except for the following
provisions which shall survive until otherwise terminated or discharged hereunder: (i) the rights
of Holders of outstanding Securities of such series to receive solely from the trust fund described
in Section 12.04 hereof, and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on such Securities when such payments are due, (ii) the
Company’s obligations with respect to such Securities under Sections 3.06, 3.07, 3.08(a), 3.09,
3.11, and 12.05 hereof, (iii) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, including, without limitation, the Trustee’s rights under Section 5.07 hereof, and the
Company’s obligations in

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connection therewith and with this Article 12. Subject to compliance with
this Article 12, the Company may exercise its option under this Section 12.02 notwithstanding the
prior exercise of its option under Section 12.03 hereof with respect to the Securities of such
series.

          SECTION 12.03 Covenant Defeasance. Upon the Company’s exercise of the option provided
under Section 12.01 hereof to obtain a covenant defeasance with respect to the outstanding
Securities of a particular series under this Section 12.03, the Company shall be released from its
obligations under the covenants contained in Article 4 and Section 10.01 hereof and the covenants
contained in any supplemental indenture applicable to such series, with respect to the outstanding
Securities of such series on and after the date the conditions set forth below are satisfied
(hereinafter, “Covenant Defeasance”), and the Securities of such series shall thereafter be deemed
not outstanding for the purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but shall continue to be
deemed outstanding for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities of such series, the Company may omit to
comply with and shall have no liability in respect of any term, condition or limitation set forth
in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein
to any such covenant or by reason of any reference in any such covenant to any other provision
herein or in any other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 5.01(c) with respect to outstanding Securities of such series, but,
except as specified above, the remainder of this Indenture and of the Securities of such series
shall be unaffected thereby.

          SECTION 12.04 Conditions to Legal or Covenant Defeasance. The following shall be the
conditions to the application of either Section 12.02 or Section 12.03 hereof to the outstanding
Securities of a particular series:

          (a) The Company shall irrevocably have deposited or caused to be deposited with the Trustee
(or another trustee satisfying the requirements of Section 6.10 who shall agree to comply with the
provisions of this Article 12 applicable to it) as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated solely to, the benefit
of the Holders of such Securities, (i) an amount (in such currency, currencies or currency unit in
which such Securities and any related coupons are then specified as payable at Stated Maturity), or
(ii) non-callable Government Securities that through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, cash in U.S. Dollars in an amount, or (iii) a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge the principal of, premium, if any, and interest on such outstanding
Securities on the stated maturity date of such principal or installment of principal, premium, if
any, or interest.

          (b) In the case of an election under Section 12.02 hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel confirming that (i) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (ii) since the date hereof, there has
been a change in the applicable Federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of the

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outstanding Securities
of such series will not recognize income, gain or loss for Federal income tax purposes as a result
of such Legal Defeasance and will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal Defeasance had not occurred.

          (c) In the case of an election under Section 12.03 hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel confirming that the Holders of the outstanding Securities of such
series will not recognize income, gain or loss for Federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant Defeasance had not
occurred.

          (d) No Default or Event of Default (or event that, with the giving of notice or lapse of time
or both would become an Event of Default) with respect to the Securities of such series shall have
occurred and be continuing on the date of such deposit or, insofar as Section 5.01(d) or 5.01(e)
hereof is concerned, at any time in the period ending on the 124th day after the date of such
deposit (it being understood that this condition shall not be deemed satisfied until the expiration
of such period).

          (e) Such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of,
or constitute a default under any material agreement or instrument (other than this Indenture) to
which the Company is a party or by which the Company or is bound (other than a breach, violation or
default resulting from the borrowing of funds to be applied to such deposit).

          (f) The Company shall have delivered to the Trustee an Officers’ Certificate stating that the
deposit made by the Company pursuant to its election under Section 12.02 or 12.03 hereof was not
made by the Company with the intent of preferring the Holders of the affected Securities over the
other creditors of the Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company, or others.

          (g) Such defeasance or covenant defeasance shall be effected in compliance with any additional
terms, conditions or limitations which may be imposed on the Company in connection therewith
pursuant to Section 3.01.

          (h) The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for relating to either the Legal
Defeasance under Section 12.02 hereof or the Covenant Defeasance under Section 12.03 hereof (as the
case may be) have been complied with as contemplated by this Section 12.04.

          SECTION 12.05 Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions. Subject to Section 12.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the Trustee pursuant to
Section 12.04 hereof in respect of the outstanding Securities of a particular series shall be held
in trust and applied by the Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any paying agent (including the Company
acting as paying agent) as the Trustee may determine, to the Holders of such Securities of all sums
due and to become due thereon in respect of principal of, premium, if

43

 

any, and interest, but such
money need not be segregated from other funds except to the extent required by law.

          The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the cash or non-callable Government Securities deposited pursuant to Section
12.04 hereof or the principal and interest received in respect thereof other than any such tax, fee
or other charge that by law is for the account of the Holders of the outstanding Securities of such
series.

          Anything in this Article 12 to the contrary notwithstanding, the Trustee shall deliver or pay
to the Company from time to time upon the Company’s request any money or non-callable Government
Securities held by it as provided in Section 12.04 hereof with respect to the Securities of any
series which, in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 12.04(a) hereof), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

          SECTION 12.06 Repayment to the Company. Any money deposited with the Trustee or any
paying agent, or then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Security and remaining unclaimed for two years after such principal,
premium, if any, or interest has become due and payable shall be paid to the Company on its written
request or (if then held by the Company) shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such paying agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such paying agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in The New York Times and The Wall
Street Journal (national edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid to the Company.

          SECTION 12.07 Reinstatement. If the Trustee or paying agent is unable to apply any
U.S. Dollars or non-callable Government Securities in accordance with Section 12.02 or 12.03
hereof, as the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then the Company’s
obligations under this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 12.02 or 12.03 hereof until such time as the Trustee or
paying agent is permitted to apply all such money in accordance with Section 12.02 or 12.03 hereof,
as the case may be; provided, however, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Security to receive such payment
from the money held by the Trustee or paying agent.

44

 

ARTICLE 13

SATISFACTION AND DISCHARGE

          SECTION 13.01 Satisfaction and Discharge of Indenture. This Indenture shall upon a
Company Request cease to be of further effect with respect to any series of Securities (except, as
to any surviving rights of registration of transfer, exchange or conversion of Securities of such
series herein expressly provided for or in the form of Security for such series and any rights to
receive payment of interest thereon), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when:

          (a) either

     (i) all Securities of such series theretofore authenticated and delivered (other than
(A) Securities which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 3.09, and (B) Securities for whose payment money has theretofore
been (x) deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in Section 4.03(c) or (y)
paid to any State or the District of Columbia pursuant to its unclaimed property or similar
laws) have been delivered to the Trustee for cancellation; or

     (ii) all such Securities not theretofore delivered to the Trustee for cancellation

     (A) have become due and payable, or

     (B) will become due and payable at their stated maturity within one year, or

     (C) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the Trustee in
the name, and at the expense, of the Company, and the Company, in the case of (A),
(B) or (C) above, has deposited or caused to be deposited with the Trustee, as trust
funds in trust for the purpose, money in the amount in the currency or currency
units in which the Securities of such series are payable, sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and interest, if
any, to the date of such deposit (in the case of Securities which have become due
and payable), or to the Stated Maturity or redemption date, as the case may be;

          (b) the Company has paid or caused to be paid all other sums payable hereunder with respect to
such Securities; and

          (c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel each stating that all conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.

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          Notwithstanding the satisfaction and discharge of this Indenture the obligations of the
Company to the Trustee under Section 6.07 and, if money shall have been deposited with the Trustee
pursuant to subclause (ii) of Clause (a) of this Section, the obligations of the Trustee under
Section 13.02 and the last paragraph of Section 4.03 shall survive.

          SECTION 13.02 Application of Trust Money. Subject to the provisions of the last
paragraph of Section 4.03, all money deposited with the Trustee pursuant to Section 13.01 shall be
held in trust and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest, if any, for whose payment such money has been
deposited with the Trustee.

ARTICLE 14

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

          SECTION 14.01 Company to Furnish Trustee Names and Addresses of Holders. The Company
will furnish or cause to be furnished to the Trustee:

          (a) semi-annually, not later than 15 days after the Regular Record Date for each series of
Securities, a list, in such form as the Trustee may reasonably require, of the names and addresses
of the Holders of Securities as of such Regular Record Date (unless the Trustee has such
information), or if there is no Regular Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board Resolution or indenture supplemental
hereto authorizing such series, and

          (b) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Company of any such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;

          provided, however, that so long as the Trustee is the Registrar, no such list shall be
required to be furnished.

          SECTION 14.02 Preservation of Information; Communications to Holders.

          (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names
and addresses of Holders contained in the most recent list furnished to the Trustee as provided in
Section 14.01 and the names and addresses of Holders received by the Trustee in its capacity as the
Registrar. The Trustee may destroy any list furnished to it as provided in Section 14.01 upon
receipt of a new list so furnished.

          (b) If three or more Holders (herein referred to as “applicants”) apply in writing to the
Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other Holders with respect to their rights
under this Indenture or under the Securities and is accompanied by a copy of the form of

46

 

proxy or
other communication which such applicants propose to transmit, then the Trustee shall, within five
Business Days after the receipt of such application, at its election, either

     (i) afford such applicants access to the information preserved at the time by the
Trustee in accordance with Section 14.02(a); or

     (ii) inform such applicants as to the approximate number of Holders whose names and
addresses appear in the information preserved at the time by the Trustee in accordance with
Section 14.02(a), and as to the approximate cost of mailing to such Holders the form of
proxy or other communication, if any, specified in such application.

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

          (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and
the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of any such information as to the names and addresses of
the Holders in accordance with Section 14.02(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 14.02(b).

          SECTION 14.03 Reports by the Trustee.

          (a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within sixty days after each May 15th following the date of this Indenture
(commencing May 15, 2006) deliver to Holders a brief report, dated as of such May 15th, which
complies with the provisions of such Section 313(a).

          (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by
the Trustee with each securities exchange upon which Securities of any series are

47

 

listed, with the
Commission and with the Company. The Company will promptly notify the Trustee when any Securities
are listed on any securities exchange and of any delisting thereof.

          SECTION 14.04 Reports by the Company. The Company will file with the Trustee and the
Commission and transmit to Holders, such information, documents and other reports as may be
required pursuant to the Trust Indenture Act. Delivery of such information, documents and reports
to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not
constitute constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates). At
any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, upon request
of Holders and prospective purchasers of Securities thereof, the Company shall file with the
Trustee and the Commission, in accordance with rules and regulations prescribed from time to time
by the Commission, such of the supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a
security listed and registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations.

ARTICLE 15

MISCELLANEOUS PROVISIONS

          SECTION 15.01 Incorporators, Stockholders, Officers and Directors of Company Exempt from
Individual Liability. No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, or in any Security of any series, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, as such or against any past, present or
future stockholder, officer or director, as such, of the Company or of any successor, either
directly or through the Company or any successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the acceptance of the
Securities of such series by the holders thereof and as part of the consideration for the issue of
the Securities of such series.

          SECTION 15.02 Provisions of Indenture for the Sole Benefit of Parties and Holders.
Except as set forth in Section 15.09, nothing in this Indenture or in the Securities of any series,
expressed or implied, shall give or be construed to give to any person, firm or corporation, other
than the parties hereto and their successors and the holders of the Securities of such series, any
legal or equitable right, remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit of the parties
hereto and their successors and of the holders of the Securities.

          SECTION 15.03 Successors and Assigns of Company Bound by Indenture. All the
covenants, stipulations, promises and agreements in this Indenture contained by or in behalf of the
Company shall bind their successors and assigns, whether so expressed or not.

          SECTION 15.04 Notices to Holders. Where this Indenture provides for notice to
Holders, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each Holder entitled thereto, at his last
address

48

 

as it appears in the Security Register. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where
this Indenture provides for notice in any manner, such notice may be waived in writing by the
person entitled to receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. The Trustee may waive notice to it of any provision herein, and
such waiver shall be deemed to be for its convenience and discretion. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.

          In case, by reason of the suspension of or irregularities in regular mail service, it shall be
impracticable to mail notice to the Company and Securityholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving such notice as shall
be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.

          SECTION 15.05 Officers’ Certificates and Opinions of Counsel; Statements to Be Contained
Therein. Upon any application or demand by the Company to the Trustee to take any action under
any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers’
Certificate stating that all conditions precedent provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such documents is specifically required by
any provision of this Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.

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

          Any certificate, statement or opinion of an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of or representations by counsel, unless
such officer knows that the certificate or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous. Any certificate, statement or
Opinion of Counsel may be based, insofar as it relates to factual matters or information which is
in the possession of the Company, upon the certificate, statement or opinion of or representations
by an officer or officers of the Company unless such counsel knows that the certificate, statement
or opinion or representations with respect to the matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.

49

 

          Any certificate, statement or opinion of an officer of the Company or of counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of or representations by
an accountant or firm of accountants in the employ of the Company unless such officer or counsel
knows that the certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.

          Any certificate or opinion of any independent firm of public accountants filed with the
Trustee shall contain a statement that such firm is independent within the meaning of the
Securities Act and the rules and regulations promulgated thereunder.

          SECTION 15.06 Payments Due on Saturdays, Sundays and Holidays. If the date of
maturity of interest on or principal of the Securities of a particular series or the date fixed for
redemption of any Security shall not be a Business Day, then payment of interest or principal with
respect to such Securities need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date of maturity or the date fixed
for redemption, and no interest shall accrue for the period after such date.

          SECTION 15.07 Conflict of Any Provision of Indenture with Trust Indenture Act. If and
to the extent that any provision of this Indenture limits, qualifies or conflicts with another
provision included in this Indenture by operation of Sections 310 to 317, inclusive, of the Trust
Indenture Act (an “incorporated provision”), such incorporated provision shall control.

          SECTION 15.08 New York Law to Govern. This Indenture and the Securities of any series
shall each be deemed to be a contract under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of said State.

          SECTION 15.09 Third Party Beneficiaries. Holders of Securities of the Company are
third party beneficiaries of this Indenture, and any of them (or their representative) shall have
the right to enforce the provisions of this Indenture that benefit such holders.

          SECTION 15.10 Counterparts. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall together constitute
but one and the same instrument.

          SECTION 15.11 Effect of Headings. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction hereof.

          SECTION 15.12 Severability. If any provision hereof shall be held to be invalid,
illegal or unenforceable under applicable law, then the remaining provisions hereof shall be
construed as though such invalid, illegal or unenforceable provision were not contained herein.

50

 

SIGNATURES

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as
of May 4, 2005.

	 	 	 	 	 
	 	 	THE HOME DEPOT, INC., as Company
	 
	 	 	 	 
	

	 	By:	 	/s/ Carol B. Tome
	

	 	 	 	 
	

	 	 	 	Carol B. Tome
	

	 	 	 	Executive Vice President—Chief
	

	 	 	 	Financial Officer
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee
	 
	 	 	 	 
	

	 	By:	 	/s/ Stefan Victory
	

	 	 	 	 
	

	 	 	 	Name: Stefan Victory
	

	 	 	 	Title: Vice President

51

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