Document:

<PAGE>

                                                                     Exhibit 4.1

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                    Depositor

                          WILSHIRE CREDIT CORPORATION,
                                    Servicer

                                       and

                         U.S. BANK NATIONAL ASSOCIATION,
                                     Trustee

                                   ----------

                         POOLING AND SERVICING AGREEMENT
                           Dated as of January 1, 2007

                                   ----------

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-BC1

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
ARTICLE I DEFINITIONS....................................................     10

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..     60
   SECTION 2.01.  Conveyance of Mortgage Loans...........................     60
   SECTION 2.02.  Acceptance by Trustee of the Mortgage Loans............     63
   SECTION 2.03.  Representations, Warranties and Covenants of the
                     Depositor...........................................     64
   SECTION 2.04.  Representations and Warranties of the Servicer.........     67
   SECTION 2.05.  Substitutions and Repurchases of Mortgage Loans Which
                     Are Not "Qualified Mortgages".......................     68
   SECTION 2.06.  Authentication and Delivery of Certificates............     69
   SECTION 2.07.  REMIC Elections........................................     69
   SECTION 2.08.  Covenants of the Servicer..............................     74
   SECTION 2.09.  [RESERVED].............................................     74
   SECTION 2.10.  [RESERVED].............................................     74
   SECTION 2.11.  Permitted Activities of the Issuing Entity.............     74
   SECTION 2.12.  Qualification of Special Purpose Entity................     74
   SECTION 2.13.  Depositor Notification of NIM Notes....................     74

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...............     74
   SECTION 3.01.  Servicer to Service Mortgage Loans.....................     74
   SECTION 3.02.  Servicing and Subservicing; Enforcement of the
                     Obligations of Servicer.............................     76
   SECTION 3.03.  Rights of the Depositor and the Trustee in Respect of
                     the Servicer........................................     77
   SECTION 3.04.  Trustee to Act as Servicer.............................     77
   SECTION 3.05.  Collection of Mortgage Loan Payments; Collection
                     Account; Certificate Account........................     78
   SECTION 3.06.  Collection of Taxes, Assessments and Similar Items;
                     Escrow Accounts.....................................     81
   SECTION 3.07.  Access to Certain Documentation and Information
                     Regarding the Mortgage Loans........................     81
   SECTION 3.08.  Permitted Withdrawals from the Collection Account and
                     Certificate Account.................................     82
   SECTION 3.09.  [RESERVED].............................................     84
   SECTION 3.10.  Maintenance of Hazard Insurance........................     84
   SECTION 3.11.  Enforcement of Due-On-Sale Clauses; Assumption
                     Agreements..........................................     85
</TABLE>

                                        i

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
   SECTION 3.12.  Realization Upon Defaulted Mortgage Loans;
                     Determination of Excess Proceeds....................     86
   SECTION 3.13.  Trustee to Cooperate; Release of Mortgage Files........     90
   SECTION 3.14.  Documents Records and Funds in Possession of Servicer
                     to be Held for the Trustee..........................     91
   SECTION 3.15.  Servicing Compensation.................................     91
   SECTION 3.16.  Access to Certain Documentation........................     92
   SECTION 3.17.  Annual Statement as to Compliance......................     92
   SECTION 3.18.  Assessment of Compliance; Accountant's Attestation.....     92
   SECTION 3.19.  Subordination Liens....................................     95
   SECTION 3.20.  Periodic Filings.......................................     95
   SECTION 3.21.  Indemnification by Trustee.............................     99
   SECTION 3.22.  Indemnification by Servicer............................     99
   SECTION 3.23.  Prepayment Charge Reporting Requirements...............    100
   SECTION 3.24.  Statements to Trustee..................................    100
   SECTION 3.25.  Further Indemnification by the Servicer................    100
   SECTION 3.26.  Solicitation...........................................    101
   SECTION 3.27.  Existing Servicing Agreement...........................    101
   SECTION 3.28.  High Cost Mortgage Loans...............................    101
   SECTION 3.29.  [RESERVED].............................................    101

ARTICLE IV DISTRIBUTIONS.................................................    101
   SECTION 4.01.  Advances...............................................    101
   SECTION 4.02.  Reduction of Servicing Compensation in Connection with
                     Prepayment Interest Shortfalls......................    102
   SECTION 4.03.  Distributions on the REMIC Interests...................    102
   SECTION 4.04.  Distributions..........................................    103
   SECTION 4.05.  Monthly Statements to Certificateholders...............    111

ARTICLE V THE CERTIFICATES...............................................    115
   SECTION 5.01.  The Certificates.......................................    115
   SECTION 5.02.  Certificate Register; Registration of Transfer and
                     Exchange of Certificates............................    116
   SECTION 5.03.  Mutilated, Destroyed, Lost or Stolen Certificates......    120
   SECTION 5.04.  Persons Deemed Owners..................................    120
</TABLE>

                                       ii

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
   SECTION 5.05.  Access to List of Certificateholders' Names and
                     Addresses...........................................    121
   SECTION 5.06.  Book-Entry Certificates................................    121
   SECTION 5.07.  Notices to Depository..................................    122
   SECTION 5.08.  Definitive Certificates................................    122
   SECTION 5.09.  Maintenance of Office or Agency........................    122

ARTICLE VI THE DEPOSITOR AND THE SERVICER................................    123
   SECTION 6.01.  Respective Liabilities of the Depositor and the
                     Servicer............................................    123
   SECTION 6.02.  Merger or Consolidation of the Depositor or the
                     Servicer............................................    123
   SECTION 6.03.  Limitation on Liability of the Depositor, the Servicer
                     and Others..........................................    123
   SECTION 6.04.  Limitation on Resignation of Servicer..................    124
   SECTION 6.05.  Errors and Omissions Insurance; Fidelity Bonds.........    124

ARTICLE VII DEFAULT; TERMINATION OF SERVICER.............................    124
   SECTION 7.01.  Events of Default......................................    124
   SECTION 7.02.  [RESERVED].............................................    126
   SECTION 7.03.  Trustee to Act; Appointment of Successor...............    126
   SECTION 7.04.  Notification to Certificateholders.....................    127

ARTICLE VIII CONCERNING THE TRUSTEE......................................    127
   SECTION 8.01.  Duties of Trustee......................................    127
   SECTION 8.02.  Certain Matters Affecting the Trustee..................    128
   SECTION 8.03.  Trustee Not Liable for Mortgage Loans..................    130
   SECTION 8.04.  Trustee May Own Certificates...........................    130
   SECTION 8.05.  Trustee's Fees.........................................    130
   SECTION 8.06.  Indemnification of Trustee; Expenses...................    130
   SECTION 8.07.  Eligibility Requirements for Trustee...................    131
   SECTION 8.08.  Resignation and Removal of Trustee.....................    132
   SECTION 8.09.  Successor Trustee......................................    132
   SECTION 8.10.  Merger or Consolidation of Trustee.....................    133
   SECTION 8.11.  Appointment of Co-Trustee or Separate Trustee..........    133
   SECTION 8.12.  Tax Matters............................................    134

ARTICLE IX TERMINATION...................................................    136
   SECTION 9.01.  Termination upon Liquidation or Repurchase of all
                     Mortgage Loans......................................    136
   SECTION 9.02.  Final Distribution on the Certificates.................    138
</TABLE>

                                       iii

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
   SECTION 9.03.  Additional Termination Requirements....................    139

ARTICLE X MISCELLANEOUS PROVISIONS.......................................    140
   SECTION 10.01. Amendment..............................................    140
   SECTION 10.02. Counterparts...........................................    142
   SECTION 10.03. Governing Law..........................................    142
   SECTION 10.04. Intention of Parties...................................    142
   SECTION 10.05. Notices................................................    143
   SECTION 10.06. Severability of Provisions.............................    143
   SECTION 10.07. Assignment.............................................    144
   SECTION 10.08. Limitation on Rights of Certificateholders.............    144
   SECTION 10.09. Inspection and Audit Rights............................    144
   SECTION 10.10. Certificates Nonassessable and Fully Paid..............    145
   SECTION 10.11. [RESERVED].............................................    145
   SECTION 10.12. [RESERVED].............................................    145
   SECTION 10.13. Third Party Rights.....................................    145
   SECTION 10.14. Assignment; Sales; Advance Facilities..................    145
</TABLE>

                                       iv

<PAGE>

EXHIBIT A     FORMS OF OFFERED CERTIFICATES
EXHIBIT B     MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
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 FOR CLASS P AND CLASS C
              CERTIFICATES
EXHIBIT G     FORM OF INVESTMENT LETTER
EXHIBIT H     FORM OF RULE 144A INVESTMENT LETTER
EXHIBIT I     REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT J     FORM OF POWER OF ATTORNEY
EXHIBIT K     FORM OF BACK-UP CERTIFICATION OF TRUSTEE
EXHIBIT L     FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M     [RESERVED]
EXHIBIT N     FORM OF AUCTION PROCEDURES
EXHIBIT O-1   FORM OF CLASS A-1 CAP CONTRACT
EXHIBIT O-2   FORM OF CLASS A-2 CAP CONTRACT
EXHIBIT O-3   FORM OF SUBORDINATE CERTIFICATE CONTRACT
EXHIBIT O-4   FORM OF CREDIT SUPPORT ANNEX FOR THE CAP CONTRACTS
EXHIBIT P     [RESERVED]
EXHIBIT Q     FORM OF ASSESSMENT OF COMPLIANCE
EXHIBIT R     SERVICING CRITERIA TO BE ADDRESSED
EXHIBIT S     FORM OF SARBANES-OXLEY CERTIFICATION
EXHIBIT T     FORM OF ITEM 1123 CERTIFICATION OF SERVICER
EXHIBIT U-1   FORM OF SWAP AGREEMENT
EXHIBIT U-2   FORM OF CREDIT SUPPORT ANNEX FOR THE SWAP AGREEMENT
SCHEDULE V    ITEMS FOR FORM 8-K
SCHEDULE W    ITEMS FOR FORM 10-D
SCHEDULE X    ITEMS FOR FORM 10-K
<PAGE>

     POOLING AND SERVICING AGREEMENT, dated as of January 1, 2007 (the
"Agreement"), among MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware
corporation, as depositor (the "Depositor"), WILSHIRE CREDIT CORPORATION, a
Nevada corporation, as servicer (the "Servicer"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as trustee (the "Trustee").

     The Depositor is the owner of the Trust Fund that is hereby conveyed to the
Trustee in return for the Certificates. The Trust Fund for federal income tax
purposes will consist of (i) three real estate mortgage investment conduits in a
tiered structure, (ii) the right to receive the payments distributable to the
Class P Certificates pursuant to Section 4.04(b)(i) hereof, (iii) each Cap
Contract and the Cap Contract Account, (iv) the grantor trusts described in
Section 2.07 hereof and (v) the Supplemental Interest Trust, which in turn will
hold the Swap Agreement. The SWAP REMIC will consist of all of the assets
constituting the Trust Fund (other than the assets described in clauses (ii),
(iii), (iv) and (v) above, other than the SWAP REMIC Regular Interests and other
than the Lower Tier REMIC Regular Interests) and will be evidenced by the SWAP
REMIC Regular Interests (which will be uncertificated and will represent the
"regular interests" in the SWAP REMIC) and the Class SWR Interest as the single
"residual interest" in the SWAP REMIC. The Lower Tier REMIC will consist of SWAP
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
SWR Interest, 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 Sponsor 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.

THE SWAP REMIC

The following table sets forth the designations, initial principal balances and
interest rates for each interest in the SWAP REMIC:

<TABLE>
<CAPTION>
Class     Initial Principal Balance   Interest Rate
-----     -------------------------   -------------
<S>       <C>                         <C>
1-SW1          $67,411,909.156             (1)
1-SW1A         $ 5,050,604.190             (2)
1-SW1B         $ 5,050,604.190             (3)
1-SW2A         $ 6,155,142.894             (2)
1-SW2B         $ 6,155,142.894             (3)
1-SW3A         $ 6,744,239.496             (2)
1-SW3B         $ 6,744,239.496             (3)
1-SW4A         $ 6,314,231.794             (2)
1-SW4B         $ 6,314,231.794             (3)
1-SW5A         $ 5,679,132.506             (2)
1-SW5B         $ 5,679,132.506             (3)
1-SW6A         $ 5,139,796.457             (2)
1-SW6B         $ 5,139,796.457             (3)
</TABLE>

                                        1

<PAGE>

<TABLE>
<S>            <C>                    <C>
1-SW7A         $ 4,722,009.480             (2)
1-SW7B         $ 4,722,009.480             (3)
1-SW8A         $ 4,389,385.151             (2)
1-SW8B         $ 4,389,385.151             (3)
1-SW9A         $ 4,137,894.090             (2)
1-SW9B         $ 4,137,894.090             (3)
1-SW10A        $ 3,876,646.653             (2)
1-SW10B        $ 3,876,646.653             (3)
1-SW11A        $ 3,655,657.952             (2)
1-SW11B        $ 3,655,657.952             (3)
1-SW12A        $ 3,414,678.702             (2)
1-SW12B        $ 3,414,678.702             (3)
1-SW13A        $ 3,465,595.486             (2)
1-SW13B        $ 3,465,595.486             (3)
1-SW14A        $ 6,435,864.698             (2)
1-SW14B        $ 6,435,864.698             (3)
1-SW15A        $11,859,541.048             (2)
1-SW15B        $11,859,541.048             (3)
1-SW16A        $ 9,230,702.122             (2)
1-SW16B        $ 9,230,702.122             (3)
1-SW17A        $ 6,038,426.914             (2)
1-SW17B        $ 6,038,426.914             (3)
1-SW18A        $ 4,466,700.501             (2)
1-SW18B        $ 4,466,700.501             (3)
1-SW19A        $ 3,613,160.225             (2)
1-SW19B        $ 3,613,160.225             (3)
1-SW20A        $ 2,972,190.063             (2)
1-SW20B        $ 2,972,190.063             (3)
1-SW21A        $ 2,761,417.169             (2)
1-SW21B        $ 2,761,417.169             (3)
1-SW22A        $ 2,585,719.047             (2)
1-SW22B        $ 2,585,719.047             (3)
1-SW23A        $ 2,370,999.662             (2)
1-SW23B        $ 2,370,999.662             (3)
1-SW24A        $ 2,172,120.405             (2)
1-SW24B        $ 2,172,120.405             (3)
1-SW25A        $ 2,182,921.627             (2)
1-SW25B        $ 2,182,921.627             (3)
1-SW26A        $ 3,057,558.055             (2)
1-SW26B        $ 3,057,558.055             (3)
1-SW27A        $ 2,815,098.075             (2)
1-SW27B        $ 2,815,098.075             (3)
1-SW28A        $ 2,613,708.313             (2)
1-SW28B        $ 2,613,708.313             (3)
1-SW29A        $ 2,008,029.805             (2)
1-SW29B        $ 2,008,029.805             (3)
1-SW30A        $ 1,704,892.427             (2)
1-SW30B        $ 1,704,892.427             (3)
</TABLE>

                                        2

<PAGE>

<TABLE>
<S>            <C>                    <C>
1-SW31A        $ 1,510,968.714             (2)
1-SW31B        $ 1,510,968.714             (3)
1-SW32A        $ 1,407,442.010             (2)
1-SW32B        $ 1,407,442.010             (3)
1-SW33A        $ 1,271,174.424             (2)
1-SW33B        $ 1,271,174.424             (3)
1-SW34A        $ 1,144,056.840             (2)
1-SW34B        $ 1,144,056.840             (3)
1-SW35A        $ 1,043,426.129             (2)
1-SW35B        $ 1,043,426.129             (3)
1-SW36A        $   976,304.215             (2)
1-SW36B        $   976,304.215             (3)
1-SW37A        $   940,063.086             (2)
1-SW37B        $   940,063.086             (3)
1-SW38A        $   895,371.817             (2)
1-SW38B        $   895,371.817             (3)
1-SW39A        $   842,240.533             (2)
1-SW39B        $   842,240.533             (3)
1-SW40A        $   762,580.931             (2)
1-SW40B        $   762,580.931             (3)
1-SW41A        $18,141,804.116             (2)
1-SW41B        $18,141,804.116             (3)
2-SW2          $75,722,330.994             (4)
2-SW1A         $ 5,673,233.810             (5)
2-SW1B         $ 5,673,233.810             (6)
2-SW2A         $ 6,913,938.106             (5)
2-SW2B         $ 6,913,938.106             (6)
2-SW3A         $ 7,575,657.504             (5)
2-SW3B         $ 7,575,657.504             (6)
2-SW4A         $ 7,092,639.206             (5)
2-SW4B         $ 7,092,639.206             (6)
2-SW5A         $ 6,379,245.994             (5)
2-SW5B         $ 6,379,245.994             (6)
2-SW6A         $ 5,773,421.543             (5)
2-SW6B         $ 5,773,421.543             (6)
2-SW7A         $ 5,304,130.520             (5)
2-SW7B         $ 5,304,130.520             (6)
2-SW8A         $ 4,930,500.849             (5)
2-SW8B         $ 4,930,500.849             (6)
2-SW9A         $ 4,648,006.410             (5)
2-SW9B         $ 4,648,006.410             (6)
2-SW10A        $ 4,354,552.847             (5)
2-SW10B        $ 4,354,552.847             (6)
2-SW11A        $ 4,106,321.048             (5)
2-SW11B        $ 4,106,321.048             (6)
2-SW12A        $ 3,835,634.298             (5)
2-SW12B        $ 3,835,634.298             (6)
2-SW13A        $ 3,892,828.014             (5)
</TABLE>

                                        3

<PAGE>

<TABLE>
<S>            <C>                    <C>
2-SW13B        $ 3,892,828.014             (6)
2-SW14A        $ 7,229,266.802             (5)
2-SW14B        $ 7,229,266.802             (6)
2-SW15A        $13,321,564.452             (5)
2-SW15B        $13,321,564.452             (6)
2-SW16A        $10,368,646.878             (5)
2-SW16B        $10,368,646.878             (6)
2-SW17A        $ 6,782,833.586             (5)
2-SW17B        $ 6,782,833.586             (6)
2-SW18A        $ 5,017,347.499             (5)
2-SW18B        $ 5,017,347.499             (6)
2-SW19A        $ 4,058,584.275             (5)
2-SW19B        $ 4,058,584.275             (6)
2-SW20A        $ 3,338,596.437             (5)
2-SW20B        $ 3,338,596.437             (6)
2-SW21A        $ 3,101,839.831             (5)
2-SW21B        $ 3,101,839.831             (6)
2-SW22A        $ 2,904,481.953             (5)
2-SW22B        $ 2,904,481.953             (6)
2-SW23A        $ 2,663,292.338             (5)
2-SW23B        $ 2,663,292.338             (6)
2-SW24A        $ 2,439,895.595             (5)
2-SW24B        $ 2,439,895.595             (6)
2-SW25A        $ 2,452,028.373             (5)
2-SW25B        $ 2,452,028.373             (6)
2-SW26A        $ 3,434,488.445             (5)
2-SW26B        $ 3,434,488.445             (6)
2-SW27A        $ 3,162,138.425             (5)
2-SW27B        $ 3,162,138.425             (6)
2-SW28A        $ 2,935,921.687             (5)
2-SW28B        $ 2,935,921.687             (6)
2-SW29A        $ 2,255,576.195             (5)
2-SW29B        $ 2,255,576.195             (6)
2-SW30A        $ 1,915,068.573             (5)
2-SW30B        $ 1,915,068.573             (6)
2-SW31A        $ 1,697,238.286             (5)
2-SW31B        $ 1,697,238.286             (6)
2-SW32A        $ 1,580,948.990             (5)
2-SW32B        $ 1,580,948.990             (6)
2-SW33A        $ 1,427,882.576             (5)
2-SW33B        $ 1,427,882.576             (6)
2-SW34A        $ 1,285,094.160             (5)
2-SW34B        $ 1,285,094.160             (6)
2-SW35A        $ 1,172,057.871             (5)
2-SW35B        $ 1,172,057.871             (6)
2-SW36A        $ 1,096,661.285             (5)
2-SW36B        $ 1,096,661.285             (6)
2-SW37A        $ 1,055,952.414             (5)
</TABLE>

                                        4

<PAGE>

<TABLE>
<S>            <C>                    <C>
2-SW37B        $ 1,055,952.414             (6)
2-SW38A        $ 1,005,751.683             (5)
2-SW38B        $ 1,005,751.683             (6)
2-SW39A        $   946,070.467             (5)
2-SW39B        $   946,070.467             (6)
2-SW40A        $   856,590.569             (5)
2-SW40B        $   856,590.569             (6)
2-SW41A        $20,378,293.884             (5)
2-SW41B        $20,378,293.884             (6)
SWR                           (7)          (7)
</TABLE>

(1)  The interest rate on the Class 1-SW1 Interest shall be a per annum rate
     equal to the Group One Net WAC.

(2)  For any Distribution Date, the interest rate on each SWAP REMIC Regular
     Interest beginning with the designation "1" and ending with the designation
     "A" shall be a per annum rate equal to 2 times the Group One Net WAC,
     subject to a maximum rate of 2 times the REMIC Swap Rate for such
     Distribution Date.

(3)  For any Distribution Date, the interest rate on each SWAP REMIC Regular
     Interest beginning with the designation "1" and ending with the designation
     "B" shall be a per annum rate equal to the greater of (x) the excess, if
     any, of (i) 2 times the Group One Net WAC over (ii) 2 times the REMIC Swap
     Rate for such Distribution Date and (y) 0.00%.

(4)  The interest rate on the Class 2-SW2 Interest shall be a per annum rate
     equal to the Group Two Net WAC.

(5)  For any Distribution Date, the interest rate on each SWAP REMIC Regular
     Interest beginning with the designation "2" and ending with the designation
     "A" shall be a per annum rate equal to 2 times the Group Two Net WAC,
     subject to a maximum rate of 2 times the REMIC Swap Rate for such
     Distribution Date.

(6 ) For any Distribution Date, the interest rate on each SWAP REMIC Regular
     Interest beginning with the designation "2" and ending with the designation
     "B" shall be a per annum rate equal to the greater of (x) the excess, if
     any, of (i) 2 times the Group Two Net WAC over (ii) 2 times the REMIC Swap
     Rate for such Distribution Date and (y) 0.00%.

(7)  The Class SWR Interest shall have no principal amount and shall bear no
     interest.

THE LOWER TIER REMIC

     The following table sets forth the designations, initial principal
balances, interest rates, Corresponding Classes of Certificates and related
Mortgage Group for each interest in the Lower Tier REMIC:

<TABLE>
<CAPTION>
                                                   Class(es) of
                                                  Corresponding
         Initial Principal                   Certificates or Related
Class        Balance         Interest Rate        Mortgage Group
-----    -----------------   -------------   -----------------------
<S>      <C>                 <C>             <C>
LTA-1            (1)               (8)               A-1, R
LTA-2A           (1)               (8)                A-2A
LTA-2B           (1)               (8)                A-2B
LTA-2C           (1)               (8)                A-2C
LTA-2D           (1)               (8)                A-2D
LTM-1            (1)               (8)                 M-1
LTM-2            (1)               (8)                 M-2
</TABLE>

                                        5

<PAGE>

<TABLE>
<S>      <C>                 <C>             <C>
LTM-3            (1)               (8)                 M-3
LTM-4            (1)               (8)                 M-4
LTM-5            (1)               (8)                 M-5
LTM-6            (1)               (8)                 M-6
LTB-1            (1)               (8)                 B-1
LTB-2            (1)               (8)                 B-2
LTB-3            (1)               (8)                 B-3
LTIX             (2)               (8)                 N/A
LTII1A           (3)               (8)              Group One
LTII1B           (4)               (9)              Group One
LTII2A           (5)               (8)              Group Two
LTII2B           (6)              (10)              Group Two
LTIIX            (7)               (8)                 N/A
LT-IO           (11)              (11)                 N/A
LTR             (12)              (12)                 N/A
</TABLE>

(1)  The initial principal balance of each of these Lower Tier REMIC Regular
     Interests shall equal 1/4 of the initial Certificate Principal Balance of
     its Corresponding Certificates.

(2)  The initial principal balance of the Class LTIX Interest shall equal 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.

(3)  The initial principal balance of the Class LTII1A Interest shall equal
     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.

(4)  The initial principal balance of the Class LTII1B Interest shall equal
     0.05% of the aggregate Cut-off Date Principal Balance of the Group One
     Mortgage Loans.

(5)  The initial principal balance of the Class LTII2A Interest shall equal
     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.

(6)  The initial principal balance of the Class LTII2B Interest shall equal
     0.05% of the aggregate Cut-off Date Principal Balance of the Group Two
     Mortgage Loans.

(7)  The initial principal balance of the Class LTIIX Interest shall equal 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.

(8)  For each Distribution Date, the interest rate for each of the Lower Tier
     REMIC Regular Interests (other than the Class LTII1B, the Class LTII2B and
     the Class LT-IO Interests) shall be a per annum rate (but not less than
     zero) equal to the product of (i) the weighted average of the interest
     rates on the SWAP REMIC Regular Interests for such Distribution Date and
     (ii) a fraction the numerator of which is 30 and the denominator of which
     is the actual number of days in the Accrual Period for the LIBOR
     Certificates, provided however, that for any Distribution Date on which the
     Class LT-IO Interest is entitled to a portion of interest accruals on a
     SWAP REMIC Regular Interest ending with a designation "A" as described in
     footnote 11 below, such weighted average shall be computed by first
     subjecting the rate on such SWAP REMIC Regular Interest to a cap equal to
     Swap LIBOR for such Distribution Date.

(9)  For each Distribution Date, the interest rate for the Class LTII1B Interest
     shall be a per annum rate equal to the product of (i) the weighted average
     of the interest rates on the SWAP REMIC Regular Interests beginning with

                                        6

<PAGE>

     the designation "1" for such Distribution Date and (ii) a fraction the
     numerator of which is 30 and the denominator of which is the actual number
     of days in the Accrual Period for the LIBOR Certificates, provided,
     however, that for any Distribution Date on which the Class LT-IO Interest
     is entitled to a portion of interest accruals on a SWAP REMIC Regular
     Interest ending with a designation "A" as described in footnote 11 below,
     such weighted average shall be computed by first subjecting the rate on
     such SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for such
     Distribution Date.

(10) For each Distribution Date, the interest rate for the Class LTII2B Interest
     shall be a per annum rate equal to the product of (i) the weighted average
     of the interest rates on the SWAP REMIC Regular Interests beginning with
     the designation "2" for such Distribution Date and (ii) a fraction the
     numerator of which is 30 and the denominator of which is the actual number
     of days in the Accrual Period for the LIBOR Certificates, provided,
     however, that for any Distribution Date on which the Class LT-IO Interest
     is entitled to a portion of interest accruals on a SWAP REMIC Regular
     Interest ending with a designation "A" as described in footnote 11 below,
     such weighted average shall be computed by first subjecting the rate on
     such SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for such
     Distribution Date.

(11) The Class LT-IO Interest is an interest-only class that does not have a
     principal balance. For only those Distribution Dates listed in the first
     column of the table below, the Class LT-IO Interest shall be entitled to
     interest accrued on the SWAP REMIC Regular Interest listed in the second
     column below at a per annum rate equal to the excess, if any, of (i) the
     interest rate for such SWAP REMIC Regular Interest for such Distribution
     Date over (ii) Swap LIBOR for such Distribution Date.

<TABLE>
<CAPTION>
Distribution Date   SWAP REMIC Regular Interest
-----------------   ---------------------------
<S>                 <C>
       7                   Class 1-SW1A
                           Class 2-SW1A
       7-8                 Class 1-SW2A
                           Class 2-SW2A
       7-9                 Class 1-SW3A
                           Class 2-SW3A
       7-10                Class 1-SW4A
                           Class 2-SW4A
       7-11                Class 1-SW5A
                           Class 2-SW5A
       7-12                Class 1-SW6A
                           Class 2-SW6A
       7-13                Class 1-SW7A
                           Class 2-SW7A
       7-14                Class 1-SW8A
                           Class 2-SW8A
       7-15                Class 1-SW9A
                           Class 2-SW9A
       7-16                Class 1-SW10A
                           Class 2-SW10A
       7-17                Class 1-SW11A
                           Class 2-SW11A
       7-18                Class 1-SW12A
                           Class 2-SW12A
       7-19                Class 1-SW13A
                           Class 2-SW13A
       7-20                Class 1-SW14A
                           Class 2-SW14A
       7-21                Class 1-SW15A
                           Class 2-SW15A
       7-22                Class 1-SW16A
                           Class 2-SW16A
</TABLE>

                                        7

<PAGE>

<TABLE>
<S>                 <C>
       7-23                Class 1-SW17A
                           Class 2-SW17A
       7-24                Class 1-SW18A
                           Class 2-SW18A
       7-25                Class 1-SW19A
                           Class 2-SW19A
       7-26                Class 1-SW20A
                           Class 2-SW20A
       7-27                Class 1-SW21A
                           Class 2-SW21A
       7-28                Class 1-SW22A
                           Class 2-SW22A
       7-29                Class 1-SW23A
                           Class 2-SW23A
       7-30                Class 1-SW24A
                           Class 2-SW24A
       7-31                Class 1-SW25A
                           Class 2-SW25A
       7-32                Class 1-SW26A
                           Class 2-SW26A
       7-34                Class 1-SW27A
                           Class 2-SW27A
       7-35                Class 1-SW28A
                           Class 2-SW28A
       7-36                Class 1-SW29A
                           Class 2-SW29A
       7-37                Class 1-SW30A
                           Class 2-SW30A
       7-38                Class 1-SW31A
                           Class 2-SW31A
       7-39                Class 1-SW32A
                           Class 2-SW32A
       7-40                Class 1-SW33A
                           Class 2-SW33A
       7-41                Class 1-SW34A
                           Class 2-SW34A
       7-42                Class 1-SW35A
                           Class 2-SW35A
       7-43                Class 1-SW36A
                           Class 2-SW36A
       7-44                Class 1-SW37A
                           Class 2-SW37A
       7-45                Class 1-SW38A
                           Class 2-SW38A
       7-46                Class 1-SW39A
                           Class 2-SW39A
       7-47                Class 1-SW40A
                           Class 2-SW40A
       7-48                Class 1-SW41A
                           Class 2-SW41A
</TABLE>

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

UPPER TIER REMIC

                                        8

<PAGE>

The following table sets forth the designation, the initial principal balances,
the interest rates and Classes of Related Certificates for each of the interests
in the Upper Tier REMIC.

<TABLE>
<CAPTION>
                                  Initial Principal          Class of Related
Class                                  Balance        Rate     Certificates
-----                             -----------------   ----   ----------------
<S>                               <C>                 <C>    <C>
UTA-1                                    (1)           (2)         A-1
UTA-2A                                   (1)           (2)         A-2A
UTA-2B                                   (1)           (2)         A-2B
UTA-2C                                   (1)           (2)         A-2C
UTA-2D                                   (1)           (2)         A-2D
UTM-1                                    (1)           (2)         M-1
UTM-2                                    (1)           (2)         M-2
UTM-3                                    (1)           (2)         M-3
UTM-4                                    (1)           (2)         M-4
UTM-5                                    (1)           (2)         M-5
UTM-6                                    (1)           (2)         M-6
UTB-1                                    (1)           (2)         B-1
UTB-2                                    (1)           (2)         B-2
UTB-3                                    (1)           (2)         B-3
Uncertificated Class C Interest          (3)           (3)         N/A
UT-IO                                    (4)           (4)         N/A
Residual Interest                        (1)           (2)         R
</TABLE>

(1)  The initial principal balance of each of these REMIC Regular Interests
     shall equal the initial principal balance of its Class of Related
     Certificates.

(2)  The interest rates on each of these REMIC Regular Interests shall be an
     annual rate equal to the Pass-Through Rate for the Class of Related
     Certificates, provided that in lieu of the applicable Available Funds Caps
     set forth in the definition of an applicable Pass-Through Rate, the
     applicable Upper Tier REMIC Net WAC Cap shall be used.

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

(4)  The Class UT-IO Interest shall have no principal amount and will not have
     an interest rate, but will be entitled to 100% of the interest accrued with
     respect to the Class LT-IO Interest. The Class UT-IO Interest shall be
     represented by the Class C Certificates.

THE CERTIFICATES

The following table sets forth the Class designation, interest rate and initial
Class principal amount for each Class of Certificates comprising interests in
the Trust Fund.

<TABLE>
<CAPTION>
Class   Initial Class Principal Amount   Interest Rate
-----   ------------------------------   -------------
<S>     <C>                              <C>
A-1                   (1)                    (2)
A-2A                  (1)                    (2)
A-2B                  (1)                    (2)
A-2C                  (1)                    (2)
</TABLE>

                                        9

<PAGE>

<TABLE>
<S>     <C>                              <C>
A-2D                  (1)                    (2)
M-1                   (1)                    (2)
M-2                   (1)                    (2)
M-3                   (1)                    (2)
M-4                   (1)                    (2)
M-5                   (1)                    (2)
M-6                   (1)                    (2)
B-1                   (1)                    (2)
B-2                   (1)                    (2)
B-3                   (1)                    (2)
C                     (3)                    (3)
P                     (4)                    (4)
R                     (1)                    (2)(5)
</TABLE>

(1)  Each of these Classes of Certificates shall have initial principal balances
     as set forth in Section 5.01 hereof.

(2)  Each of these Classes of Certificates shall bear interest at a per annum
     rate equal to the Pass-Through Rate for such Certificates set forth in the
     definitions herein.

(3)  For federal income tax purposes, the Class C Certificate shall represent
     (i) the right to receive all distributions with respect to the REMIC
     Regular Interests represented by the Uncertificated Class C Interest and
     the Class UT-IO Interest and (ii) certain rights and obligations with
     respect to notional principal contracts as described in Section 2.07.

(4)  The Class P Certificates shall be entitled to the amounts distributable
     pursuant to Section 4.04(b) hereof and shall not represent a REMIC regular
     interest.

(5)  The Class R Interest represents ownership of the Class SWR Interest, the
     Class LTR Interest and the Residual Interest.

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

     Accountant's Attestation: As defined in Section 3.18(b) hereof.

     Accrual Period: With respect to each Class of the LIBOR Certificates, their
Corresponding REMIC Regular Interests 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, and
with respect to the SWAP REMIC Regular Interests and any Distribution Date, the
calendar month

                                       10

<PAGE>

immediately preceding the month in which such Distribution Date occurs. All
calculations of interest on each Class of the LIBOR Certificates, their
Corresponding REMIC Regular Interests 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, and all calculations of interest on the SWAP REMIC
Regular Interests will be made on the basis of a 360-day year consisting of
twelve 30-day months.

     Additional Form 10-D Disclosure: As defined in Section 3.20 hereof.

     Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate that is adjustable.

     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 (or, with respect to the interest-only Mortgage Loans,
payments of scheduled interest) (net of the Servicing Fee) on the related
Mortgage Loans that were due during the applicable Due Period and not received
as of the close of business on the related Determination Date, except as
provided in Section 4.01 hereof, 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 (i) any Mortgage Loan that is 150 days
delinquent or more (whether or not the Mortgage Loan has been converted to an
REO Property), (ii) shortfalls due to bankruptcy proceedings or the application
of the Relief Act or similar law and (iii) the principal portion of any amount
paid on a Balloon Loan, 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 (subject to
the exceptions described above and net of the related Servicing Fees), to be
calculated after taking into account rental income.

     Advance Facility: A financing or other facility as described in Section
10.14(a).

     Advance Facility Notice: As defined in Section 10.14(b).

     Advance Financing Person: As defined in Section 10.14(a).

     Advance Reimbursement Amounts: As defined in Section 10.14(a).

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

     Aggregate Certificate Principal Balance: For any date of determination, the
sum of the Class A-1 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 A-2D 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 M-4 Certificate Principal Balance, the Class M-5
Certificate Principal Balance, the Class M-6 Certificate Principal

                                       11

<PAGE>

Balance, the Class B-1 Certificate Principal Balance, the Class B-2 Certificate
Principal Balance, and the Class B-3 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, the "Appraised Value" of a
Mortgaged Property is the lesser of (1) the appraised value based on an
appraisal made for the Sponsor by an independent fee appraiser at the time of
the origination of the related Mortgage Loan, and (2) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.

     Assessment of Compliance: As defined in Section 3.18(a) hereof.

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

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

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

     Auction Termination Date: The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans (or if such Mortgage
Loan is an REO Property, the fair market value of such REO Property) is equal to
or less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.

     Auction Termination Price: In the case of an Auction Termination, as of the
initial Distribution Date on or after the Auction Termination Date, an amount
equal to the sum of (a) the aggregate Stated Principal Balance of each Mortgage
Loan (other than any Mortgage Loan that has become an REO Property), plus
accrued interest thereon at the applicable Mortgage Rate through the Due Date
preceding distribution of the proceeds, (b) the fair market value of any REO
Property, plus accrued interest thereon at the applicable Mortgage Rate, (c) any
unreimbursed fees, indemnification amounts, out-of-pocket costs and expenses
owed to the Trustee or the Servicer (including any costs and expenses incurred
in connection with the Auction Termination) and any unreimbursed Servicing Fees,
Advances and Servicing Advances, (d) all interest accrued on, as well as amounts
necessary to retire, the principal balance of any NIM Notes, (e) any costs and
damages incurred by the Issuing Entity (or the Trustee on behalf of the Issuing
Entity) in connection with any violation of any anti-predatory or anti-abusive
lending laws and (f) any Swap Termination Payment, other than a Defaulted Swap
Termination Payment, owed to the Swap

                                       12

<PAGE>

Counterparty; such Swap Termination Payment shall include any payment resulting
from the termination of the Swap Agreement after the Auction Termination Date
but prior to the final distribution to the Certificates.

     Available Funds Cap: Any of the Class A-1 Available Funds Cap, the Class
A-2 Available Funds Cap, and the Subordinate Certificate Available Funds Cap.

     Balloon Loan: A Mortgage Loan having an original term to stated maturity of
approximately 15 or 30 years which provides for level monthly payments of
principal and interest based on a 30-, 40-, 45- or 50-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, Class M and Class B Certificates constitute a Class of Book-Entry
Certificates.

     Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State of Oregon or Minnesota or 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 Subordinate Certificate Cap Contract.

     Cap Contract Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 4.04(j) in the name of the Trustee for the
benefit of the Issuing Entity and designated "U.S. Bank National Association, as
trustee, in trust for registered holders of Specialty Underwriting and
Residential Finance Trust, Mortgage Loan Asset-Backed Certificates, Series
2007-BC1." Funds in the Cap Contract Account shall be held in trust for the
Issuing Entity for the uses and purposes set forth in this Agreement.

     Cap Contract Counterparty: Swiss Re Financial Products Corporation, and any
successor thereto.

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

     Cap Posted Collateral Account: The segregated Eligible Account that may be
created and maintained by the Trustee pursuant to Section 4.04(j)(iv) in the
name of the Trustee for the benefit of the Issuing Entity and designated "U.S.
Bank National Association, as trustee, in trust for registered holders of
Specialty Underwriting and Residential Finance Trust, Mortgage Loan Asset-Backed
Certificates, Series 2007-BC1." Funds in the Posted Collateral Account shall be
held in trust for the Issuing Entity for the uses and purposes set forth in this
Agreement.

     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 Exhibit A.

                                       13
<PAGE>

     Certificate Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05(f) in the name of the Trustee for the
benefit of the Certificateholders and designated "U.S. Bank National
Association, as trustee, in trust for registered holders of Specialty
Underwriting and Residential Finance Trust, Mortgage Loan Asset-Backed
Certificates, Series 2007-BC1." 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-1 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-2 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(h). 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 immediately
preceding sentence, however, to the extent any excess referred to in the
immediately preceding sentence is attributable to distributions of proceeds of
the Swap Agreement, such sentence shall be applied by substituting the "Class C
Unpaid Realized Loss Amount" for the "Class C Interest Carry Forward Amount".
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 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

                                       14

<PAGE>

Holders of Certificates of a particular Class as a condition to the taking of
any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any Affiliate of the Depositor in determining
which Certificates are registered in the name of an Affiliate of the Depositor.

     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-1 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 A-2D Certificate Principal Balance.

     Class A Certificates: Any of the Class A-1, Class A-2A, Class A-2B, Class
A-2C and Class A-2D 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 Certificate Principal Balance of the
Class A and Class R Certificates immediately prior to such Distribution Date
over (B) the lesser of (1) 51.40% of the Stated Principal Balances of the
Mortgage Loans, and (2) the excess of the Stated Principal Balances of the
Mortgage Loans 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 and Class R 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, less the pro rata portion (calculated
based on the ratio of the Stated Principal Balance of the Mortgage Loans in
Group One to the Stated Principal Balance of the total pool of Mortgage Loans)
allocable to the Mortgage Loans in Group One of any Net Swap Payments or Swap
Termination Payments (other than Defaulted Swap Termination Payments) owed to
the Swap Counterparty for such Distribution Date, and (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.
The Class A-1 Available Funds Cap shall be related to the Class A-1 Certificates
and the Class R Certificates.

     Class A-1 Cap Contract: The confirmation and agreement (together with the
schedule thereto) and any related credit support annex (in the form of Exhibit
O-4 hereto), between the Trustee, on behalf of the Issuing Entity, and the Cap
Contract Counterparty (in the form of Exhibit O-1 hereto), with respect to the
Class A-1 Certificates.

     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
Schedule I to Exhibit O-1.

     Class A-1 Cap Contract Termination Date: The Distribution Date after the
Distribution Date in July 2007.

                                       15

<PAGE>

     Class A-1 Certificate: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, representing the
right to distributions as set forth herein.

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

     Class A-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1 Pass-Through Rate on
the Class A-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class A-1
Current Interest or a Class A-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 A-1
Certificates.

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

     Class A-1 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 0.1400% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.2800% per annum.

     Class A-1 Maximum Rate 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 that would have been due on the Group One Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans provided for
interest at their Net Mortgage Rates less the pro rata portion (calculated based
on the ratio of the Stated Principal Balance of the Group One Mortgage Loans to
the Stated Principal Balance of the total pool of Mortgage Loans) allocable to
the Group One Mortgage Loans of any Net Swap Payments or Swap Termination
Payments owed to the Swap Counterparty for such Distribution Date (other than
Defaulted Swap Termination Payments), and (y) the aggregate Stated Principal
Balance of the Group One Mortgage Loans 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.
The Class A-1 Maximum Rate Cap shall be related to the Class A-1 Certificates
and Class R Certificates.

     Class A-1 Pass-Through Rate: For the first Distribution Date, 5.4600% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1 Margin, (2) the Class A-1 Available Funds Cap, and (3) the
Class A-1 Maximum Rate Cap for such Distribution Date.

     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 Cap LIBOR and 10.860% per annum.

     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, less the pro rata portion (calculated
based on the ratio of the Stated Principal Balance of the Mortgage Loans in
Group Two to the Stated Principal Balance of the total pool of Mortgage Loans)
allocable to the Mortgage Loans in Group

                                       16

<PAGE>

Two of any Net Swap Payments or Swap Termination Payments (other than Defaulted
Swap Termination Payments) owed to the Swap Counterparty for such Distribution
Date, and (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. The Class A-2 Available Funds Cap shall be
related to the Class A-2 Certificates.

     Class A-2 Cap Contract: The confirmation and agreement (together with the
schedule thereto) and any related credit support annex (in the form of Exhibit
O-4 hereto), between the Trustee, on behalf of the Issuing Entity, and the Cap
Contract Counterparty (in the form of Exhibit O-2 hereto), with respect to the
Class A-2 Certificates.

     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
Schedule I to Exhibit O-2.

     Class A-2 Cap Contract Termination Date: The Distribution Date after the
Distribution Date in July 2007.

     Class A-2 Certificates: The Class A-2A, Class A-2B, Class A-2C and Class
A-2D Certificates.

     Class A-2 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12 and (ii) the quotient of (x) the total
scheduled interest that would have been due on the Group Two Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans provided for
interest at their Net Mortgage Rates less the pro rata portion (calculated based
on the ratio of the Stated Principal Balance of the Group Two Mortgage Loans to
the total pool of Stated Principal Balance of the Mortgage Loans) allocable to
the Group Two Mortgage Loans of any Net Swap Payments or Swap Termination
Payments owed to the Swap Counterparty for such Distribution Date (other than
Defaulted Swap Termination Payments), and (y) the aggregate Stated Principal
Balance of the Group Two Mortgage Loans 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.
The Class A-2 Maximum Rate Cap shall be related 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 Cap LIBOR and 10.350% per annum.

     Class A-2A Certificate: Any Certificate designated as a "Class A-2A
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, 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 Class A-2A
Current Interest or a Class A-2A Interest Carry Forward Amount that is recovered
as a voidable

                                       17

<PAGE>

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 Current Interest or Interest Carry Forward
Amounts 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
Auction Termination Date for the Certificates, 0.0600% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.1200% per annum.

     Class A-2A Pass-Through Rate: For the first Distribution Date, 5.3800% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2A Margin, (2) the Class A-2 Available Funds Cap and (3) the
Class A-2 Maximum Rate Cap for such Distribution Date.

     Class A-2B Certificate: Any Certificate designated as a "Class A-2B
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, representing the
right to distributions as set forth herein.

     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 Class A-2B
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 Current Interest or Interest Carry Forward
Amounts 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
Auction Termination Date for the Certificates, 0.1100% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.2200% per annum.

     Class A-2B Pass-Through Rate: For the first Distribution Date, 5.4300% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2B Margin, (2) the Class A-2 Available Funds Cap and (3) the
Class A-2 Maximum Rate Cap for such Distribution Date.

     Class A-2C Certificate: Any Certificate designated as a "Class A-2C
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, 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.

                                       18

<PAGE>

     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 Current Interest or Interest Carry Forward
Amounts 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
Auction Termination Date for the Certificates, 0.1700% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.3400% per annum.

     Class A-2C Pass-Through Rate: For the first Distribution Date, 5.4900% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2C Margin, (2) the Class A-2 Available Funds Cap and (3) the
Class A-2 Maximum Rate Cap for such Distribution Date.

     Class A-2D Certificate: Any Certificate designated as a "Class A-2D
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, representing the
right to distributions as set forth herein.

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

     Class A-2D Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2D Pass-Through Rate on
the Class A-2D Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class A-2D
Current Interest or a Class A-2D 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-2D
Certificates.

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

     Class A-2D Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 0.2200% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.4400% per annum.

     Class A-2D Pass-Through Rate: For the first Distribution Date, 5.5400% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2D Margin, (2) the Class A-2 Available Funds Cap and (3) the
Class A-2 Maximum Rate Cap for such Distribution Date.

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

                                       19

<PAGE>

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

     Class B-1 Certificates: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, representing the
right to distributions as set forth herein.

     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 Class B-1
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 Current Interest or Interest Carry Forward
Amounts 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
Auction Termination Date for the Certificates, 0.9000% per annum and, as of any
Distribution Date after the Auction Termination Date, 1.3500% per annum.

     Class B-1 Pass-Through Rate: For the first Distribution Date, 6.2200% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin, (2) the Subordinate Certificate Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate 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 Certificate Principal Balances of the Class A,
Class R and Class M Certificates 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 Certificate Principal Balances of the Class A
and Class R Certificates (after taking into account distributions of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance, the Class M-2 Certificate Principal Balance and
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-1/M-2/M-3 Principal Distribution Amount on such
Distribution Date), (C) the Class M-4 Certificate Principal Balance (after
taking into account distributions of the Class M-4 Principal Distribution Amount
on such Distribution Date), (D) the Class M-5 Certificate Principal Balance
(after taking into account distributions of the Class M-5 Principal Distribution
Amount on such Distribution Date), (E) the Class M-6 Certificate Principal
Balance (after taking into account distributions of the Class M-6 Principal
Distribution Amount on such Distribution Date), and (F) the Class B-1
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 86.60% of the Stated Principal Balances of the Mortgage
Loans and (B) the excess of the Stated Principal Balances of the Mortgage Loans
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 the Class A

                                       20

<PAGE>

Certificates, Class R Certificate and Class M Certificates has been reduced to
zero, the Class B-1 Principal Distribution 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, Class R 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 Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-2 Certificates.

     Class B-2 Certificates: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, representing the
right to distributions as set forth herein.

     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 Class B-2
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 Current Interest or Interest Carry Forward
Amounts 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
Auction Termination Date for the Certificates, 1.7500% per annum and, as of any
Distribution Date after the Auction Termination Date, 2.6250% per annum.

     Class B-2 Pass-Through Rate: For the first Distribution Date, 7.0700% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin, (2) the Subordinate Certificate Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate 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 Certificate Principal Balances of the Class A,
Class R, Class M and Class B-1 Certificates 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 Certificate Principal Balances of
the Class A and Class R Certificates (after taking

                                       21

<PAGE>

into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) (B) the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance and the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-1/M-2/M-3
Principal Distribution Amount on such Distribution Date), (C) the Class M-4
Certificate Principal Balance (after taking into account distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date), (D) the
Class M-5 Certificate Principal Balance (after taking into account distributions
of the Class M-5 Principal Distribution Amount on such Distribution Date), (E)
the Class M-6 Certificate Principal Balance (after taking into account
distributions of the Class M-6 Principal Distribution Amount on such
Distribution Date), (F) 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 (G) the Class B-2 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 88.60% of
the Stated Principal Balances of the Mortgage Loans and (B) the excess of the
Stated Principal Balances of the Mortgage Loans 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 the Class A Certificates, Class R Certificate, Class M
Certificates 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 R, 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 Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-3 Certificates.

     Class B-3 Certificates: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, representing the
right to distributions as set forth herein.

     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 Class B-3
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 Current Interest or Interest Carry Forward
Amounts 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.

                                       22

<PAGE>

     Class B-3 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 2.5000% per annum and, as of any
Distribution Date after the Auction Termination Date, 3.7500% per annum.

     Class B-3 Pass-Through Rate: For the first Distribution Date, 7.8200% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-3 Margin, (2) the Subordinate Certificate Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate 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 Certificate Principal Balances of the Class A,
Class R, Class M, Class B-1 and Class B-2 Certificates 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 Certificate Principal Balances
of the Class A and Class R Certificates (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance and the Class M-3 Certificate Principal Balance (after taking into
account distributions of the Class M-1/M-2/M-3 Principal Distribution Amount on
such Distribution Date), (C) the Class M-4 Certificate Principal Balance (after
taking into account distributions of the Class M-4 Principal Distribution Amount
on such Distribution Date), (D) the Class M-5 Certificate Principal Balance
(after taking into account distributions of the Class M-5 Principal Distribution
Amount on such Distribution Date), (E) the Class M-6 Certificate Principal
Balance (after taking into account distributions of the Class M-6 Principal
Distribution Amount on such Distribution Date), (F) the Class B-1 Certificate
Principal Balance (after taking into account distributions of the Class B-1
Principal Distribution Amount on such Distribution Date, (G) 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 (H) the
Class B-3 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 91.30% of the Stated Principal Balances of the
Mortgage Loans and (B) the excess of the Stated Principal Balances of the
Mortgage Loans 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 the
Class A Certificates, Class R Certificate, Class M Certificates, 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 R,
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 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, executed by the Trustee and authenticated by the Trustee in
substantially the form set forth in Exhibit A, representing the right to
distributions as set forth herein.

                                       23

<PAGE>

     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 the aggregate principal balance of the Lower Tier
REMIC Regular Interests immediately prior to such Distribution Date 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
(other than the Class LT-IO Interest) 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 REMIC Regular Interest of the
Corresponding Certificates (as adjusted, if necessary, for the length of the
Accrual Period for the LIBOR 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 (other than amounts so
added attributable to Subsequent Recoveries or proceeds of the Swap Agreement).

     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 Amount on all
previous Distribution Dates and (y) all increases in the Certificate Principal
Balance of such Class C Certificates (A) pursuant to the last sentence of the
definition of "Certificate Principal Balance" or (B) attributable to
distributions of proceeds of the Swap Agreement.

     Class LTA-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 Certificates 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.

                                       24

<PAGE>

     Class LTA-2D 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 LT-IO Interest: An uncertificated regular interest in the Lower Tier
REMIC with the characteristics set forth in the description of the Lower Tier
REMIC in the Preliminary Statement.

     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 rate set forth in footnote 9 to the description of the Lower
Tier REMIC in the Preliminary Statement.

     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 rate set forth in footnote 10 to the description of the Lower
Tier REMIC in the Preliminary Statement.

     Class LTIX 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 I Marker Interests, and with
an interest rate equal to the Net Rate.

     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.

                                       25

<PAGE>

     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 LTM-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 LTM-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 LTM-6 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, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.

     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, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, representing the
right to distributions as set forth herein.

     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 Class M-1
Current Interest or a 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 Current Interest or Interest Carry

                                       26

<PAGE>

Forward Amounts 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
Auction Termination Date for the Certificates, 0.2500% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.3750% per annum.

     Class M-1 Pass-Through Rate: For the first Distribution Date, 5.5700% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin and (2) the Subordinate Certificate Available Funds
Cap and (3) the Subordinate Certificate Maximum Rate Cap for such Distribution
Date.

     Class M-1/M-2/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 Certificate Principal
Balances of the Class A and Class R Certificates 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 Certificate Principal Balances of
the Class A and Class R Certificates (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, the Class M-2 Certificate Principal
Balance and the Class M-3 Certificate Principal Balance immediately prior to
such Distribution Date over (2) the lesser of (A) 73.10% of the Stated Principal
Balances of the Mortgage Loans and (B) the excess of the Stated Principal
Balances for the Mortgage Loans 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 the
Class A Certificates and Class R Certificate has been reduced to zero, the Class
M-1/M-2/M-3 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-1, Class M-2 and Class
M-3 Certificates and (y) 100% of the Principal Distribution Amount remaining
after any distributions on such Class A Certificates and Class R Certificate and
(II) in no event will the Class M-1/M-2/M-3 Principal Distribution Amount with
respect to any Distribution Date exceed the Class M-1, Class M-2 and Class M-3
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.

     Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, 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 Class

                                       27

<PAGE>

M-2 Current Interest or a 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 Current Interest or Interest Carry Forward
Amounts 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
Auction Termination Date for the Certificates, 0.2800% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.4200% per annum.

     Class M-2 Pass-Through Rate: For the first Distribution Date, 5.6000% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the Subordinate Certificate Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such Distribution Date.

     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 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, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, 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 Class M-3
Current Interest or a 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 Current Interest or Interest Carry Forward
Amounts 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.

                                       28

<PAGE>

     Class M-3 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 0.3200% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.4800% per annum.

     Class M-3 Pass-Through Rate: For the first Distribution Date, 5.6400% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the Subordinate Certificate Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such Distribution Date.

     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 M-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 M-4 Certificates.

     Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, representing the
right to distributions as set forth herein.

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

     Class M-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class M-4
Current Interest or a Class M-4 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-4
Certificates.

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

     Class M-4 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 0.3700% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.5550% per annum.

     Class M-4 Pass-Through Rate: For the first Distribution Date, 5.6900% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-4 Margin, (2) the Subordinate Certificate Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such Distribution Date.

     Class M-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 Certificate Principal Balances of the Class A,
Class R, Class M-1, Class M-2 and Class M-3 Certificates have been

                                       29

<PAGE>

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 Certificate
Principal Balances of the Class A and Class R Certificates (after taking into
account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance, the Class
M-2 Certificate Principal Balance and the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-1/M-2/M-3
Principal Distribution Amount on such Distribution Date) and (C) the Class M-4
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 77.00% of the Stated Principal Balances of the Mortgage
Loans and (B) the excess of the Stated Principal Balances for the Mortgage Loans
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 the Class A Certificates, the
Class R Certificate, the Class M-1 Certificates, the Class M-2 and the Class M-3
Certificates has been reduced to zero, the Class M-4 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate 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 R, Class M-1,
Class M-2 and Class M-3 Certificates and (II) in no event will the Class M-4
Principal Distribution Amount with respect to any Distribution Date exceed the
Class M-4 Certificate Principal Balance.

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

     Class M-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 M-5 Certificates.

     Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, representing the
right to distributions as set forth herein.

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

     Class M-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class M-5
Current Interest or a Class M-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 M-5
Certificates.

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

     Class M-5 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 0.3900% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.5850% per annum.

                                       30

<PAGE>

     Class M-5 Pass-Through Rate: For the first Distribution Date, 5.7100% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-5 Margin, (2) the Subordinate Certificate Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such Distribution Date.

     Class M-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 Certificate Principal Balances of the Class A,
Class R, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates 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 Certificate
Principal Balances of the Class A and Class R Certificates (after taking into
account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance, the Class
M-2 Certificate Principal Balance and the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-1/M-2/M-3
Principal Distribution Amount on such Distribution Date), (C) the Class M-4
Certificate Principal Balance (after taking into account distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date) and (D) the
Class M-5 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 80.70% of the Stated Principal Balances of the
Mortgage Loans and (B) the excess of the Stated Principal Balances for the
Mortgage Loans 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 the
Class A Certificates, the Class R Certificate, the Class M-1 Certificates, the
Class M-2, the Class M-3 and the Class M-4 Certificates has been reduced to
zero, the Class M-5 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class M-5 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class R, Class M-1, Class M-2, Class M-3 and Class M-4
Certificates and (II) in no event will the Class M-5 Principal Distribution
Amount with respect to any Distribution Date exceed the Class M-5 Certificate
Principal Balance.

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

     Class M-6 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-6 Certificates.

     Class M-6 Certificate: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, executed by the Trustee and authenticated by
the Trustee in substantially the form set forth in Exhibit A, representing the
right to distributions as set forth herein.

     Class M-6 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-6 Certificates.

     Class M-6 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Class M-6
Current Interest or a Class M-6 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-6
Certificates.

                                       31

<PAGE>

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

     Class M-6 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 0.4600% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.6900% per annum.

     Class M-6 Pass-Through Rate: For the first Distribution Date, 5.7800% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-6 Margin, (2) the Subordinate Certificate Available Funds Cap
and (3) the Subordinate Certificate Maximum Rate Cap for such Distribution Date.

     Class M-6 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 Certificate Principal Balances of the Class A,
Class R, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates
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
Certificate Principal Balances of the Class A and Class R Certificates (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance and the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-1/M-2/M-3
Principal Distribution Amount on such Distribution Date), (C) the Class M-4
Certificate Principal Balance (after taking into account distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date), (D) the
Class M-5 Certificate Principal Balance (after taking into account distributions
of the Class M-5 Principal Distribution Amount on such Distribution Date) and
(E) the Class M-6 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 82.90% of the Stated Principal
Balances of the Mortgage Loans and (B) the excess of the Stated Principal
Balances for the Mortgage Loans 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 the
Class A Certificates, the Class R Certificate, the Class M-1 Certificates, the
Class M-2, the Class M-3, the Class M-4 and the Class M-5 Certificates has been
reduced to zero, the Class M-6 Principal Distribution Amount will equal the
lesser of (x) the outstanding Certificate Principal Balance of the Class M-6
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class R, Class M-1, Class M-2, Class M-3,
Class M-4 and Class M-5 Certificates and (II) in no event will the Class M-6
Principal Distribution Amount with respect to any Distribution Date exceed the
Class M-6 Certificate Principal Balance.

     Class M-6 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-6 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-6 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-6 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, executed by the Trustee and authenticated by the Trustee in
substantially the form set forth in Exhibit A, representing the right to
distributions as set forth herein.

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     Class R Certificate: Any Certificate designated as a "Class R Certificate"
on the face thereof, executed by the Trustee and authenticated by the Trustee in
substantially the form set forth in Exhibit A, 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 Class R 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 Current Interest or Interest Carry Forward Amounts
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 Auction
Termination Date for the Certificates, 0.1400% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.2800% per annum.

     Class R Pass-Through Rate: For the first Distribution Date, 5.4600% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Class A-1 Available Funds Cap for such
Distribution Date and (3) the Class A-1 Maximum Rate Cap.

     Class SWR Interest: The sole class of "residual interest" in the SWAP
REMIC.

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

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

     Clean Up Call Price: An amount equal to the sum of (a) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that is an
REO Property), plus accrued interest thereon at the applicable Mortgage Rate
through the Due Date preceding distribution of the proceeds, (b) the fair market
value of any REO Property, plus accrued interest thereon, (c) any unreimbursed
fees, out-of-pocket expenses owed to the Trustee or the Servicer (including the
costs and expenses of conducting the auction described in Section 9.01(a)) and
any unreimbursed Servicing Fees, Advances or Servicing Advances, (d) all
interest accrued on, as well as amounts necessary to retire, the principal
balance of the NIM Notes, (e) any costs and damages incurred by the Issuing
Entity (or the Trustee on behalf of the Issuing Entity) in connection with any
violation by the affected Mortgage Loan of any anti-predatory or anti-abusive
lending laws and (f) any Swap Termination Payment, other than a Defaulted Swap
Termination Payment, owed to the Swap Counterparty; such Swap Termination
Payment shall include any payment resulting from the termination of the Swap
Agreement after the Clean Up Call Date but prior to the final distribution to
the Certificates.

     Closing Date: January 24, 2007.

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<PAGE>

     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, in trust for registered holders of Specialty Underwriting
and Residential Finance Trust, Mortgage Loan Asset-Backed Certificates, Series
2007-BC1". Funds in the Collection Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.

     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 and
(B) the sales price of the related Mortgaged Property at time of origination.

     Commission: The Securities and Exchange Commission.

     Compensating Interest: For any Distribution Date and all Principal
Prepayments in full in respect of a Mortgage Loan that are received during the
period from the first day of the related Prepayment Period through the last day
of the calendar month preceding such Distribution Date, a payment made by the
Servicer in an amount not to exceed the product of (a) one-twelfth of 0.25% and
(b) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date, equal to the amount of interest at the Net Mortgage Rate for
that Mortgage Loan from the date of prepayment through the last day of such
preceding calendar month.

     Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, 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.

     Corresponding Certificates: With respect to the Class LTA-1 Interest, the
Class A-1 and Class R 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 LTA-2D Interest, the Class A-2D
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 LTM-4 Interest, the Class M-4
Certificates. With respect to the Class LTM-5 Interest, the Class M-5
Certificates. With respect to the Class LTM-6 Interest, the Class M-6
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.

     Corresponding REMIC Regular Interest: For each Class of Certificates, the
interest in the Upper Tier REMIC listed on the same row in the table entitled
"Upper Tier REMIC" in the Preliminary Statement.

     Current Interest: Any of the Class A-1 Current Interest, the Class A-2A
Current Interest, the Class A-2B Current Interest, the Class A-2C Current
Interest, the Class A-2D 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 M-4 Current Interest, the Class M-5 Current
Interest, the Class M-6 Current Interest,

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<PAGE>

the Class B-1 Current Interest, the Class B-2 Current Interest, the Class B-3
Current Interest and the Class C Current Interest.

     Cut-off Date: January 1, 2007.

     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.

     Defaulted Swap Termination Payment: Any payment required to be made by the
Supplemental Interest Trust to the Swap Counterparty pursuant to the Swap
Agreement as a result of an event of default under the Swap Agreement with
respect to which the Swap Counterparty is the defaulting party or a termination
event (including a Downgrade Termination Event) under that agreement (other than
illegality or a tax event) with respect to which the Swap Counterparty is the
sole Affected Party (as defined in the Swap Agreement).

     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.

                                       35

<PAGE>

     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 after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in February 2007.

     Downgrade Termination Event: An event whereby (x) the Swap Counterparty (or
its guarantor) ceases to have short term unsecured and/or long term debt ratings
at least equal to the levels specified in the Swap Agreement, and (y) at least
one of the following events has not occurred (except to the extent otherwise
approved by the Rating Agencies): (i) (i) the Swap Counterparty fails to post
collateral securing its obligations under the Swap Agreement, (ii) the Swap
Counterparty fails to post collateral securing its obligations under the Swap
Agreement and/or fails to obtain a guarantor or a substitute swap counterparty
acceptable to the Supplemental Interest Trust Trustee and the Rating Agencies
(if required under the Swap Agreement) that will assume the obligations of the
Swap Counterparty under the Swap Agreement or (iii) the Swap Counterparty is
defaulting on certain obligations required as a result of the ratings downgrade
and the Supplemental Interest Trust Trustee obtains a guarantor or secures a
substitute swap counterparty acceptable to the Rating Agencies (if required
under the Swap Agreement) that will assume the obligations of the Swap
Counterparty under the Swap Agreement.

     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 banking association or banking corporation which has a
rating of at least A-1 by S&P or F1 by Fitch, or (iii) an account or accounts
the deposits in which are fully insured by the FDIC, or (iv) an account or
accounts, acceptable to each Rating Agency without reduction or withdrawal of
the rating of any Class of Certificates, as evidenced in writing, by a
depository institution in which such accounts are insured by the FDIC (to the
limit established by the FDIC), the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
and acceptable to the Trustee and each Rating Agency, the Certificateholders
have a claim with respect to the funds in such account and a perfected first
security interest against any collateral (which shall be limited to Permitted

                                       36

<PAGE>

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

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

     ERISA-Qualifying 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 and Class P Certificates and any
other Certificate, as long as the acquisition and holding of such other
Certificate is not covered by and exempt under any applicable underwriter's
exemption granted by the United States Department of Labor.

     Escrow Account: As defined in Section 3.06 hereof.

     Event of Default: As defined in Section 7.01 hereof.

     Exception Report: As defined in Section 2.02 hereof.

     Excess Interest: On any Distribution Date, for any Class of the Class A
Certificates, Class R Certificates, Class M Certificates 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 over (2) the
amount of interest such Class of Certificates would have been entitled to
receive on such Distribution Date at an interest rate equal to 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.

     Existing Servicing Agreement: The Servicing Agreement between Merrill Lynch
Mortgage Lending, Inc., as Owner, and Wilshire Credit Corporation, as Servicer,
dated as of January 1, 2005, as at any time amended and in effect.

                                       37
<PAGE>

     Extra Principal Distribution Amount: (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) $35,887,573 over (B) the Pool Stated
Principal Balance of the Mortgage Loans as of such Distribution Date and (2) on
and after the Stepdown Date, the excess, if any, 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) the greater of (a) 8.70% of the Pool Stated Principal Balance of the
Mortgage Loans and (b) the Minimum Required Overcollateralization Amount less
(B) the Pool 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 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 its 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 R, Class M
or Class B Certificates is based upon the related Available Funds Cap or the
related Maximum Rate Cap, the sum of (A) 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 or the related Maximum Rate Cap, up to
but not exceeding the greater of (a) the related Maximum Rate Cap or (b) the sum
of (i) the related Available Funds Cap and (ii) the product of (AA) 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 (BB) the sum of (x) the quotient of
(I) an amount equal to the proceeds, if any, payable under the related Cap
Contract and (II) the aggregate Certificate Principal Balance of each Class of
Certificates to which such Cap Contract relates for such Distribution Date and
(y) the quotient obtained by dividing (I) an amount equal to any Net Swap
Payments owed by the Swap Counterparty for such Distribution Date by (II) the
aggregate Stated Principal Balance of the Mortgage Loans as of the immediately
preceding Distribution Date over (2) the amount of interest such Class was
entitled to receive on such Distribution Date based on the applicable Available
Funds Cap; (B) the unpaid portion of any such excess from prior Distribution
Dates (and interest accrued thereon at the then applicable Pass-Through Rate,
without giving effect to the applicable Available Funds Cap) and (C) 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

                                       38

<PAGE>

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 as a
Mortgage Loan in Group One in the Mortgage Loan Schedule.

     Group One Net WAC: The Net WAC of Group One.

     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 (A) 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 Two Principal Distribution Amount in excess of the amount necessary to
reduce the Certificate Principal Balance of the Class A-2 Certificates to zero
will be applied to increase the Group One Principal Distribution Amount and (B)
with respect to any Distribution Date thereafter, 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 as a
Mortgage Loan in Group Two in the Mortgage Loan Schedule.

     Group Two Net WAC: The Net WAC of Group Two.

     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 (A) 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 One
Principal Distribution Amount in excess of the amount necessary to reduce the
Certificate Principal Balance of the Class A-1 Certificates and Class R
Certificates to zero will be applied to increase the Group Two Principal
Distribution Amount and (B) with respect to any Distribution Date thereafter,
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.

                                       39

<PAGE>

     Indenture: An indenture relating to the issuance of NIM Notes.

     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
(other than the Class P Certificates), 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.

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

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

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

     Interest Carry Forward Amount: Any of the Class A-1 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
A-2D 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 M-4
Interest Carry Forward Amount, the Class M-5 Interest Carry Forward Amount, the
Class M-6 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 or the Class C Interest Carry Forward Amount, as the case
may be.

     Interest Determination Date: With respect to the LIBOR Certificates, for
any Accrual Period, the second LIBOR Business Day preceding the commencement of
such Accrual Period.

     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, (3) all Compensating
Interest with respect to the Mortgage Loans, (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) proceeds of any
purchase pursuant to Sections 2.02, 2.03 or 9.01 (to the extent such proceeds
relate to interest) and (6) prepayment charges received with respect to the
Mortgage Loans during the related Prepayment Period less (A) all Non-Recoverable
Advances relating to interest and (B) other amounts reimbursable to the Servicer
and the Trustee pursuant to this Agreement and allocable to interest.

     Issuing Entity: Specialty Underwriting and Residential Finance Trust,
Series 2007-BC1.

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     Last Scheduled Distribution Date: With respect to any Class of
Certificates, the Distribution Date in January 2038.

     Latest Possible Maturity Date: The first Distribution Date following the
third anniversary of the scheduled maturity date of the Mortgage Loan in the
Trust Fund having the latest scheduled maturity date as of the Cut-off Date.

     Lender: As defined in Section 10.14(a).

     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.

     LIBOR Certificates: The Class A, Class M, Class B and Class R Certificates.

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

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

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

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

     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 and the Class LT-IO 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 Interests: Each of the Class LTA-1 Interest, the Class
LTA-2A Interest, the Class LTA-2B Interest, the Class LTA-2C Interest, the Class
LTA-2D Interest, the Class LTM-1 Interest, the Class LTM-2 Interest, the Class
LTM-3 Interest, the Class LTM-4 Interest, the Class LTM-5 Interest,

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<PAGE>

the Class LTM-6 Interest, the Class LTB-1 Interest, the Class LTB-2 Interest,
the Class LTB-3 Interest, the Class LTII1A Interest, the Class LTII1B Interest,
the Class LTII2A Interest, the Class LTII2B Interest, the Class LTIX Interest,
the Class LTIIX Interest, the Class LT-IO Interest and the Class LTR Interest.

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

     Lower Tier REMIC Subordinate 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 Subordinate 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.

     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 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, the mortgage, deed of trust or
other instrument 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.

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<PAGE>

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

     (i)  the loan number;

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

     (iii) the Initial Mortgage Rate;

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

     (v)  the original principal balance;

     (vi) the Cut-off Date Principal Balance;

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

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

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

     (x)  a code indicating the property type;

     (xi) 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; and

          (h)  the lifetime rate cap;

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<PAGE>

     (xii) the location of the related Mortgaged Property;

     (xiii) a code indicating whether a prepayment charge is applicable;

          (a)  the period during which such prepayment charge is in effect;

          (b)  the amount of such prepayment charge;

          (c)  any limitations or other conditions on the enforceability of such
               prepayment charge; and

          (d)  any other information pertaining to the prepayment charge
               specified in the related Mortgage Note;

     (xiv) the Credit Score and date obtained; and

     (xv) the MIN.

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

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

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

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

     Mortgaged Property: The underlying property securing a Mortgage Loan.

     Mortgagor: The obligor on a Mortgage Note.

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

     Net Rate: The per annum rate set forth in footnote 8 to the description of
the Lower Tier REMIC in the Preliminary Statement hereto (such rate being based
on the weighted average of the interest rates on the SWAP REMIC Regular
Interests as adjusted and as set forth in such footnote).

     Net Swap Payment: With respect to any Distribution Date, any net payment
(other than a Swap Termination Payment or Defaulted Swap Termination Payment)
made by the Supplemental Interest Trust to the Swap Counterparty on the related
Fixed Rate Payer Payment Date (as defined in the Swap Agreement) or made by the
Swap Counterparty to the Supplemental Interest Trust on the related Floating
Rate Payer Payment Date (as defined in the Swap Agreement). In each case, the
Net Swap Payment shall not be less than zero.

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<PAGE>

     Net WAC: With respect to any Distribution Date and for any Mortgage Group,
the weighted average Net Mortgage Rate for the Mortgage Loans in such Mortgage
Group 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).

     NIM Notes: Any net interest margin or excess cashflow securities to be
issued pursuant to an Indenture.

     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.

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

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

     Offered Certificates: The Class A Certificates, Class M Certificates, Class
B Certificates 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, the
Servicer or the Trustee (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 Cap LIBOR: As defined in the related Cap Contract.

     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

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<PAGE>

                    on the previous Interest Determination Date and (ii) the
                    Reserve Interest Rate.

     Notwithstanding the foregoing, this definition of One-Month LIBOR for the
purposes of the Cap Contracts and Swap Agreement will be determined in
accordance with such agreements.

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

     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).

     Overcollateralization Deficiency Amount: As of any date of determination,
if the Overcollateralization Amount is less than the Targeted
Overcollateralization Amount, then the amount equal to the Targeted
Overcollateralization Amount over the Overcollateralization Amount; otherwise,
zero.

     Overcollateralization Release Amount: As of any date of determination, if
the Overcollateralization Amount is greater than the Targeted
Overcollateralization Amount, then the amount equal to the Overcollateralization
Amount over the Targeted Overcollateralization Amount; otherwise, zero.

     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

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<PAGE>

                    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
                    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 Issuing Entity created
pursuant to this Agreement which shall be:

               (i)  holding Mortgage Loans transferred from the Depositor and
                    other assets of the Issuing Entity, including the Cap
                    Contracts and the Supplemental Interest Trust subtrust,
                    which in turn holds the Swap Agreement, 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 Issuing Entity;

               (iii) through the appropriate subtrust, as applicable, receiving
                    collections on the Mortgage Loans and the Swap Agreement 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 Issuing
                    Entity 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 their Affiliates, which is then receiving
                    the highest commercial or finance company paper rating of
                    each such Rating Agency;

               (iv) certificates of deposit, demand or time deposits, or
                    bankers' acceptances (other than banker's acceptances issued
                    by the Trustee or any of its Affiliates) issued by any
                    depository institution or trust company incorporated under
                    the laws of the United States or of any state thereof and
                    subject to supervision and examination by federal and/or
                    state banking authorities, provided that the commercial
                    paper and/or long term unsecured debt obligations of such
                    depository institution or trust

                                       47

<PAGE>

                    company are then rated one of the two highest long-term and
                    the highest short-term ratings of each such Rating Agency
                    for such securities;

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

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

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

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

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

               (x)  short term investment funds sponsored by any trust company
                    or national banking association incorporated under the laws
                    of the United States or any state thereof, including 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 Issuing
Entity or any REMIC provided for herein and (II) any such investment must be a
"permitted investment" within the meaning of Section 860G(a)(5) of the Code.
Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par. Any Permitted Investment may be held by
or through the Trustee or any of its Affiliates.

                                       48

<PAGE>

     Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Section 860E(c)(1) of the Code) with respect to 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.

     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.

     Posted Collateral: As defined in the Swap Agreement or the Cap Contracts,
as applicable.

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

     Prepayment Interest Excess: With respect to any Servicer Remittance Date,
for each Mortgage Loan that was the subject of 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 and other than a Principal
Prepayment in full on a Mortgage Loan received during the period from and
including the first day to and including the 14th day of the month of such
Distribution Date), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan as of the preceding Distribution Date exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment.

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<PAGE>

     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) the 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) prepayments
in full 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 the 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 Sponsor 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 relate to principal and represent payment in full), (6)
Subsequent Recoveries received during the related Due Period and (7) all other
collections and recoveries in respect of principal during the related Due
Period, less (A) all Non-Recoverable Advances relating to principal with respect
to the Mortgage Loans and (B) 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 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 January 22, 2007,
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 Sponsor pursuant to Section 2.02 or 2.03 hereof, or purchased
by the Servicer pursuant to Section 3.12(c) hereof, an amount equal to the sum
of (i) 100% of the unpaid principal balance of the Mortgage Loan as of the date
of such purchase together with any unreimbursed Servicing Advances, (ii) accrued
interest thereon at the applicable Mortgage Rate from (a) the date through which
interest was last paid by the Mortgagor to (b) the Due Date in the month in
which the Purchase Price is to be distributed to Certificateholders and (iii)
any costs and damages incurred by the Issuing Entity (or the Trustee on behalf
of the Issuing Entity) in connection with any violation by the affected Mortgage
Loan of any anti-predatory or anti-abusive lending laws. With respect to any REO
Property purchased by the Servicer pursuant to Section 3.12(c) hereof, an amount
equal to the fair market value of such REO Property, as determined in good faith
by the Servicer.

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<PAGE>

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

     Rating Agency Condition: As defined in the Swap Agreement.

     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) with respect to a Mortgage
Loan which is not a Liquidated Loan, any amount of principal that the Mortgagor
is no longer legally required to pay (except for the extinguishment of debt that
results from the exercise of remedies due to default by the Mortgagor).

     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 with respect to the first Distribution
Date, the Closing Date).

     Reference Banks: Barclays Bank PLC, U.S. Bank National Association,
Citibank, 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 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.

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

     Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed Reg. 1,506, 1.531 (Jan. 7, 2005)) or by the staff of
the Commission, or as may be provided by the Commission or its staff from time
to time.

     Related Certificates: For each interest in the Upper Tier REMIC, the Class
of Certificates listed on the same row in the table entitled "Upper Tier REMIC"
in the Preliminary Statement.

     Relief Act: The Servicemembers Civil Relief Act or any similar state laws
or regulations.

     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 (or, as the context requires, all) of the SWAP REMIC, the Lower Tier
REMIC and the Upper Tier REMIC.

     REMIC Pass-Through Rate: In the case of a Class of the Class A, Class M and
Class B Certificates, the Upper Tier REMIC Net WAC Cap for the Corresponding
REMIC Regular Interest.

     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,

                                       51

<PAGE>

notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.

     REMIC Regular Interests: Each of the interests in the Upper Tier REMIC as
set forth in the Preliminary Statement other than the Residual Interest.

     REMIC SWAP Rate: For each Distribution Date (and the related Accrual
Period), a per annum rate equal to the Fixed Rate under the Swap Agreement for
such Distribution Date, as set forth in the Prospectus Supplement.

     Remittance Report: As defined in Section 4.04(k) 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 Depositor for
a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance (or in the case of a substitution of more than
one Mortgage Loan for a Deleted Mortgage Loan, an aggregate 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 a Combined
Loan-to-Value Ratio, in the case of 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; and (9) 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.

     Required Percentage: With respect to any Distribution Date following a
Stepdown Date, the quotient of (1) the excess of (A) the aggregate Stated
Principal Balance 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

                                       52

<PAGE>

Distribution Date and (2) the aggregate Stated Principal Balance of the Mortgage
Loans as of such Distribution Date.

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

     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 Certificate: The Class R Certificate.

     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 (i) distributions in respect of the Class SWR Interest and the Class LTR
Interest, and (ii) distributions on the Class R Certificate in respect of Excess
Interest.

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

     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 Ratings Services, a division of The McGraw-Hill
Companies, Inc., or its successor in interest.

     Sale Agreement: The Mortgage Loan Sale and Assignment Agreement, dated as
of January 1, 2007, between the Depositor and the Sponsor.

     Sarbanes-Oxley Certification: As defined in Section 3.20 hereof.

     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.

     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.

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<PAGE>

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

     Servicer's Assignee: As defined in Section 10.14(a).

     Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations hereunder, including, but not limited to, the cost of (1) the
preservation, restoration and protection of a Mortgaged Property, including
without limitation advances in respect of prior liens, 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, substitutions
of trustees on deeds of trust or assignments of mortgage to the extent not
otherwise recovered from the related Mortgagor or payable under this Agreement,
(5) correcting errors of prior servicers; tax tracking; title research; flood
certification; and 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.

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

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

     Servicing Fee Rate: 0.500% per annum.

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

     Servicing Rights Pledgee: One or more lenders, selected by the Servicer, to
which the Servicer may pledge and assign all of its right, title and interest
in, to and under this Agreement.

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

                                       54

<PAGE>

     Significance Estimate: With respect to any Distribution Date, and in
accordance with Item 1115 of Regulation AB, shall be an amount determined based
on the reasonable good-faith estimate by the Depositor or its affiliate of the
aggregate maximum probable exposure of the outstanding Certificates to the Swap
Agreement.

     Significance Percentage: With respect to any Distribution Date, and in
accordance with Item 1115 of Regulation AB, shall be a percentage equal to the
Significance Estimate divided by the aggregate outstanding Stated Principal
Balance of the Mortgage Loans, prior to the distribution of the Principal
Distribution Amount on such Distribution Date.

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

     SPV: As defined in Section 10.14(a).

     Startup Day: As defined in Section 2.07 hereof.

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

     Stepdown Date: The earlier to occur of (1) the first Distribution Date on
which the Class A Certificate Principal Balance and the Class R Certificate
Principal Balance have been reduced to zero and (2) the later to occur of (A)
the Distribution Date in February 2010 or (B) the first Distribution Date on
which the Class A Certificate Principal Balance (after giving effect to
distributions of the Principal Funds amount for such Distribution Date) is less
than or equal to 51.40% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the end of the immediately preceding Due Period.

     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>
February 2009 - January 2010     1.65% with respect to February 2009, plus an
                                 additional 1/12th of 1.95% for each month
                                 thereafter
February 2010 -January 2011      3.60% with respect to February 2010, plus an
                                 additional 1/12th of 2.05% for each month
                                 thereafter
February 2011 -January 2012      5.65% with respect to February 2011, plus an
                                 additional 1/12th of 1.65% for each month
                                 thereafter
February 2012 - January 2013     7.30% with respect to February 2012, plus an
                                 additional 1/12th of 0.90% for each month
                                 thereafter
February 2013 and thereafter     8.20%
</TABLE>

                                       55

<PAGE>

     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 sixty (60) or
more days Delinquent measured on a rolling three month basis (including, for the
purposes of this calculation, Mortgage Loans in foreclosure, 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 Advance Date, equals or exceeds the product of (i) 32.75% and (ii)
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.

     Subcontractor: Any outsourcer that performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to 5% or more of the
Mortgage Loans under the direction or authority of a Servicer (measured by
aggregate Stated Principal Balance of the Mortgage Loans, annually at the
commencement of the calendar year prior to the year in which an Assessment of
Compliance is required to be delivered, multiplied by a fraction, the numerator
of which is the number of months during which such Subcontractor performs such
discrete functions and the denominator of which is 12, or, in the case of the
year in which the Closing Date occurs, the number of months elapsed in such
calendar year).

     Subordinate 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 from the aggregate Stated Principal Balance of
each Mortgage Group, the current Certificate Principal Balance of the Class A-1
and Class R Certificates, in the case of Group One, or the Class A-2A, Class
A-2B, Class A-2C and Class A-2D Certificates, in the case of Group Two) of the
Class A-1 Available Funds Cap and the Class A-2 Available Funds Cap.

     Subordinate Certificate Cap Contract: The confirmation and agreement
(together with the schedule thereto) and any related credit support annex (in
the form of Exhibit O-4 hereto), between the Trustee, on behalf of the Issuing
Entity, and the Cap Contract Counterparty (in the form of Exhibit O-3 hereto),
with respect to the Subordinate Certificates.

     Subordinate Certificate Cap Contract Notional Balance: With respect to any
Distribution Date, the Subordinate Certificate Cap Contract Notional Balance set
forth for such Distribution Date in the Subordinate Certificate One Month LIBOR
Cap Table attached hereto as Schedule I to Exhibit O-3.

     Subordinate Certificate Cap Contract Termination Date: The day after the
Distribution Date in July 2007.

     Subordinate 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
each Mortgage Group, the current Certificate Principal Balance of the Class A-1
and Class R Certificates, in the case of Group One, or the Class A-2A, Class
A-2B, Class A-2C and Class A-2D Certificates, in the case of Group Two) of the
Class A-1 Maximum Rate Cap and the Class A-2 Maximum Rate Cap.

     Subordinate Certificate Upper Collar: With respect to each Distribution
Date with respect to which payments are received on the Subordinate Certificate
Cap Contract, a rate equal to the lesser of One-Month Cap LIBOR and 8.930% per
annum.

     Subordinate Certificates: The Class M and Class B Certificates.

                                       56

<PAGE>

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

     Subservicer: Any Person that services Mortgage Loans on behalf of the
Servicer pursuant to a subservicing agreement and is responsible for the
performance of the material servicing functions required to be performed by the
Servicer under this Agreement that are identified in Item 1122(d) of Regulation
AB with respect to 10% or more of the Mortgage Loans under the direction or
authority of the Servicer (measured by aggregate Stated Principal Balance of the
Mortgage Loans, annually at the commencement of the calendar year prior to the
year in which an Assessment of Compliance is required to be delivered,
multiplied by a fraction, the numerator of which is the number of months during
which such Subservicer services the related Mortgage Loans and the denominator
of which is 12, or, in the case of the year in which the Closing Date occurs,
the number of months elapsed in such calendar year). Any subservicer shall meet
the qualifications set forth in Section 3.02.

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

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

     Supplemental Interest Trust: The separate trust, established pursuant to
Section 4.04(l) of this Agreement and held by the Trustee for the benefit of the
holders of the Certificates as a segregated subtrust of the Trust Fund, in which
the Swap Agreement will be held, out of which any Swap Termination Payments or
Net Swap Payments owed to the Swap Counterparty will be paid, certain
distributions to Certificateholders will be made, and into which any Swap
Termination Payments or Net Swap Payments received from the Swap Counterparty
will be deposited as set forth in Section 4.04 hereof.

     Supplemental Interest Trust Trustee: U.S. Bank National Association, a
national banking association, not in its individual capacity, but solely in its
capacity as trustee of the Supplemental Interest Trust 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.

     Swap Account: The separate Eligible Account created and maintained by the
Supplemental Interest Trust Trustee pursuant to Section 4.04(l) in the name of
the Supplemental Interest Trust Trustee for the benefit of the Trust Fund and
designated "U.S. Bank National Association, as trustee, in trust for registered
holders of Specialty Underwriting and Residential Finance Trust, Mortgage Loan
Asset-Backed Certificates, Series 2007-BC1." Funds in the Swap Account shall be
held in trust for the Issuing Entity for the uses and purposes set forth in this
Agreement.

     Swap Agreement: The interest rate swap agreement (together with the
schedule thereto), including the credit support annex (in the form of Exhibit
U-2) and any related confirmation thereto, between the Swap Counterparty and the
Supplemental Interest Trust Trustee for the benefit of the Issuing Entity (in
the form of Exhibit U-1).

     Swap Counterparty: Swiss Re Financial Products Corporation, or any
successor counterparty who meets the requirements set forth in the Swap
Agreement.

     Swap LIBOR: With respect to any Distribution Date (and the related Accrual
Period) the product of (i) the Floating Rate Option (as defined in the Swap
Agreement for the related Swap Payment Date),

                                       57

<PAGE>

(ii) two and (iii) the quotient of (a) the actual number of days in the Accrual
Period for the Lower Tier REMIC Interests divided by (b) 30.

     Swap Payment Date: For so long as the Swap Agreement is in effect or
amounts remain unpaid thereunder, two Business Days immediately preceding each
Distribution Date.

     Swap Posted Collateral Account: The segregated collateral account that may
be created and maintained by the Supplemental Interest Trust Trustee pursuant to
Section 4.04(l) in the name of the Supplemental Interest Trust Trustee for the
benefit of the Supplemental Interest Trust and designated "U.S. Bank National
Association, as trustee, in trust for registered holders of Specialty
Underwriting and Residential Finance Trust, Mortgage Loan Asset-Backed
Certificates, Series 2007-BC1." Funds in the Posted Collateral Account shall be
held in trust for the Supplemental Interest Trust for the uses and purposes set
forth in this Agreement.

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

     SWAP REMIC Interests: Each of the interests in the SWAP REMIC as set forth
in the Preliminary Statement.

     SWAP REMIC Regular Interests: Each of the SWAP REMIC Interests other than
the Class SWR Interest.

     Swap Termination Payment: Any payment payable by the Supplemental Interest
Trust or the Swap Counterparty upon termination of the Swap Agreement as a
result of termination of the Swap Agreement.

     Targeted Overcollateralization Amount: As of any Determination Date, (a)
prior to the Stepdown Date, 4.35% of the Cut-Off Date Principal Balance of the
Mortgage Loans and (b) on or after the Stepdown Date, 8.70% of the Stated
Principal Balance of the Mortgage Loans.

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

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

     Trust Fund: The corpus of the Issuing Entity created hereunder consisting
of (i) the Mortgage Loans and all interest and principal received on or with
respect thereto on and after the Cut-off Date to the extent not applied in
computing the Cut-off Date Principal Balance thereof, exclusive of interest not
required to be deposited in the Collection Account; (ii) the Collection Account
and the Certificate Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) property that secured a Mortgage
Loan and has been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (iv) the mortgagee's rights under the Insurance Policies with respect
to the Mortgage Loans and/or the related Mortgaged Properties; (v) all proceeds
of the conversion, voluntary or involuntary, of any of the foregoing into cash
or other liquid property; (vi) the Cap Contracts and the Cap Contract Account;
and (vii) the Supplemental Interest Trust that in turn holds the Swap Agreement.

     Trustee: U.S. Bank National Association, 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.

                                       58
<PAGE>

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

     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 M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized Loss Amount,
Class M-6 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 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 Subordinate Certificate Upper Collar.

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

     Upper Tier REMIC Net WAC Cap: In the case of the Class UTA-1 Interest and
the Residual Interest, a per annum rate equal to the weighted average of the
interest rate of the Class LTII1B Interest for such Distribution Date. In the
case of the Class UTA-2A, Class UTA-2B, Class UTA-2C and Class UTA-2D Interests,
a per annum rate equal to the weighted average of the interest rate for the
Class LTII2B for such Distribution Date. In the case of the Class UTM-1, Class
UTM-2, Class UTM-3, Class UTM-4, Class UTM-5, Class UTM-6, Class UTB-1, Class
UTB-2 and Class UTB-3 Interests, a per annum rate equal to the weighted average
of the interest rates of Class LTII1B and Class LTII2B Interests for such
Distribution weighted, respectively, on the basis of the uncertificated
principal balances of the Class LTII1A and the Class LTII2A Interests. In the
case of any interest in the Upper Tier REMIC that accrues interest on a "30/360"
basis, the per annum rates described in this definition shall be adjusted to
reflect accruals on such basis.

     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 98% to the Offered Certificates, 2% to the Class C and Class
P Certificates, with the allocation among the Offered Certificates to be in
proportion to the Class Certificate Principal Balance of each Class relative to
the Class Certificate Principal Balance of all other Classes. Voting Rights will
be allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests.

                                   ARTICLE II
          CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES

     SECTION 2.01. Conveyance of Mortgage Loans.

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

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

     (a) all pages of the original Mortgage Note, signed by the borrower(s) and
endorsed, "Pay to the order of blank, without recourse" and signed in the name
of the prior holder by an authorized officer. Such signature on the endorsement
shall be an original signature of such authorized officer and have

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printed the endorser's name, title and company name. To the extent that there is
no room on the face of the Mortgage Note for endorsements, the endorsement may
be contained on an allonge, if the law by which such Mortgage Note is governed
so permits. The Mortgage Note shall include all intervening endorsements showing
a complete chain of title from the originator to the Sponsor;

     (b) all original pages of any riders referred to in the Mortgage Note;

     (c) for each Mortgage Loan that is not a MOM Mortgage Loan, the original
recorded Mortgage, together with all riders referred to in the Mortgage, and
legal description, with evidence of recording thereon or if the original is not
available, a copy certified by the applicable public recording office. If the
original Mortgage has not yet been returned from the recording office, a copy of
the original Mortgage, together with all riders thereto, that has been delivered
for recording in the appropriate recording office of the jurisdiction in which
the Mortgaged Property is located;

     (d) for each Mortgage Loan that is not a MERS Mortgage Loan, the original
Mortgage Assignment, executed in blank, in form and substance acceptable for
recording and signed in the name of the last endorsee by an authorized officer;

     (e) the policy of title insurance (or a preliminary title report if the
original title insurance policy has not been received from the title insurance
company);

     (f) for each Mortgage Loan that is not a MERS Mortgage Loan, originals of
any intervening Mortgage Assignments, with evidence of recording thereon, or if
the original is not available, a copy certified by the applicable public
recording office. If the original intervening assignment has not yet been
returned from the recording office, a copy of such assignment which has been
sent for recording in the appropriate jurisdiction in which the Mortgaged
Property is located, showing a complete chain of title from the originator to
the Seller;

     (g) in the case of each MOM Loan, the original Mortgage, together with all
riders thereto, with evidence of recording thereon, noting the presence of the
MIN of the Mortgage Loan and language indicating that the Mortgage Loan is a MOM
Loan or if the original Mortgage is not available, a copy certified by the
applicable public recording office. If the original Mortgage has not yet been
returned from the recording office, a copy of such Mortgage which has been sent
for recording in the appropriate jurisdiction in which the Mortgaged Property is
located;

     (h) in the case of each MERS Mortgage Loan that is not a MOM Loan, the
original Mortgage Assignment or if the original Mortgage is not available, a
copy certified by the applicable public recording office, with evidence of
recording thereon, and all intervening Mortgage Assignments, with evidence of
recording thereon, showing a complete chain of title from the originator to
MERS;

     (i) all original pages of assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;

     (j) with respect to a Mortgage Loan that, according to the Mortgage Loan
Schedule is covered by a primary mortgage insurance policy, the original or a
copy of the policy of primary mortgage insurance; and

     (k) if the Mortgage Note or the Mortgage has been signed by any Person on
behalf of the Mortgagor, the original power of attorney or other instrument that
authorized and empowered such Person to sign, or a copy of such power of
attorney that has been delivered for recording in the appropriate recording
office of the jurisdiction in which the Mortgaged Property is located.

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

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

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

     It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Sponsor 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 Sponsor 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
Sponsor 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.

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

     The parties hereto agree and understand 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; (iii) a "High-Cost
Home Loan" as defined in the Massachusetts Predatory Home Loan Practices Act
effective November 7, 2004; (iv) a "High-Cost Home Loan" as defined by the
Indiana High Cost Home Loan Law effective January 1, 2005 or (v) a "High-Cost
Home Loan" as defined by the Illinois High Risk Home Loan Act effective January
1, 2004.

     SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.

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

     The Trustee acknowledges receipt of the three Cap Contracts (forms of which
are attached hereto as Exhibits O-1, O-2 and O-3) and is hereby instructed to
enter into the Cap Contracts, not in its individual capacity, but solely as
Trustee of the Issuing Entity. The Trustee also acknowledges receipt of the Sale
Agreement.

     The Trustee acknowledges receipt of the Swap Agreement that will be held in
the Supplemental Interest Trust and is hereby instructed to enter into the Swap
Agreement, not in its individual capacity, but solely as the Supplemental
Interest Trust Trustee.

     The Trustee agrees, for the benefit of Certificateholders, to review each
Mortgage File delivered to it within sixty (60) days after the Closing Date to
ascertain and to certify, within seventy (70) days of the Closing Date, to the
Depositor and the Servicer that all documents required by Section 2.01, except
those listed on the exception report attached thereto, 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

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Servicer, the Sponsor and the Depositor. In addition, the Trustee shall also
notify the Servicer, the Sponsor and the Depositor if the original Mortgage with
evidence of recording thereon with respect to a Mortgage Loan is not received
within seventy (70) days of the Closing Date; if it has not been received
because of a delay caused by the public recording office where such Mortgage has
been delivered for recordation, the Depositor shall deliver or cause to be
delivered to the Trustee written notice stating that such Mortgage has been
delivered to the appropriate public recording 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 Sponsor correct or cure
such omission, defect or other irregularity, or substitute a Mortgage Loan
pursuant to the provisions of Section 2.03(c), within ninety (90) days from the
date the Sponsor was notified of such omission or defect and, if the Sponsor
does not correct or cure such omission or defect within such period, that the
Sponsor purchase such Mortgage Loan from the Issuing Entity within ninety (90)
days from the date the Trustee notified the Sponsor of such omission, defect or
other irregularity at the Purchase Price of such Mortgage Loan. The Purchase
Price for any Mortgage Loan purchased pursuant to this Section 2.02 shall be
paid to the Servicer and deposited by the Servicer in the Collection Account
promptly upon receipt, and, upon receipt by the Trustee of written notification
of such deposit signed by a Servicing Officer, the Trustee, upon receipt of a
Request for Release, shall promptly release to the Sponsor the related Mortgage
File and the Trustee shall execute and deliver such instruments of transfer or
assignment, without recourse, representation or warranty, as shall be necessary
to vest in the Sponsor 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 Sponsor to purchase, cure or substitute any Mortgage Loan as
to which a material defect in or omission of a constituent document exists shall
constitute the sole remedy respecting such defect or omission available to the
Trustee on behalf of Certificateholders. The preceding sentence shall not,
however, limit any remedies available to the Certificateholders, the Depositor
or the Trustee pursuant to the Sale Agreement. The Trustee shall be under no
duty or obligation to inspect, review and examine such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable,
recordable or appropriate to the represented purpose, or that they have actually
been recorded, or that they are other than what they purport to be on their
face. The Trustee shall keep confidential the name of each Mortgagor and the
Trustee shall not solicit any such Mortgagor for the purpose of refinancing the
related Mortgage Loan. It is understood and agreed that all rights and benefits
relating to the solicitation of any Mortgagors and the attendant rights, title
and interest in and to the list of Mortgagors and data relating to their
Mortgages shall be retained by the Servicer.

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

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

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

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

          (ii) The Depositor has the full corporate power and authority to
     execute, deliver and perform, and to enter into and consummate the
     transactions contemplated by, this Agreement and the Sale Agreement and has
     duly authorized, by all necessary corporate action on its part, the

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     execution, delivery and performance of this Agreement and the Sale
     Agreement; and this Agreement and the Sale Agreement, assuming the due
     authorization, execution and delivery hereof by the other parties hereto,
     constitutes a legal, valid and binding obligation of the Depositor,
     enforceable against the Depositor in accordance with its terms, subject, as
     to enforceability, to (i) bankruptcy, insolvency, reorganization,
     moratorium and other similar laws affecting creditors' rights generally and
     (ii) general principles of equity, regardless of whether enforcement is
     sought in a proceeding in equity or at law.

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

          (vi) Each Mortgage Loan in Group One has a Stated Principal Balance as
     of the Cut-off Date that complies with the loan limitations of Fannie Mae
     and Freddie Mac as in effect on the Cut-off Date.

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

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     (c) Upon discovery by any of the Depositor, the Servicer, or the Trustee of
a breach of any of representations and warranties set forth in the Sale
Agreement that adversely and materially affects the value of the related
Mortgage Loan, prepayment charges or the interests of the Certificateholders,
the party discovering such breach shall give prompt written notice to the other
parties. Within ninety (90) days of the discovery of a breach of any
representation or warranty given to the Trustee by the Depositor, the Sponsor
and assigned by the Depositor to the Trustee, the Depositor, or the Sponsor
shall either (a) cure such breach in all material respects, (b) repurchase such
Mortgage Loan or any property acquired in respect thereof from the Trustee at
the Purchase Price or (c) within the two year period following the Closing Date,
substitute a Replacement Mortgage Loan for the affected Mortgage Loan. In the
event of discovery of a breach of any representation and warranty of the Sponsor
or the Depositor, the Trustee shall enforce its rights under the Sale Agreement
or thereunder for the benefit of Certificateholders. In the event of a breach of
the representations and warranties with respect to the Mortgage Loans set forth
in a Sale Agreement, the Trustee shall enforce the right of the Issuing Entity
to be indemnified for such breach of representation and warranty. In the event
that such breach relates solely to the unenforceability of a prepayment charge,
amounts received in respect of such indemnity up to the amount of such
prepayment charge shall be distributed pursuant to Section 4.04(b)(i)(B). As
provided in the Sale Agreement, if the Sponsor substitutes for a Mortgage Loan
for which there is a breach of any representations and warranties which
adversely and materially affects the value of such Mortgage Loan and such
substitute mortgage loan is not a Replacement Mortgage Loan, under the terms of
the Sale Agreement, the Sponsor 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 Sponsor indemnifies and holds the Issuing Entity, the Trustee, the
Depositor, the Servicer and each Certificateholder harmless against any and all
taxes, claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Issuing Entity, the Trustee, the Depositor, the Servicer and any
Certificateholder may sustain in connection with any actions of the Sponsor
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 Issuing Entity
or any REMIC provided for herein, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup day" under Section 860G(d)(1) of the Code, or
(ii) any REMIC created hereunder to fail to qualify as a REMIC at any time that
any Certificate is outstanding.

     With respect to any Mortgage Loan repurchased by the Depositor pursuant to
this Agreement or by the Sponsor pursuant to the Sale Agreement, the principal
portion of the funds received by the Servicer in respect of such repurchase of a
Mortgage Loan will be considered a Principal Prepayment and shall be deposited
by the Servicer in the Certificate Account pursuant to Section 3.05. The
Trustee, upon receipt of the full amount of the Purchase Price for a Deleted
Mortgage Loan, or upon receipt of the Mortgage File for a Replacement Mortgage
Loan substituted for a Deleted Mortgage Loan, shall release or cause to be
released and reassign to the Depositor or the Sponsor, 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.

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

     For any month in which the Sponsor substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Sponsor 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") shall be delivered by the Sponsor 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.

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

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

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

     SECTION 2.04. Representations and Warranties of the Servicer.

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

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

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

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

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

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

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

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

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

     Upon discovery by the Depositor, the Servicer or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party discovering such fact shall promptly
(and in any event within five (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 Loan within ninety (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.

     SECTION 2.07. REMIC Elections.

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

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

     The SWAP 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 SWAP REMIC and the interests
issued by the Lower Tier REMIC, (iii) the grantor trusts described in Section
2.07 hereof, (iv) each Cap Contract and the Cap Contract Account and (v) the
Swap Agreement and the Supplemental Interest Trust. The SWAP REMIC shall issue
the SWAP REMIC Regular Interests, which shall be designated as regular interests
of such REMIC, and shall issue the Class SWR

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Interest, which shall be designated as the sole class of residual interest in
the SWAP REMIC. Each of the SWAP REMIC Regular Interests shall have the
characteristics set forth in the Preliminary Statement and this Section 2.07.

     The Lower Tier REMIC shall consist of the SWAP REMIC Regular Interests. 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, which 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 and the Preliminary Statement.

     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 the Class UT-IO Interest) and on
the sole class of residual interest in the Upper Tier REMIC shall be subject to
a cap equal to the Upper Tier REMIC Net WAC Cap.

     The beneficial ownership of the Class SWR Interest, the Class LTR Interest
and the Residual Interest shall be represented by the Class R Certificate. The
Class SWR Interest and 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 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 such 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) (i) It is intended that the rights of the Class A Certificates, Class R
Certificate, Class M Certificates 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
the Class A Certificates, Class R Certificate, Class M Certificates 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 Certificates, Class M Certificates and Class B Certificates and the
residual interest in the Upper Tier REMIC held by the holder of the Class R
Certificate. 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 Certificates, Class R Certificate, Class M Certificates and
Class B Certificates receive payments in respect of Excess Interest, such
amounts, to the extent not derived from payments on the Cap Contracts or the
Swap Agreement, 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(f) and then paid to the relevant Class of Certificates pursuant to the
related interest rate cap agreement.

          (ii) It is intended that the beneficial owners of the Certificates
(other than the Class P and Class C Certificates) shall be treated as having
entered into a notional principal contract with respect to the beneficial owners
of the Class C Certificates. Pursuant to each such notional principal contract,
all beneficial owners of each Class of Certificates (other than the Class P and
Class C Certificates) shall be treated as having agreed to pay, on each
Distribution Date, to the beneficial owners of the Class C

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Certificates an aggregate amount equal to the excess, if any, of (i) the amount
payable on such Distribution Date on the Corresponding REMIC Regular Interest of
such Class of Certificates over (ii) the amount payable on such Class of
Certificates on such Distribution Date (such excess, a "Class Payment
Shortfall"). A Class Payment Shortfall shall be allocated to each Class of
Certificates to the extent that interest accrued on such Class for the related
Accrual Period at the Pass-Through Rate for a Class, computed by substituting
"Upper Tier REMIC Net WAC Cap" for the Available Funds Cap set forth in the
definition thereof, exceeds the amount of interest accrued on such Certificate
at the Pass-Through Rate (without such substitution) for the related Accrual
Period, and a Class Payment Shortfall payable from principal collections shall
be allocated to the most subordinate Class of Certificates with an outstanding
principal balance to the extent of such balance.

     (e) The parties intend that the portion of the Trust Fund consisting of the
Uncertificated Class C Interest, the uncertificated Class UT-IO Interest, the
rights to receive payments deemed made by the Class A, Class R, Class M and
Class B Certificates in respect of notional principal contracts described in
Section 2.07(d)(ii), the Cap Contract Account, the Cap Contracts, the
Supplemental Interest Trust that holds the Swap Agreement 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 Certificates, Class R Certificate, Class
M Certificates 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 Certificates, Class R
Certificate, Class M Certificates, Class B Certificates 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 the payments 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) The parties intend that amounts paid to the Swap Counterparty under the
Swap Agreement shall be deemed for federal income tax purposes to be paid by the
Class C Certificates first, out of funds deemed received in respect of the Class
UT-IO Interest, second, out of funds deemed received in respect of the
Uncertificated Class C Interest and third, out of funds deemed received in
respect of notional principal contracts described in Section 2.07(d)(ii), and
the provisions hereof shall be interpreted consistently with this intention. On
each Distribution Date, to the extent that amounts paid to the Swap Counterparty
are deemed paid out of funds received in respect of the Uncertificated Class C
Interest, such amounts 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(f) and then paid to the Swap Counterparty pursuant to the Swap Agreement.

          The Supplemental Interest Trust shall be an "outside reserve fund" for
federal income tax purposes and not an asset of any REMIC. Furthermore, the
Holders of the Class C Certificates shall be

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the beneficial owners of the Supplemental Interest Trust for all federal income
tax purposes, and shall be taxable on all income earned thereon.

     (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 by the SWAP REMIC
with respect to the Mortgage Loans shall be paid to the SWAP REMIC 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
available funds remaining in the SWAP REMIC on a Distribution Date after
distributions to the SWAP REMIC Regular Interests shall be distributed to the
Class R Certificates on account of the Class SWR Interest. On each Distribution
Date, the Trustee shall distribute the aggregate Interest Funds (net of expenses
and payments to the Class P Certificates) with respect to each of the SWAP REMIC
Regular Interests based on the interest rates for each such SWAP REMIC Regular
Interest. On each Distribution Date, the Trustee shall distribute the aggregate
Principal Funds with respect to the Group One Mortgage Loans first to the Class
1-SW1 Interest until its principal balance is reduced to zero and then
sequentially to each of the other SWAP REMIC Regular Interests beginning with
designation "1" in ascending order of their numerical class designation, in
equal amounts to each such class in such numerical designation, until the
principal balance of each such class is reduced to zero. All losses with respect
to the Group One Mortgage Loans shall be allocated among the SWAP REMIC Regular
Interests beginning with the designation "1" in the same manner that principal
distributions are allocated. On each Distribution Date, the Trustee shall
distribute the aggregate Principal Funds with respect to the Group Two Mortgage
Loans first to the Class 2-SW2 Interest until its principal balance is reduced
to zero and then sequentially to each of the other SWAP REMIC Regular Interests
beginning with designation "2" in ascending order of their numerical class
designation, in equal amounts to each such class in such numerical designation,
until the principal balance of each such class is reduced to zero. All losses
with respect to the Group Two Mortgage Loans shall be allocated among the SWAP
REMIC Regular Interests beginning with the designation "2" in the same manner
that principal distributions are allocated. Subsequent Recoveries with respect
to the Group One and Group Two Mortgage Loans shall be allocated in the reverse
fashion from the manner in which losses are allocated.

          All payments received by the Lower Tier REMIC with respect to the SWAP
REMIC Regular Interests shall be paid to the Lower Tier REMIC 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 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 Subordinate
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

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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 Subordinate 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 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.

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     (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 Trustee and the
Issuing Entity against any and all Losses resulting from such negligence;
provided, however, that the Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Trustee, the Depositor or the
Holder of the Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of the Class R Certificate
on which the Servicer has relied. The foregoing shall not be deemed to limit or
restrict the rights and remedies of the Holder of the Class R Certificate now or
hereafter existing at law or in equity. Notwithstanding the foregoing, however,
in no event shall the Servicer have any liability (1) for any action or omission
that is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than 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 Issuing Entity
against any and all Losses resulting from such negligence; provided, however,
that the Trustee shall not be liable for any such Losses attributable to the
action or inaction of the Servicer, the Depositor or the Holder of the Class R
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of the Class R Certificate on which the
Trustee has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of the Class R Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Trustee have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than those arising out of a negligent performance by the Trustee of its
duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).

     SECTION 2.08. Covenants of the Servicer.

     The Servicer hereby covenants to each of the other parties to this
Agreement that 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.

     SECTION 2.09. [RESERVED]

     SECTION 2.10. [RESERVED]

     SECTION 2.11. Permitted Activities of the Issuing Entity. The Issuing
Entity 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 Issuing Entity, the Cap
Contracts, and to execute and deliver on behalf of the Issuing Entity, and to
perform the duties and obligations of the Issuing Entity under any agreement or
instrument related to the Cap Contracts, in each case in such form as the
Depositor shall direct or shall approve in writing, the execution and delivery
of any such agreement by the Depositor to be conclusive evidence of its approval
thereof. In addition, the Supplemental Interest Trust Trustee is hereby
authorized and directed to execute and deliver, on behalf of the Supplemental
Interest Trust, the Swap Agreement, and to execute and deliver on behalf of the
Issuing Entity, and to

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perform the duties and obligations of the Supplemental Interest Trust under any
agreement or instrument related to the Swap Agreement, in each case in such form
as the Depositor shall direct or shall approve in writing, the execution and
delivery of any such agreement by the Depositor to be conclusive evidence of its
approval thereof.

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

     SECTION 2.13. Depositor Notification of NIM Notes. The Depositor shall
notify the Servicer and the Trustee if and when any NIM Notes are issued and
when such NIM Notes are no longer outstanding.

                                   ARTICLE III
                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

     SECTION 3.01. Servicer to Service Mortgage Loans.

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

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<PAGE>

it by the Servicer that are necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties under this Agreement. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Servicer. The Trustee shall have no liability
with respect to any misuse of such power of attorney, to the extent such use by
the Servicer is outside the authorization provided for in the power of attorney,
and shall be indemnified by the Servicer for any costs, liabilities or expenses
incurred by the Trustee in connection therewith.

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

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

     The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Fannie Mae Guide Announcement 97-02 and 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 and
other comparable instruments with respect to such assignment 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

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     (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 and (ii) that
such agreement would not result in a withdrawal or downgrading by any Rating
Agency of the ratings of any Certificates evidenced by a letter to that effect
delivered by each Rating Agency to the Depositor. Notwithstanding the provisions
of any subservicing agreement, any of the provisions of this Agreement relating
to agreements or arrangements between the Servicer and a subservicer or
reference to actions taken through a subservicer or otherwise, the Servicer
shall remain obligated and liable to the Depositor, the Trustee and the
Certificateholders for the servicing and administration of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. Every subservicing
agreement entered into by the Servicer shall contain a provision giving any
successor servicer the option to terminate such agreement 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 Trustee copies of all subservicing
agreements.

     (b) The Servicer may enter into a special servicing advisory agreement with
a holder of the Class R Certificate and/or one or more other class of
Subordinate Certificates issued by the Issuing Entity or of a net interest
margin trust holding certificates issued by the Issuing Entity and/or an advisor
designated by such holder. Pursuant to such agreement, the Servicer may provide
such holder or advisor, in its capacity as special servicing advisor, with
loan-level information with respect to the Mortgage Loans, and such holder or
the special servicing advisor designated by such holder may advise the Servicer
with regards to efforts to maximize recoveries with respect to such Mortgage
Loans, including without limitation the commencement of foreclosure proceedings
or other actions.

     (c) 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.

     (d) The Servicer shall not permit a Subservicer to perform any servicing
responsibilities hereunder with respect to the Mortgage Loans unless that
Subservicer first agrees in writing with the Servicer to deliver an Assessment
of Compliance and an Accountant's Attestation in such manner and at such times
that permits that Servicer to comply with Section 3.17 of this Agreement.

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

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

     SECTION 3.04. Trustee to Act as Servicer.

     In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its designee shall, within a period of time not to exceed ninety (90) days from
the date of notice of termination or resignation, thereupon assume all of the
rights and obligations of the Servicer hereunder arising thereafter except that
the Trustee shall not be (i) liable for losses of the Servicer pursuant to
Section 3.10 hereof or any acts or omissions of such predecessor Servicer
hereunder, (ii) obligated to make Advances or Servicing Advances if it is
prohibited from doing so by applicable law, (iii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder, including pursuant to
Section 2.02, 2.03 or 2.05 hereof, (iv) responsible for any expenses of the
Servicer pursuant to Section 2.03 or (v) deemed to have made any representations
and warranties hereunder, including pursuant to Section 2.04 or the first
paragraph of Section 6.02 hereof; provided, however that the Trustee (subject to
clause (ii) above) or its designee, in its capacity as the successor servicer,
shall immediately assume the terminated or resigning Servicer's obligation to
make Advances and Servicing Advances. No such termination shall affect any
obligation of the Servicer to pay amounts owed under this Agreement and to
perform its duties under this Agreement until its successor assumes all of its
rights and obligations hereunder. If the Servicer shall for any reason no longer
be the Servicer (including by reason of any Event of Default), the Trustee (or
any other successor servicer) may, at its option, succeed to any rights and
obligations of the Servicer under any subservicing agreement in accordance with
the terms thereof; provided, however, that the Trustee (or any other successor
servicer) shall not incur any liability or have any obligations in its capacity
as servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to assume such obligations of the Servicer
thereunder; and the Servicer shall not thereby be relieved of any liability or
obligations under the subservicing agreement arising prior to the date of such
succession. To the extent any costs or expenses, including without limitation
Servicing Transfer Costs incurred by the Trustee in connection with this Section
3.04 are not paid by the Servicer pursuant to this Agreement within thirty (30)
days of the date of the Trustee's invoice therefor, such amounts shall be
payable out of the Certificate Account; provided that the terminated Servicer
shall reimburse the Issuing Entity for any such expense incurred by the Issuing
Entity upon receipt of a reasonably detailed invoice evidencing such expenses.
If the Trustee is unwilling or unable to act as servicer, the Trustee shall seek
to appoint a successor servicer that is eligible in accordance with the criteria
specified in Section 7.03 of this Agreement.

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

     In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of any Event of Default),
notwithstanding anything to the contrary above, the Trustee and the Depositor
hereby agree that within ten (10) Business Days or delivery to the Trustee by
the Servicing Rights Pledgee of a letter signed by the Servicer whereby the
Servicer shall resign as Servicer under this Agreement, the Servicing Rights
Pledgee or its designee shall be appointed as successor servicer (provided that
at the time of such appointment the Servicing Rights Pledgee or such designee
meets the requirements of a successor servicer set forth above) and the
Servicing Rights Pledgee agrees to be subject to the terms of this Agreement.

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

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

     (b) The Servicer will not waive any prepayment 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) the prepayment of the
Mortgage Loan is made in connection with the involuntary sale of the related
Mortgaged Property, or (iv) in the Servicer's reasonable judgment as described
in Section 3.01 hereof, (x) such waiver relates to a default or a reasonably
foreseeable default and (y) such waiver would maximize recovery of total
proceeds taking into account the value of such prepayment charge and related
Mortgage Loan, or (v) the collection of such prepayment charge or portion
thereof, or of a similar type of prepayment charge, 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, only to the
extent that there are no NIM Notes outstanding or to the extent that the
Depositor has notified the Servicer in writing that all previously issued NIM
Notes are no longer outstanding, there is a certificated class action in which a
similar type of prepayment charge is being challenged, or (vi) if sufficient
information is not made available to enable it to collect the prepayment charge.
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

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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 (2)
Business Days of receipt thereof, in immediately available funds, the following
payments and collections received or made by it on and after the Cut-off Date
with respect to the Mortgage Loans:

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

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

          (iii) all Liquidation Proceeds, other than proceeds to be applied to
     the restoration or repair of the Mortgaged Property or released to either
     the Mortgagor or the holder of a senior lien on the Mortgaged Property 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(g) 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) the Purchase Price and any Substitution Adjustment Amount;

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

          (x) all prepayment charges; and

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

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

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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.

     (e) [Reserved]

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

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

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

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

     Any amounts received by the Trustee prior to 2:30 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, may be invested in Permitted Investments on the Business Day on
which they were received. The foregoing requirements for remittance by the
Servicer and deposit by the Servicer into the Certificate Account shall be
exclusive. In the event that the Servicer shall remit any amount not required to
be remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time withdraw such amount from the Certificate Account,
any provision herein to the contrary notwithstanding. All funds deposited in the
Certificate Account shall be held by the Trustee in trust for the
Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Certificate Account at the direction of the
Servicer.

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

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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.

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

     To the extent required by a 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 and assessments and insurance premiums) and
3.10 hereof (with respect to hazard insurance), to refund to any Mortgagors any
sums as may be determined to be overages, to pay interest, if required by law or
the terms of the related Mortgage or Mortgage Note, to Mortgagors on balances in
the Escrow Account or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 9.01 hereof. The Escrow
Accounts shall not be a part of the Trust Fund.

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

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

     The Servicer may from time to time provide the Depositor, and any person
designated by the Depositor, with reports and information regarding the Mortgage
Loans, including without limitation, information requested by the Depositor or
an originator of the Mortgage Loans for required institutional risk control. In
addition, subject to limitations of applicable privacy laws, the Servicer may
make public information regarding performance of the Mortgage Loans.

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

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

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

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

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

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

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

          (vi) to pay to the Servicer any unpaid Servicing Fees and to reimburse
     it for any unreimbursed Servicing Advances, 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 and including any Subsequent
     Recoveries related to any liquidated Mortgage Loan) that represent late
     recoveries of the payments for which such advances were made pursuant to
     Section 3.01 or Section 3.06;

          (vii) to pay to the Servicer any unpaid Servicing Fees for any
     Mortgage Loan upon such Mortgage Loan being charged off and upon
     termination of the obligations of the Servicer;

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

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

          (x) to reimburse the Trustee for enforcement expenses reasonably
     incurred in respect of a breach or defect giving rise to the purchase
     obligation in Section 2.03 that were incurred in the Purchase Price of the
     Mortgage Loans including any expenses arising out of the enforcement of the
     purchase obligation; provided that any such expenses will be reimbursable
     under this subclause (x) only if 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;

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

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

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

     In addition, no later than 2:30 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 (for this purpose only,
neither Interest Funds nor Principal Funds shall include a deduction for any
amount reimbursable to the Trustee unless such amounts have actually been
reimbursed from such funds), to the extent on deposit, and such amount shall be
deposited in the Certificate Account.

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

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

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

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

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

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

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

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

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     SECTION 3.09. [RESERVED]

     SECTION 3.10. Maintenance of Hazard Insurance.

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

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

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

     (a) Except as otherwise provided in this Section 3.11(a), when any property
subject to a Mortgage has been or is about to be conveyed by the Mortgagor, the
Servicer shall to the extent that it has knowledge of such conveyance or
prospective conveyance, enforce any due-on-sale clause contained in

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any Mortgage Note or Mortgage, but only to the extent that such enforcement will
not adversely affect or jeopardize coverage under any Required Insurance Policy;
provided, however, that the Servicer shall not exercise any such right if the
due-on-sale clause, in the reasonable belief of the Servicer, is not enforceable
under applicable law. An Opinion of Counsel, which shall be reimbursable as a
Servicing Advance to the extent provided in Section 3.08(a)(ii) hereof,
delivered to the Trustee and the Depositor to the foregoing shall conclusively
establish the reasonableness of such belief, but which shall not be required. In
addition to the foregoing, the Servicer shall not be required to enforce any
"due-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 interest of the Certificateholders. In the event that the
Servicer is prohibited by law from enforcing any such due-on-sale clause, or if
coverage under any Required Insurance Policy would be adversely affected, or if
nonenforcement is otherwise permitted hereunder, the Servicer is authorized,
subject to Section 3.11(b), to take or enter into an assumption and modification
agreement from or with the Person to whom such property has been or is about to
be conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and, unless prohibited by applicable law, the Mortgagor remains liable
thereon, provided that the Mortgage Loan shall continue to be covered (if so
covered before the Servicer enters such agreement) by the applicable Required
Insurance Policies. The Servicer, subject to Section 3.11(b), is also authorized
with the prior approval of the insurers under any Required Insurance Policies to
enter into a substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Servicer shall not be deemed to be in default
under this Section 3.11(a) by reason of any transfer or assumption that the
Servicer reasonably believes it is restricted by law from preventing.

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

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

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

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

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

     In the event that the Issuing Entity acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
the expiration of three years from the end of the year of its acquisition by the
Issuing Entity or, at the expense of the Issuing Entity, obtain more than sixty
(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 shall
have been supplied with an Opinion of Counsel addressed to the Trustee (such
Opinion of Counsel not to be an expense of the Trustee) to the effect that the
holding by the Issuing Entity of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of the Issuing Entity 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 Issuing Entity may continue to hold such
Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel). Notwithstanding

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any other provision of this Agreement, no Mortgaged Property acquired by the
Issuing Entity 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 Issuing
Entity in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or (ii) subject the Issuing Entity or
any REMIC provided for herein to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under section
860G(c) of the Code or otherwise, unless the Servicer or the Depositor has
agreed to indemnify and hold harmless the Issuing Entity 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 unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the Collection Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.

     Notwithstanding the foregoing provisions of this Section 3.12 or any other
provision of this Agreement, with respect to any Mortgage Loan as to which the
assistant vice president for foreclosures or the vice president of default
management of the Servicer has actual knowledge (which shall not be presumed due
to any documents received by the Servicer) of, the presence of any toxic or
hazardous substance on the related Mortgaged Property, the Servicer shall not,
on behalf of the Trustee, either (i) obtain title to such Mortgaged Property as
a result of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire
possession of, or take any other action with respect to, such Mortgaged
Property, if, as a result of any such action, the Trustee, the Issuing Entity or
the Certificateholders would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Servicer believes, based on its reasonable
judgment and a report prepared by a Person who regularly conducts environmental
audits using customary industry standards, that:

     (1) such Mortgaged Property is in material compliance with applicable
environmental laws or, if not, that it would be in the best economic interest of
the Issuing Entity to take such actions as are necessary to bring the Mortgaged
Property into compliance therewith; and

     (2) it is probable that there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based materials
for which additional investigation, testing, monitoring, containment, clean-up
or remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such action
could be required, that it would be in the best economic interest of the Issuing
Entity to take such actions with respect to the affected Mortgaged Property.

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     The Servicer shall forward a copy of the environmental audit report to the
Depositor and the Trustee. The cost of the environmental audit report
contemplated by this Section 3.12 shall be advanced by the Servicer, subject to
the Servicer's right to be reimbursed therefor from the Collection Account, such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the Collection Account received in respect of the affected
Mortgage Loan or other Mortgage Loans.

     If the Servicer determines, as described above, that it is in the best
economic interest of the Issuing Entity to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes or
petroleum-based materials affecting any such Mortgaged Property, then the
Servicer may take such action as it deems to be in the best economic interest of
the Issuing Entity; provided that any amounts disbursed by the Servicer pursuant
to this Section 3.12 shall constitute Advances. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Collection Account,
such right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the Collection Account received in respect of the affected
Mortgage Loan or other Mortgage Loans. If the Servicer decides not to take such
action, it may not obtain title to such Mortgaged Property.

     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 Net Mortgage Rate to the Due
Date occurring in the month in which such amounts are required to be
distributed; 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; and 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) The Servicer, in its sole discretion, shall have the right to elect (by
written notice in the form of an Officer's Certificate sent to the Trustee,
which Officer's Certificate shall (i) set forth the affected Mortgage Loan or
REO Property and the Purchase Price, (ii) certify that the Purchase Price has
been deposited into the Collection Account and (iii) confirm that the purchase
complies in all respect with this Section 3.12(c)) to purchase for its own
account from the Issuing Entity any Mortgage Loan that is ninety-one (91) days
or more Delinquent or REO Property for which the Servicer has accepted a
deed-in-lieu of foreclosure at a price equal to the Purchase Price. The Purchase
Price for any Mortgage Loan or REO Property purchased hereunder shall thereafter
be delivered to the Trustee for deposit in the

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Certificate Account and the Trustee, upon receipt of such deposit and a Request
for Release from the Depositor in the form of Exhibit I hereto, shall release or
cause to be released to the Servicer the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment prepared by the Servicer,
in each case without recourse, representation or warranty, as shall be necessary
to vest in the Servicer any Mortgage Loan or REO Property released pursuant
hereto and the Servicer shall succeed to all the Trustee's right, title and
interest in and to such Mortgage Loan and all security and documents related
thereto. Such assignment shall be an assignment outright and not for security.
The Servicer shall thereupon own such Mortgage Loan or REO Property, and all
security and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto. The Servicer shall not use any
procedure in selecting Mortgage Loans to be repurchased that is materially
adverse to the interests of the Certificateholders.

     In the event that the Servicer is acting as the servicer and the Servicer
(or an Affiliate of the Servicer) is the owner of more than 50% of the Class of
Certificates which is then currently in a first loss position and such party is
deemed to be the "Primary Beneficiary" as defined in FIN 46R, the provisions of
the preceding paragraph shall not apply and the Servicer (or an Affiliate of the
Servicer), in its sole discretion, shall have the right to elect (by written
notice in the form of an Officer's Certificate sent to the Trustee, which
Officer's Certificate shall (i) set forth the affected Mortgage Loan or REO
Property and the Purchase Price, (ii) certify that the Purchase Price has been
deposited into the Collection Account and (iii) confirm that the purchase
complies in all respect with this Section 3.12(c)) to purchase for its own
account from the Issuing Entity any Mortgage Loan that is 120 days or more
Delinquent or REO Property for which the Servicer has accepted a deed-in-lieu of
foreclosure, during the period commencing on the first day of the calendar
quarter succeeding the calendar quarter in which the Initial Delinquency Date
(as defined below) occurred with respect to such Mortgage Loan and ending on the
last Business Day of such calendar quarter. If the Servicer (or an Affiliate of
the Servicer) does not exercise its purchase right with respect to a Mortgage
Loan during the period specified in the preceding sentence, such Mortgage Loan
shall thereafter again become eligible for purchase pursuant to the preceding
sentence only after the Mortgage Loan ceases to be 120 days or more Delinquent
and thereafter becomes 120 days Delinquent again. The "Initial Delinquency Date"
of a Mortgage Loan shall mean the date on which the Mortgage Loan first became
120 days Delinquent. Prior to repurchase pursuant to this Section 3.12(c), the
Servicer shall be required to continue to make monthly advances pursuant to
Section 4.01. The Servicer shall not use any procedure in selecting Mortgage
Loans to be repurchased which is materially adverse to the interests of the
Certificateholders. The Servicer shall purchase any Mortgage Loan or REO
Property pursuant to this paragraph at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan or REO Property purchased hereunder shall
be delivered to the Trustee for deposit in the Certificate Account and the
Trustee, upon receipt of such deposit and a Request for Release from the
Depositor in the form of Exhibit I hereto, shall release or cause to be released
to the Servicer the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the Servicer, in each case
without recourse, representation or warranty, as shall be necessary to vest in
the Servicer any Mortgage Loan or REO Property released pursuant hereto and the
Servicer shall succeed to all the Trustee's right, title and interest in and to
such Mortgage Loan and all security and documents related thereto. The
provisions in this paragraph shall only apply if Wilshire Credit Corporation is
the servicer.

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

     Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of such request, the Trustee or its designee shall
promptly release the related Mortgage File to the Servicer, and the Trustee or
its designee shall at the Servicer's written direction execute and deliver to
the Servicer the request for reconveyance, deed of reconveyance or release or

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satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Servicer, together with the Mortgage Note with
written evidence of cancellation thereon. 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.

     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 make reasonable efforts to release the related Mortgage
File(s) within three (3) Business Days of receipt of a properly completed
Request for Release pursuant to clauses (i), (ii) or (iii) above and shall so
release within four (4) Business Days. Receipt of a properly completed Request
for Release (including any Request for Release delivered in an electronic format
pursuant to (iii) above) 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 within four (4)
Business Days after its receipt of a Request for Release, the Trustee or its
designee, shall be liable for such penalties or damages directly caused by it
and shall have no liability for penalties or damages attributable to the
Servicer's actions or inactions.

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

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Certificate of a Servicing Officer certifying as to the name and address of the
Person to which the Mortgage File or the documents therein were delivered and
the purpose or purposes of such delivery.

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

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

     SECTION 3.15. Servicing Compensation.

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

     Additional servicing compensation in the form of any Excess Proceeds,
Prepayment Interest Excess, late payment fees, assumption fees (i.e. fees
related to the assumption of a Mortgage Loan upon the purchase of the related
Mortgaged Property) and similar fees payable by the Mortgagor, all income and
gain net of any losses realized from Permitted Investments in the Collection
Account, and other benefits arising from the Collection Account or Escrow
Account shall be retained by the Servicer to the extent not required to be
deposited in the Collection Account pursuant to Section 3.05 or 3.12(a) hereof
or the Escrow Account pursuant to Section 3.06 hereof. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including payment of any premiums for hazard insurance, as
required by Section 3.10 hereof and maintenance of the other forms of insurance
coverage required by Section 3.10 hereof) and shall not be entitled to
reimbursement therefor except as specifically provided in Sections 3.08 and 3.12
hereof.

     SECTION 3.16. Access to Certain Documentation.

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

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     SECTION 3.17. Annual Statement as to Compliance.

     Not later than (a) March 12 of each calendar year (other than the calendar
year during which the Closing Date occurs) or (b) with respect to any calendar
year during which an annual report on Form 10-K is not required to be filed
pursuant to Section 3.20 on behalf of the Issuing Entity, by April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer shall deliver to the Trustee and the Depositor an
Officer's Certificate in the form attached hereto as Exhibit T stating, as to
each signatory thereof, that (i) a review of the activities of the Servicer
during the preceding calendar year and of the performance of the Servicer under
this Agreement has been made under such officer's supervision, and (ii) to the
best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement in all material respects
throughout such year or a portion thereof, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof. With respect to
any Subservicer that meets the criteria of Item 1108(a)(2)(i) through (iii) of
Regulation AB, the Servicer shall deliver, on behalf of that Subservicer, the
Officer's Certificate set forth in this Section 3.17 as and when required with
respect to such Subservicer.

     SECTION 3.18. Assessment of Compliance; Accountant's Attestation.

     (a) Not later than (i) March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, by April 15 of
each calendar year (or if such day is not a Business Day, the immediately
succeeding Business Day), the Servicer, at its own expense, shall deliver to the
Trustee and the Depositor an officer's assessment of its compliance with the
Servicing Criteria during the preceding calendar year as required by Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB (the
"Assessment of Compliance"), which assessment shall be substantially in the form
of Exhibit Q hereto.

     (b) Not later than (i) March 12 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer, at its own expense, shall cause a nationally or
regionally recognized firm of independent registered public accountants (who may
also render other services to any Servicer, the Sponsor or any Affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Trustee and the Depositor that attests
to and reports on the Assessment of Compliance provided by such Servicer
pursuant to Section 3.18(a) (the "Accountant's Attestation"). Such Accountant's
Attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act.

     (c) The Servicer shall deliver on behalf of any Subservicer and each
Subcontractor (unless, in the case of any Subcontractor, the Depositor has
notified the Servicer and the Trustee in writing that such compliance statement
is not required by Regulation AB) not later than March 12 of each calendar year
(other than the calendar year during which the Closing Date occurs) with respect
to any calendar year during which the Issuing Entity's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, to the Trustee and the Depositor an
Assessment of Compliance, which assessment shall be substantially in the form of
Exhibit Q hereto. The Servicer shall deliver on behalf of any Subservicer (other
than the calendar year during which the Closing Date occurs) with respect to any
calendar year during which the Issuing Entity's annual report on Form 10-K is
not required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, by April 15 of each calendar year (or, in each
case, if such day is not a

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Business Day, the immediately succeeding Business Day) to the Trustee and the
Depositor an Assessment of Compliance, which assessment shall be substantially
in the form of Exhibit Q hereto.

     (d) Not later than March 12 of each calendar year (other than the calendar
year during which the Closing Date occurs) with respect to any calendar year
during which the Issuing Entity's annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of the
Commission, the Servicer shall cause each Subservicer and each Subcontractor
(unless, in the case of any Subcontractor, the Depositor has notified the
Trustee and Servicer in writing that such compliance statement is not required
by Regulation AB) to deliver to the Trustee and the Depositor an Accountant's
Attestation by a registered public accounting firm that attests to, and reports
on, the Assessment of Compliance pursuant to Section 3.18(c) above. Other than
the calendar year during which the Closing Date occurs, with respect to any
calendar year during which the Issuing Entity's annual report on Form 10-K is
not required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, not later than April 15 of each calendar year
(or, in each case, if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer shall cause each Subservicer to deliver to the
Trustee and the Depositor an Accountant's Attestation by a registered public
accounting firm that attests to, and reports on, the Assessment of Compliance
pursuant to Section 3.18(c) above.

     (e) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, March 15 (or, in each case, if such day is not a Business Day, the
immediately succeeding Business Day), the Trustee shall deliver to the Depositor
and the Servicer an Assessment of Compliance with regard to the Servicing
Criteria applicable to the Trustee during the preceding calendar year, which
assessment shall be substantially in the form of Exhibit Q hereto.

     (f) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, March 15 (or, in each case, if such day is not a Business Day, the
immediately succeeding Business Day), the Trustee shall deliver to the Depositor
and the Servicer an Accountant's Attestation by a registered public accounting
firm that attests to, and reports on, the Assessment of Compliance pursuant to
Section 3.18(e) above.

     (g) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, fifteen (15) calendar days before the date on which the Issuing
Entity's annual report on Form 10-K with respect to the transactions
contemplated by this Agreement is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission (or, in each case,
if such day is not a Business Day, the immediately preceding Business Day), the
Depositor shall cause each custodian, if any, to deliver to the Depositor, the
Servicer and the Trustee an Assessment of Compliance with regard to the
Servicing Criteria applicable to such custodian during the preceding calendar
year, which assessment shall be substantially in the form of Exhibit Q hereto.

     (h) Not later than March 12 (or, in each case, if such day is not a
Business Day, the immediately succeeding Business Day), of any calendar year
(other than the calendar year during which the Closing Date occurs) during which
the Issuing Entity's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, the Depositor shall cause each custodian, if any, to deliver to the
Depositor, the Servicer and the Trustee an Accountant's Attestation by a
registered public accounting firm that attests to, and reports on, the
Assessment of Compliance pursuant to Section 3.18(g) above.

     (i) [Reserved]

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     (j) [Reserved]

     (k) The Depositor agrees to cause the custodian, if any, to indemnify and
hold harmless the Trustee and the Servicer and each Person, if any, who
"controls" the Trustee or the Servicer within the meaning of the Securities Act
and its officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses that such Person may sustain
arising out of third party claims based on (i) the failure of the custodian, if
any, to deliver when required any information required of it pursuant to Section
3.18 or 3.20 or (ii) any material misstatement or omission contained in any
information provided on its behalf pursuant to Section 3.18 or 3.20.

     (l) Copies of such Assessments of Compliance and Accountant's Attestations
shall be available on the Trustee's website http://www.usbank.com/abs to any
Certificateholder, provided such statement is delivered to the Trustee. The
initial Assessments of Compliance and Accountant's Attestations required
pursuant to this Section 3.18 shall be delivered to the Trustee and the
Depositor, as applicable, by each party no later than March 12, 2007. The
Trustee will post such copies on the Trustee's website within five (5) Business
Days after filing with the Commission. This requirement will be satisfied to the
extent that the Issuing Entity's Form 10-K is available on such website.

     (m) Each of the parties hereto acknowledges and agrees that the purpose of
this Section 3.18 is to facilitate compliance by the Sponsor and the Depositor
with the provisions of Regulation AB, as such may be amended or clarified from
time to time. Therefore, each of the parties agrees that the parties'
obligations hereunder will be supplemented and modified as necessary to be
consistent with any such amendments, interpretive advice or guidance, convention
or consensus among active participants in the asset-backed securities markets,
advice of counsel, or otherwise in respect of the requirements of Regulation AB
and the parties shall comply with requests made by the Sponsor or the Depositor
for delivery of additional or different information as the Sponsor or the
Depositor may determine in good faith is necessary to comply with the provisions
of Regulation AB, provided that such information is available to such party
without unreasonable effort or expense and within such timeframe as may be
reasonably requested. Any such supplementation or modification shall be made in
accordance with Section 10.01 without the consent of the Certificateholders, and
may result in a change in the reports filed by the Trustee on behalf of the
Issuing Entity under the Exchange Act.

     SECTION 3.19. Subordination Liens.

     In connection with any governmental program under which a Mortgagor may
obtain a benefit in the event the related Mortgaged Property is subject to a
disaster provided that the Mortgagor files a covenant or other lien against the
Mortgaged Property and is required to obtain the subordination thereto of the
Mortgage, the Servicer may cause such subordination to be executed and filed
provided that either (i) the related Mortgage Loan is in default or default with
respect to such Mortgage Loan is imminent or (ii) such subordination and
participation in such governmental program will not result in a change in
payment expectations with respect to such Mortgage Loan. For purposes of the
preceding sentence, a change in payment expectations occurs if, as a result of
such subordination and participation in such governmental program, (1) there is
a substantial enhancement of the Mortgagor's capacity to meet the payment
obligations under the Mortgage Loan and that capacity was primarily speculative
prior to such subordination and participation in such governmental program and
is adequate after such subordination and participation in such governmental
program or (2) there is a substantial impairment of the Mortgagor's capacity to
meet the payment obligations under the Mortgage Loan and that capacity was
adequate prior to such subordination and participation in such governmental
program and is primarily speculative after such subordination and participation
in such governmental program. The preceding

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sentence and clause (ii) of the second preceding sentence are intended to comply
with Treasury Regulations Section 1.1001-3(e)(4) and shall be interpreted in
accordance therewith.

     SECTION 3.20. Periodic Filings.

     As set forth on Schedule V hereto, for so long as the Issuing Entity is
subject to the Exchange Act reporting requirements, no later than the end of
business on the second Business Day after the occurrence of an event requiring
disclosure on Form 8-K (a "reportable event"), the Depositor, the Sponsor or the
Servicer, as applicable, shall have (i) timely notified the Trustee of an item
reportable on a Form 8-K (unless such item is specific to the Trustee, in which
case the Trustee will be deemed to have notice) and (ii) delivered to the
Trustee all information, data, and exhibits required to be provided or filed
with such Form 8-K in an EDGAR-compatible format agreed upon by the Trustee and
Depositor, Sponsor or Servicer. In the event that the reportable event does not
pertain to the Servicer, at the time such notice is provided to the Trustee, the
Depositor or the Trustee, to the extent the reportable item pertains to such
party, shall notify the Servicer thereof by telephone. The Trustee shall not be
responsible for determining what information is required to be filed on a Form
8-K in connection with the transactions contemplated by this Agreement (unless
such information is specific to the Trustee, in which case the Trustee will be
responsible for consulting with the Depositor or Servicer in making such a
determination) or what events shall cause a Form 8-K to be required to be filed
(unless such event is specific to the Trustee, in which case the Trustee will be
responsible for consulting with the Depositor or Servicer before causing such
Form 8-K to be filed) and shall not be liable for any late filing of a Form 8-K
in the event that it does not receive all information, data and exhibits
required to be provided or filed on or prior to the second Business Day prior to
the applicable filing deadline. After preparing the Form 8-K on behalf of the
Depositor, the Trustee shall forward electronically a draft copy of the Form 8-K
to the Depositor and the Servicer for review. No later than the end of business
on the second Business Day after receiving a final copy of the Form 8-K from the
Trustee, a duly authorized representative of the Servicer shall sign the Form
8-K and return an electronic or fax copy of such signed Form 8-K (with an
original executed hard copy to follow by overnight mail) to the Trustee and the
Trustee shall file such Form 8-K within two (2) Business Days; provided that the
Depositor has notified the Trustee in writing that it approves of the form and
substance of such Form 8-K. If a Form 8-K cannot be filed on time or if a
previously filed Form 8-K needs to be amended, the Trustee will follow the
procedures set forth in this Agreement. After filing a Form 8-K with the
Commission, the Trustee will make available on its internet website a final
executed copy of each Form 8-K. The Trustee will have no obligation to prepare,
execute or file such Form 8-K or any liability with respect to any failure to
properly prepare, execute or file such Form 8-K resulting from the Trustee's
inability or failure to obtain or receive any information or signatures needed
to prepare, arrange for execution or file such Form 8-K within the time frames
required by this paragraph, not resulting from its own negligence, bad faith or
willful misconduct.

     Within fifteen (15) days after each Distribution Date, the Trustee shall,
on behalf of the Issuing Entity and in accordance with industry standards, file
with the Commission via the Electronic Data Gathering and Retrieval System
(EDGAR), a Form 10-D with a copy of the report to the Certificateholders for
such Distribution Date as an exhibit thereto. Any other information provided to
the Trustee by the Servicer or Depositor to be included in Form 10-D shall be
determined and prepared by and at the direction of the Depositor pursuant to the
following paragraph, and the Trustee will have no duty or liability for any
failure hereunder to determine or prepare any additional information on Form
10-D ("Additional Form 10-D Disclosure") as set forth in the next paragraph.

     The Depositor shall notify the Trustee of its intent to provide Additional
Form 10-D Disclosure prior to the related Distribution Date. As set forth in
Schedule W hereto, within five (5) calendar days after the related Distribution
Date (i) the parties hereto, as applicable, will be required to provide to the
Depositor and the Servicer, to the extent known to such party, any Additional
Form 10-D Disclosure

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(including any breaches of pool asset representations and warranties or
transaction covenants of which the party has written notice and which has not
been included on the monthly distribution report for the period), if applicable,
and (ii) the Depositor, to the extent it deems necessary, will forward to the
Trustee in EDGAR-compatible form (with a copy to the Servicer), or in such other
form as otherwise agreed upon by the Trustee and the Depositor, the form and
substance of the Additional Form 10-D Disclosure by the fifth (5th) calendar day
after the related Distribution Date. The Depositor will be responsible for any
reasonable fees and expenses incurred by the Trustee in connection with
including any Additional Form 10-D Disclosure on Form 10-D pursuant to this
paragraph.

     After preparing the Form 10-D at the direction of the Depositor, the
Trustee will forward electronically a draft copy of the Form 10-D to the
Depositor and the Servicer for review by the ninth (9th) calendar day after the
Distribution Date. No later than two (2) Business Days after receipt of a final
copy after the related Distribution Date, unless the Servicer receives a notice
from the Trustee as described below or a written notice from the Depositor that
it has discovered a material deficiency or irregularity with respect to such
Form 10-D, a duly authorized representative of the Servicer shall sign the Form
10-D and return an electronic or fax copy of such Form 10-D (with an original
executed hard copy to follow by overnight mail) to the Trustee, and the Trustee
shall file such Form 10-D within two (2) Business Days. Unless the Servicer
shall have received notice from the Trustee to the contrary, the Trustee will be
deemed to have represented to the Servicer that, assuming that the information
provided to the Trustee by the Servicer is correct, the monthly statement has
been properly prepared by the Trustee, and the Servicer may rely upon the
accuracy thereof in it execution of the Form 10-D. If a Form 10-D cannot be
filed on time (because of notice from the Trustee per the previous sentence or
otherwise) or if a previously filed Form 10-D needs to be amended, the Trustee
will follow the procedures set forth in this Section. After filing with the
Commission, the Trustee will make available on its internet website a final
executed copy of each Form 10-D. The Trustee will have no liability (1) with
respect to any failure to properly prepare, execute or file such Form 10-D
resulting from the Trustee's inability or failure to obtain or receive any
information needed to prepare, arrange for execution or file such Form 10-D on a
timely basis and (2) with respect to the date of filing so long as filing occurs
by the Commission's deadline.

     Prior to March 30, 2007 (and, if applicable, prior to the ninetieth (90th)
calendar day after the end of the fiscal year for the Issuing Entity), the
Trustee shall, on behalf of the Issuing Entity and in accordance with industry
standards, prepare and file with the Commission via EDGAR a Form 10-K with
respect to the Issuing Entity. Such Form 10-K shall include the following items,
in each case to the extent they have been delivered to the Trustee within the
applicable time frames set forth in this Agreement, (i) an annual compliance
statement for the Servicer and each Subservicer, as described in Section 3.17 of
the Agreement, (ii)(A) the annual reports on Assessment of Compliance with
Servicing Criteria for each Servicer, Subservicer and Subcontractor (unless the
Depositor has notified the Trustee that it has determined that such compliance
statement is not required by Regulation AB), as described in Section 3.18 of the
Agreement, and (B) if any Reporting Servicer's report on Assessment of
Compliance with Servicing Criteria described in Section 3.18 identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance as set forth on the Reporting Servicer's report on Assessment of
Compliance or if any report on Assessment of Compliance with Servicing Criteria
described in Section 3.18 of the Agreement is not included as an exhibit to such
Form 10-K, disclosure that such report is not included and an explanation why
such report is not included, (iii)(A) the registered public accounting firm
attestation report for the Servicer and each Subservicer, as described in
Section 3.18 of the Agreement, and (B) if any registered public accounting firm
attestation report described in the Section 3.18 of the Agreement identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance, or if any such registered public accounting firm attestation
report is not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation why such report is not included, and
(iv) a certification (the "Sarbanes-Oxley Certification") in the form attached
hereto as Exhibit S, executed by the senior officer in charge of securitizations
of the Servicer. In addition to (i)

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through (iv) above, any Additional Form 10-K Disclosure shall be determined and
prepared by and at the direction of the Depositor pursuant to the following
paragraph, and the Trustee will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure, except as
set forth in the next paragraph.

     As set forth in Schedule X hereto, no later than March 12 (other than the
Trustee, who shall not be required to deliver any information until March 15) of
each year that the Issuing Entity is subject to the Exchange Act reporting
requirements, commencing in 2007, (i) certain parties to the transaction shall
be required to provide to the Depositor and the Servicer, to the extent known,
any Additional Form 10-K Disclosure, if applicable, and (ii) the Depositor
shall, to the extent it deems necessary, forward to the Trustee in
EDGAR-compatible form, or in such other form as otherwise agreed upon by the
Trustee and the Depositor, the form and substance of the Additional Form 10-K
Disclosure by March 15. The Depositor will be responsible for any reasonable
fees and expenses incurred by the Trustee in connection with including any
Additional Form 10-K Disclosure on Form 10-K pursuant to this paragraph.

     After preparing the Form 10-K, the Trustee shall forward electronically a
draft copy of the Form 10-K to the Depositor and the Servicer for review. Upon
the request of the Servicer, the Depositor shall confirm that it has reviewed
the Form 10-K, that it has been properly prepared and that the Servicer may rely
on the accuracy thereof (other than with respect to any portion of the Form 10-K
or exhibit thereto provided by the Servicer (other than any portion thereof with
respect to which the Servicer has relied on the Trustee)). No later than 5:00
p.m. EST on the third Business Day following receipt of a final copy of the Form
10-K, and if requested, the above described confirmation from the Depositor, a
senior officer of the Servicer shall sign the Form 10-K and return an electronic
or fax copy of such signed Form 10-K (with an original executed hard copy to
follow by overnight mail) to the Trustee, and the Trustee shall file such Form
10-K by March 30. If a Form 10-K cannot be filed on time or if a previously
filed Form 10-K needs to be amended, the Trustee will follow the procedures set
forth in this Section. After filing with the Commission, the Trustee will,
pursuant to the Agreement, make available on its internet website a final
executed copy of each Form 10-K. The Trustee shall have no liability (1) with
respect to any failure to properly prepare, execute or file such Form 10-K
resulting from the Trustee's inability or failure to obtain or receive any
information or signatures needed to prepare, arrange for execution or file such
Form 10-K on a timely basis and (2) with respect to the date of filing so long
as the filing occurs by the Commission's deadline.

     Each Form 10-K shall include a Sarbanes-Oxley Certification in the form
attached hereto as Exhibit S. The Servicer will cause its senior officer in
charge of securitization to execute the Sarbanes-Oxley Certification required
pursuant to Rule 13a -14 under the Securities Exchange Act of 1934, as amended,
and to deliver the original executed Sarbanes-Oxley Certification to the Trustee
by March 12 of each year in which the Issuing Entity is subject to the reporting
requirements of the Exchange Act. In connection therewith, each of the Trustee
and the Servicer shall sign an Officer's Certificate (in the form attached
hereto as Exhibit K and Exhibit L, respectively) for the benefit of the Servicer
and its officers, directors and Affiliates regarding certain aspects of the
Sarbanes-Oxley Certification. To the extent any information or exhibits required
to be included in the Form 10 -K are not timely received by the Trustee prior to
March 30, the Trustee shall, on behalf of the Issuing Entity, file a Form 12B-25
and one or more amended Form 10-Ks, to the extent such amendments are accepted
pursuant to the Exchange Act, to include such missing information or exhibits
promptly after receipt thereof by the Trustee.

     Promptly following the first date legally permissible under applicable
regulations and interpretations of the Commission, the Trustee shall, on behalf
of the Issuing Entity and in accordance with industry standards, file with the
Commission via EDGAR a Form 15 Suspension Notification with respect to the
Issuing Entity, if applicable.

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     The Servicer agrees to furnish to the Trustee promptly, from time to time
upon request of the Depositor, such further information, reports, and financial
statements within its control related to this Agreement and the Mortgage Loans
as is reasonably necessary to prepare and file all necessary reports with the
Commission. The Trustee shall have no responsibility to file any items with the
Commission other than those specified in this Section 3.20, and the Servicer
shall execute any and all Form 8-Ks, Form 10-Ds and Form 10-Ks required
hereunder.

     If the Commission issues additional interpretative guidance or promulgates
additional rules or regulations with respect to Regulation AB or otherwise, or
if other changes in applicable law occur, that would require the reporting
arrangements, or the allocation of responsibilities with respect thereto,
described in this Section 3.20, to be conducted differently than as described,
the Depositor, the Servicer, and the Trustee will reasonably cooperate to amend
the provisions of this Section 3.20 in order to comply with such amended
reporting requirements and such amendment of this Section 3.20. Any such
amendment shall be made in accordance with Section 10.01 without the consent of
the Certificateholders, and may result in a change in the reports filed by the
Trustee on behalf of the Issuing Entity under the Exchange Act. Notwithstanding
the foregoing, the Depositor, the Servicer, and the Trustee shall not be
obligated to enter into any amendment pursuant to this Section 3.20 that
adversely affects its obligations and immunities under this Agreement.

     The Depositor, the Servicer and the Trustee agree to use their good faith
efforts to cooperate in complying with the requirements of this Section 3.20.

     In the event that the Trustee is unable to timely file with the Commission
all or any required portion of any Form 8-K, Form 10-D or Form 10-K required to
be filed pursuant to this Agreement because required disclosure information was
either not delivered to it or delivered to it after the delivery deadlines set
forth in this Agreement, the Trustee will immediately notify the Depositor and
the Servicer. In the case of Form 10-D and 10-K, the Depositor, Servicer and
Trustee will thereupon cooperate to prepare and file a Form 12b-25 and a Form
10-DA and Form 10-KA, as applicable, pursuant to Rule 12b-25 of the Exchange
Act. In the case of Form 8-K, the Trustee will, upon receipt of all disclosure
information required to be included on Form 8-K, include such disclosure
information on the next Form 10-D. In the event that any previously filed Form
8-K, Form 10-D or Form 10-K needs to be amended, the party to this Agreement
deciding that an amendment to such Form 8-K, Form 10-D or Form 10-K is required
will notify the Depositor, the Trustee and the Servicer and such parties will
cooperate to prepare any necessary Form 8-KA, Form 10-DA or Form 10-KA. Any Form
15, Form 12b-25 or any amendment to Form 8-K, Form 10-D or Form 10-K shall be
signed by an officer of the Servicer. Each party acknowledges that the
performance by any party of its duties under this Section 3.20 related to the
timely preparation and filing of Form 15, a Form 12b-25 or any amendment to Form
8-K, Form 10-D or Form 10-K is contingent upon the other parties observing all
applicable deadlines (and the related grace periods thereto) in the performance
of their duties under this Section 3.20 and Sections 3.17 and 3.18. No party
shall have liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare and/or timely file any such Form 15,
Form 12b-25 or any amendments to Forms 8-K, Form 10-D or Form 10-K, where such
failure results from another party's inability or failure to obtain or receive,
on a timely basis, any information from any party hereto needed to prepare,
arrange for execution or file such Form 15, Form 12b-25 or any amendments to
Forms 8-K, Form 10-D or Form 10-K, not resulting from its own negligence, bad
faith or willful misconduct.

     SECTION 3.21. Indemnification by Trustee.

     The Trustee shall indemnify and hold harmless the Depositor, the Servicer
and their respective 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

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upon a breach by the Trustee or any of its officers, directors, agents or
Affiliates of its obligations under Sections 3.17, 3.18 (other than Section
3.18(f)) and 3.20, any material misstatement or omission in any documents
prepared thereunder (to the extent the Trustee is responsible for providing
information or calculating amounts included in such information), the failure of
the Trustee to deliver when required any Assessment of Compliance or
Accountant's Attestation required of it pursuant to Section 3.18 or Annual
Statement of Compliance required pursuant to Section 3.17, as applicable, or any
material misstatement or omission contained in any Assessment of Compliance,
Accountant's Attestation or Annual Statement of Compliance provided on its
behalf pursuant to Section 3.17 or 3.18, as applicable, 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 indemnified parties, then the Trustee agrees that it shall
contribute to the amount paid or payable by the indemnified parties as a result
of the losses, claims, damages or liabilities of the indemnified parties in such
proportion as is appropriate to reflect the relative fault of the Trustee on the
one hand and of the indemnified parties on the other. Failure by the Trustee to
deliver an Accountant's Attestation when required under Section 3.18(f) will be
grounds for immediate removal of the Trustee under Section 8.08; in the event of
such failure, the Trustee shall pay certain costs and expenses of the Depositor
caused by such failure as separately agreed to by the Depositor and the Trustee.

     SECTION 3.22. Indemnification by Servicer.

     The Servicer shall indemnify and hold harmless the Trustee and the
Depositor and their respective 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 Sections 3.17, 3.18 and 3.20, any material
misstatement or omission in any documents prepared thereunder (to the extent the
Servicer is responsible for providing information or calculating amounts
included in such information), the failure of the Servicer to deliver when
required any Assessment of Compliance or Accountant's Attestation required of it
pursuant to Section 3.18 or Annual Statement of Compliance required pursuant to
Section 3.17, as applicable, or any material misstatement or omission contained
in any Assessment of Compliance, Accountant's Attestation or Annual Statement of
Compliance provided on its behalf pursuant to Section 3.17 or 3.18, as
applicable (to the extent the Servicer is responsible for providing information
or calculating amounts included in such information), 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 indemnified parties, then the Servicer agrees that it shall
contribute to the amount paid or payable by the indemnified parties as a result
of the losses, claims, damages or liabilities of the indemnified parties in such
proportion as is appropriate to reflect the relative fault of the Servicer on
the one hand and the indemnified parties on the other.

     Notwithstanding the foregoing, the Servicer shall be entitled to rely
conclusively on the accuracy of the information or data provided to the Servicer
by the Trustee or the Depositor in connection with the document preparation
under Sections 3.17, 3.18 and 3.20, and the Servicer shall be entitled to rely
conclusively upon and shall have no liability for any errors in such
information.

     SECTION 3.23. Prepayment Charge Reporting Requirements.

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

          (i) loan number;

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

     SECTION 3.25. Further Indemnification by the Servicer.

     The Servicer shall indemnify the Sponsor, the Issuing Entity, Trustee (in
its individual capacity and in its capacity as Trustee) and the Depositor and
hold each of them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of such
parties may sustain in any way related to the failure of the Servicer to perform
its duties and service the Mortgage Loans in compliance with the terms of this
Agreement by reason of breach of representations of the Servicer or willful
misfeasance, bad faith or negligence, or by reason of reckless disregard of
obligations and duties hereunder. The Servicer promptly shall notify the
Sponsor, the Trustee and the Depositor or any other relevant party if a claim is
made by a third party with respect to such party and 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 provide the
Trustee and the Depositor with a written report of all expenses and advances
incurred by the Servicer pursuant to this Section 3.25, and the Servicer from
the assets of the Trust Fund in the Collection Account promptly shall reimburse
itself for all amounts advanced by it pursuant to the second sentence of this
Section 3.25 except when the claim in any way relates to the gross negligence,
bad faith or willful misconduct of the Servicer. The provisions of this
paragraph shall survive the termination of this Agreement and the payment of the
outstanding Certificates.

     SECTION 3.26. Solicitation.

          The Servicer may solicit or refer to a mortgage originator, who may or
may not be an affiliate of the Depositor or the Servicer, any Mortgagor for
refinancing or otherwise take action to encourage refinancing.

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     SECTION 3.27. Existing Servicing Agreement.

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

     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, and if the Servicer so notifies such parties, the Servicer may cease
its initiation of collection efforts thereon; and such determination shall be
deemed to materially and adversely affect the interests of the
Certificateholders in such Mortgage Loan and the Sponsor will repurchase the
Mortgage Loan within a 90-day period from the date of the notice in the manner
described in Section 2.05.

     SECTION 3.29. [RESERVED]

                                   ARTICLE IV
                                  DISTRIBUTIONS

     SECTION 4.01. Advances.

     Subject to the conditions of this Article IV, the Servicer, as required
below, shall make an Advance and deposit such Advance in the Collection Account.
Each such Advance shall be remitted to the Collection Account no later than 2:00
p.m. New York City time on the Servicer Advance Date in immediately available
funds. The Servicer shall be obligated to make any such Advance only to the
extent that such advance would not be a Non-Recoverable Advance. If the Servicer
shall have determined that it has made a Non-Recoverable Advance or that a
proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Trustee for the
benefit of the Certificateholders funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, each Rating Agency and
the Trustee an Officer's Certificate setting forth the basis for such
determination. 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 for a first lien Mortgage 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

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by deposit in the Collection Account no later than the close of business on the
Servicer Advance Date on which such funds are required to be distributed
pursuant to this Agreement. The Servicer shall be entitled to be reimbursed from
the Collection Account for all Advances of its own funds made pursuant to this
Section as provided in Section 3.08. The obligation to make Advances with
respect to any Mortgage Loan shall continue until such Mortgage Loan is paid in
full or the related Mortgaged Property or related REO Property has been
liquidated or until the purchase or repurchase thereof (or substitution
therefor) from the Issuing Entity pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section 4.01.

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

     In the event that any Mortgage Loan is the subject of a Prepayment Interest
Shortfall, the Servicer shall, from amounts in respect of the Servicing Fee for
such Distribution Date, deposit into the Collection Account, as a reduction of
the Servicing Fee for such Distribution Date, no later than the Servicer Advance
Date immediately preceding such Distribution Date, an amount up to the
Prepayment Interest Shortfall; provided that the amount so deposited with
respect to any Distribution Date shall be limited to the product of (x)
one-twelfth of 0.25% 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 Issuing
Entity or the Certificateholders. With respect to any Distribution Date, to the
extent that the Prepayment Interest Shortfall exceeds Compensating Interest
(such excess, a "Non-Supported Interest Shortfall"), such Non-Supported Interest
Shortfall shall reduce the Current Interest with respect to each Class of
Certificates, pro rata based upon the amount of interest each such Class would
otherwise be entitled to receive on such Distribution Date. Notwithstanding the
foregoing, there shall be no reduction of the Servicing Fee in connection with
Prepayment Interest Shortfalls related to the Relief Act and the Servicer shall
not be obligated to pay Compensating Interest with respect to Prepayment
Interest Shortfalls related to the Relief Act.

     SECTION 4.03. Distributions on the REMIC Interests.

     On each Distribution Date, amounts on deposit in the Certificate Account
shall be treated for federal income tax purposes as applied to distributions on
the interests in each of the SWAP REMIC and 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.

     SECTION 4.04. Distributions.

     (a) [Reserved]

     (b) On each Distribution Date (or in the case of any Net Swap Payments owed
to the Swap Counterparty, two "business days" (as defined in the Swap Agreement)
prior to such Distribution Date), the Trustee shall make the following
distributions from the Certificate Account of an amount equal to the Interest
Funds in the following order of priority:

          (i) to the Class P Certificates, any prepayment charges collected on
     the Mortgage Loans and (A) any amounts paid by the Sponsor or the Servicer
     in respect of prepayment charges pursuant to this Agreement or (B) any
     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 received during the related
     Prepayment Period;

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          (ii) to the Supplemental Interest Trust, any Net Swap Payments owed to
     the Swap Counterparty;

          (iii) to the Supplemental Interest Trust, any Swap Termination Payment
     owed by the Issuing Entity to the Swap Counterparty (other than any
     Defaulted Swap Termination Payment);

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

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

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

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

          (viii) to the Class M-4 Certificates, the Current Interest and any
     Interest Carry Forward Amount for such Class;

          (ix) to the Class M-5 Certificates, the Current Interest and any
     Interest Carry Forward Amount for such Class;

          (x) to the Class M-6 Certificates, the Current Interest and any
     Interest Carry Forward Amount for such Class;

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

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

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

          (xiv) any remainder pursuant to Section 4.04(e) hereof.

On each Distribution Date, subject to the proviso in (b)(iv) 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, if necessary, to the Class or Classes
of Certificates that are not related to such group of Mortgage Loans.

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     (c) All amounts representing prepayment charges in respect of the Mortgage
Loans, and amounts paid by the Servicer in respect of prepayment charges
pursuant to this Agreement will be distributed by the Trustee to the Holders of
the Class P Certificates pursuant to Section 4.04(b).

     (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 Supplemental Interest Trust, any Net Swap Payment owed by
     the Issuing Entity to the Swap Counterparty to the extent no paid pursuant
     to Section 4.04(b)(ii);

          (ii) to the Supplemental Interest Trust, any Swap Termination Payment
     owed by the Issuing Entity to the Swap Counterparty (other than any
     Defaulted Swap Termination Payment) to the extent no paid pursuant to
     Section 4.04(b)(iii);

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

               (1) the Group One Principal Distribution Amount shall be
               distributed sequentially as follows: first, to the Class R
               Certificate until its Certificate Principal Balance has been
               reduced to zero, and second, to the Class A-1 Certificates until
               the Certificate Principal Balance of the Class A-1 Certificates
               has been reduced to zero;

               (2) the Group Two Principal Distribution Amount shall be
               distributed as follows:

               (a)  concurrently, pro rata based on their respective Certificate
                    Principal Balance, (x) to the Class A-2A Certificates until
                    the Certificate Principal Balance thereof has been reduced
                    to zero, and (y) to the Class A-2B Certificates and the
                    Class A-2C Certificates, sequentially, to the Class A-2B
                    Certificates until the Certificate Principal Balance thereof
                    has been reduced to zero and then to the Class A-2C
                    Certificates until the Certificate Principal Balance thereof
                    has been reduced to zero; and

               (b)  then to the Class A-2D Certificates until the Certificate
                    Principal Balance thereof has been reduced to zero;

               provided, however, that on and after the Distribution Date on
               which the aggregate Certificate Principal Balance of the
               Subordinate Certificates and the Class C Certificates has been
               reduced to zero, any principal distributions allocated to the
               Class A-2A, Class A-2B, Class A-2C and Class A-2D 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;

          (iv) sequentially, to the Class M-1 Certificates, the Class M-2
     Certificates and the Class M-3 Certificates, in that order, until the
     Certificate Principal Balance of

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     each such class has been reduced to zero, an amount equal to the Class
     M-1/M-2/M-3 Principal Distribution Amount;

          (v) to the Class M-4 Certificates, the Class M-4 Principal
     Distribution Amount;

          (vi) to the Class M-5 Certificates, the Class M-5 Principal
     Distribution Amount;

          (vii) to the Class M-6 Certificates, the Class M-6 Principal
     Distribution Amount;

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

          (ix) to the Class B-2 Certificates, the Class B-2 Principal
     Distribution Amount;

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

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

     (e) 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)(xiv) and 4.04(d)(xi) 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) to the Class A and Class R Certificates, any amounts due as
     described in and in the same order of priority as set forth in Section
     4.04(b)(iv), to the extent unpaid from Interest Funds;

          (ii) to the Subordinate Certificates, any amount due and in the same
     priority as set forth pursuant to Section 4.04(b)(v) through Section
     4.04(b)(xiii), to the extent unpaid from Interest Funds;

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

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

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

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

          (vii) to the Class M-4 Certificates, the Class M-4 Unpaid Realized
     Loss Amount;

          (viii) to the Class M-5 Certificates, the Class M-5 Unpaid Realized
     Loss Amount;

          (ix) to the Class M-6 Certificates, the Class M-6 Unpaid Realized Loss
     Amount;

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

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

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

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          (xiii) to the Class A, Class R, Class M and Class B Certificates, on a
     pro rata basis, the Floating Rate Certificate Carryover for each such Class
     in proportion to such amounts; and

          (xiv) the remainder pursuant to Section 4.04(f) hereof.

     (f) on each Distribution Date, the Trustee shall allocate the remainder
pursuant to Section 4.04(e)(xiv) as follows:

          (i) to the Supplemental Interest Trust, any Defaulted Swap Termination
     Payment;

          (ii) 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

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

     (g) On each Distribution Date, the Trustee shall allocate the remainder
pursuant to Section 4.04(f)(iii) hereof, (i) to the Trustee to reimburse amounts
or pay indemnification amounts owing to the Trustee from the Issuing Entity
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.

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

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

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

          (v) to the Class M-6 Certificates until the Class M-6 Certificate
     Principal Balance is reduced to zero;

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

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

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

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

          (x) to the Class M-1 Certificates until the Class M-1 Certificate
     Principal Balance is reduced to zero.

     (i) 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.

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

     (j) The Trustee is hereby directed by the Depositor to execute the Cap
Contracts on behalf of the Issuing Entity in the forms presented to it by the
Depositor and shall have no responsibility for the contents 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 the Cap Contracts, the Trustee shall not be required to
make any payments to the Cap Contract Counterparty under the Cap Contracts. Any
payments received under the terms of the related Cap Contract will be available
to pay the holders of the related Classes of 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 and Class R 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 the Cap Contracts
shall be paid to the related Classes of 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
     Issuing Entity 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 Issuing Entity in respect of
     any 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 Classes of Certificates as provided in this Section 4.04(j). 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 applicable Cap Contract will equal the product of
     (i) the excess of (x) One-Month Cap 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 applicable Cap Contract), over (y) the rate with
     respect to such Distribution Date

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     as shown under the heading "1ML Lower Collar" in the schedule to the
     applicable Cap Contract, (ii) an amount equal to the lesser of (A) the
     related Cap Contract Notional Balance for such Distribution Date as shown
     in the schedule to the applicable Cap Contract and (B) the Certificate
     Principal Balance of (I) in the case of the Class A-1 Cap Contract, the
     Class A-1 and Class R Certificates, (II) in the case of the Class A-2 Cap
     Contract, the Class A-2 Certificates and (III) in the case of the
     Subordinate Certificate Cap Contract, the Subordinate Certificates, and
     (iii) the number of days in such Accrual Period, divided by 360. If a
     payment is made to the Issuing Entity 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, on the monthly
     statement to Certificateholders described in Section 4.05 below, report the
     amounts paid with respect to Floating Rate Certificate Carryovers and the
     amount due 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 its
     respective 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 Business Days, as defined in
     the applicable Cap Contract, after notice of such failure is received by
     the Cap Contract Counterparty) to make a payment due under the applicable
     Cap Contract, the failure by the Cap Contract Counterparty (after a cure
     period of twenty (20) days after notice of such failure is received) to
     perform any other agreement made by it under the applicable Cap Contract,
     the termination of the Trust Fund and the applicable Cap Contract becoming
     illegal or subject to certain kinds of taxation.

          (iv) The Cap Contract Counterparty and the Trustee will enter into a
     credit support annex in relation to the Cap Contracts to protect the
     Issuing Entity.

               Pursuant to and in accordance with the terms and provisions of
     the Cap Contracts, the Cap Contract Counterparty may be required to post
     additional collateral in connection with its obligations under the Cap
     Contracts. In connection with the foregoing, the Trustee shall, when
     required, establish a Cap Posted Collateral Account on behalf of the
     holders of the Offered Certificates on the Closing Date.

               The Cap Contract Counterparty shall remit any Posted Collateral
     to the Trustee to the extent required under the Cap Contracts, and the
     Trustee shall, upon receipt of the Posted Collateral, deposit the Posted
     Collateral into the Cap Posted Collateral Account and shall hold such
     amounts in accordance with the terms and provisions of the Cap Contracts.
     Where a termination event occurs with respect to the Cap Contract
     Counterparty under the Cap Contracts, or where the Cap Contract
     Counterparty fulfills certain obligations to the Issuing Entity such as
     finding a replacement cap contract counterparty or a guarantor that meets
     the criteria described in the Cap Contracts, the Trustee may be required to
     make payments from the Cap Posted Collateral Account to the Cap Contract
     Counterparty. Amounts held in the Cap Posted Collateral Account will not be
     part of the Trust Fund and will not be available for distribution to any
     Certificateholders.

     (k) In accordance with this Agreement, the Servicer shall prepare and
deliver a report (the "Remittance Report") to the Trustee in the form of a
computer readable magnetic tape (or by such other means as the Servicer and the
Trustee may agree from time to time) containing such data and information

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such as to permit the Trustee to prepare the Monthly Statement to
Certificateholders and make the required distributions for the related
Distribution Date.

     (l) On the Closing Date, the Supplemental Interest Trust shall be
established and maintained pursuant to this Agreement, as a separate trust, the
corpus of which shall be held by Supplemental Interest Trust Trustee for the
benefit of the holders of the Certificates as a segregated subtrust of the Trust
Fund. The Supplemental Interest Trust shall contain the Swap Account, which
shall be an Eligible Account, and funds deposited therein shall be held separate
and apart from, and shall not be commingled with, any other moneys, including,
without limitation, other moneys of the Trustee held pursuant to this Agreement.
In no event shall any funds deposited in the Swap Account be credited to or made
available to any other account of the Trust Fund. The records of the Trustee
shall at all times reflect that the Supplemental Interest Trust is a subtrust of
the Trust Fund, the assets of which are segregated from other assets of the
Trust Fund.

          The Supplemental Interest Trust Trustee is hereby directed by the
Depositor to execute the Swap Agreement on behalf of the Issuing Entity in the
forms presented to it by the Depositor and shall have no responsibility for the
contents of such Swap Agreement, including, without limitation, the
representations and warranties contained therein. The Supplemental Interest
Trust Trustee shall have all of the rights and protections of the Trustee
hereunder.

          The Supplemental Interest Trust Trustee shall enforce all of the
rights of the Supplemental Interest Trust and exercise any remedies under the
Swap Agreement and, in the event the Swap Agreement is terminated as a result of
the designation by either party thereto of an Early Termination Date (as defined
in the Swap Agreement), find a replacement counterparty to enter into a
replacement swap agreement utilizing the amounts of the net Swap Termination
Payments received.

          For each Distribution Date, through and including the Distribution
Date in January 2011, the Trustee shall, based on the Significance Estimate
(which shall be provided in writing to the Trustee by the Depositor within five
(5) Business Days prior to the Distribution Date), calculate the Significance
Percentage of the Swap Agreement. If on any such Distribution Date, the
Significance Percentage is equal to or greater than 9%, the Trustee shall
promptly notify the Depositor and the Depositor, on behalf of the Trustee, shall
obtain the financial information required to be delivered by the Swap
Counterparty pursuant to the terms of the Swap Agreement. If, on any succeeding
Distribution Date through and including the Distribution Date in January 2011,
the Significance Percentage is equal to or greater than 10%, the Trustee shall
promptly notify the Depositor and the Depositor shall, within five (5) Business
Days of such Distribution Date, deliver to the Trustee the financial information
provided to it by the Swap Counterparty for inclusion in the Form 10-D relating
to such Distribution Date.

          Any Swap Termination Payment received by the Supplemental Interest
Trust Trustee shall be deposited in the Swap Account and shall be used to make
any upfront payment required under a replacement swap agreement and any upfront
payment received from the counterparty to a replacement swap agreement shall be
used to pay any Swap Termination Payment owed to the Swap Counterparty.

          Notwithstanding anything contained herein, in the event that a
replacement swap agreement cannot be obtained within thirty (30) days after
receipt by the Trustee of the Swap Termination Payment paid by the terminated
Swap Counterparty, the Trustee shall deposit such Swap Termination Payment into
a separate, segregated non-interest bearing subtrust established by the Trustee
and the Trustee shall, on each Distribution Date following receipt of such Swap
Termination Payment, withdraw from such subtrust, an amount equal to the Net
Swap Payment, if any, that would have been paid to the Supplemental Interest
Trust by the original Swap Counterparty (computed in accordance with the
original Swap Agreement) and distribute such amount in accordance with Section
4.04(l)(i)-(viii) of this

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Agreement. Any such subtrust shall not be an asset of any REMIC. Any amounts
remaining in such subtrust shall be distributed to the holders of the Class C
Certificates on the Distribution Date following the earlier of (i) the
termination of the Trust Fund pursuant to Section 9.01 and (ii) January 25,
2011.

          On any Distribution Date (or in the case of any Net Swap Payments owed
to the Swap Counterparty, two "business days" (as defined in the Swap Agreement)
prior to such Distribution Date), any Swap Termination Payments or Net Swap
Payments owed to the Swap Counterparty will be paid out of, or any Net Swap
Payments or Swap Termination Payments received from the Swap Counterparty will
be deposited into, the Swap Account. The Supplemental Interest Trust will not be
an asset of any REMIC. Funds in the Swap Account within the Supplemental
Interest Trust shall be distributed in the following order of priority by the
Trustee:

          (i) to the Swap Counterparty, all Net Swap Payments, if any, owed to
     the Swap Counterparty for such Distribution Date;

          (ii) to the Swap Counterparty, any Swap Termination Payment, other
     than a Defaulted Swap Termination Payment, if any, owed to the Swap
     Counterparty;

          (iii) to each class of the Class A and Class R Certificates, on a pro
     rata basis, any Current Interest and any Interest Carry Forward Amount with
     respect to such class to the extent unpaid;

          (iv) sequentially, to the Class M-1 Certificates, the Class M-2
     Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
     Class M-5 Certificates, the Class M-6 Certificates, the Class B-1
     Certificates, the Class B-2 Certificates and the Class B-3 Certificates, in
     that order, any Current Interest for such class to the extent unpaid;

          (v) sequentially, to the Class M-1 Certificates, the Class M-2
     Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
     Class M-5 Certificates, the Class M-6 Certificates, the Class B-1
     Certificates, the Class B-2 Certificates and the Class B-3 Certificates, in
     that order, any Interest Carry Forward with respect to such class to the
     extent unpaid;

          (vi) to the Class A, Class R, Class M and Class B Certificates, to pay
     principal as described and in the same manner and order of priority as set
     forth in Sections 4.04(d)(iii) through 4.04(d)(x) in order to restore
     levels of the Overcollateralization Amount, and after giving effect to
     distributions from Principal Distribution Amount for each such Class;

          (vii) sequentially, to the Class M-1 Certificates, the Class M-2
     Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
     Class M-5 Certificates, the Class M-6 Certificates, the Class B-1
     Certificates, the Class B-2 Certificates and the Class B-3 Certificates, in
     that order, any Unpaid Realized Loss Amount for such class to the extent
     unpaid;

          (viii) to the Class A, Class R, Class M and Class B Certificates, any
     Floating Rate Certificate Carryover to the extent not paid based on the
     amount of such unpaid Floating Rate Certificate Carryover;

          (ix) to the Swap Counterparty, any Defaulted Swap Termination Payment
     owed to the Swap Counterparty to the extent not already paid; and

          (x) to the Class C Certificates any remaining amount.

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          Notwithstanding the foregoing, however, after giving effect to
proposed distributions on any Distribution Date, the sum of the cumulative
amounts distributed pursuant to clause (vi) above and the cumulative amounts
distributed pursuant to clause (vii) above shall be limited to the aggregate
amount of cumulative Realized Losses incurred from the Cut-off Date through the
last day of the related Prepayment Period.

          Upon termination of the Trust Fund, any amounts remaining in the Swap
Account within the Supplemental Interest Trust shall be distributed pursuant to
the priorities set forth in this Section 4.04(l).

          With respect to the failure of the Swap Counterparty to perform any of
its obligations under the Swap Agreement, the breach by the Swap Counterparty of
any of its representations and warranties made pursuant to the Swap Agreement,
or the termination of the Swap Agreement, the Trustee shall send any notices and
make any demands required hereunder (to the extent that a Responsible Officer of
the Trustee has actual knowledge or written notice of any such failure, breach
or termination).

          The Swap Counterparty and the Supplemental Interest Trust Trustee will
enter into a credit support annex in relation to the Swap Agreement to protect
the Supplemental Interest Trust from certain ratings downgrades that might
hinder the ability of the Swap Counterparty to continue its obligations under
the Swap Agreement.

          Pursuant to and in accordance with the terms and provisions of the
Swap Agreement, the Swap Counterparty may be required to post additional
collateral in connection with its obligations under the Swap Agreement. In
connection with the foregoing, the Supplemental Interest Trust Trustee shall
establish, when required, a Swap Posted Collateral Account on behalf of the
holders of the Offered Certificates on the Closing Date.

          The Swap Counterparty shall remit any Posted Collateral to the
Supplemental Interest Trust Trustee to the extent required under the Swap
Agreement, and the Supplemental Interest Trust Trustee shall, upon receipt of
the Posted Collateral, deposit the Posted Collateral into the Swap Posted
Collateral Account and shall hold such amounts in accordance with the terms and
provisions of the Swap Agreement. Where a termination event occurs with respect
to the Swap Counterparty under the Swap Agreement, or where the Swap
Counterparty fulfills certain obligations to the Supplemental Interest Trust
such as finding a replacement swap counterparty or a guarantor that meets
established criteria of the Rating Agencies, the Supplemental Interest Trust
Trustee may be required to make payments from the Swap Posted Collateral Account
to the Swap Counterparty if amounts are due to such party under the terms and
provisions of the Swap Agreement. Amounts held in the Swap Posted Collateral
Account will not be part of the Trust Fund and will not be available for
distribution to any Certificateholders.

     SECTION 4.05. Monthly Statements to Certificateholders.

     (a) Not later than each Distribution Date based in part on information
provided by the Servicer, the Trustee shall prepare and make available on its
website located at http://www.usbank.com/abs to each Holder of a Class of
Certificates of the Issuing Entity, the Servicer, the Rating Agencies and the
Depositor a statement setting forth for the Certificates the following
information; provided, however, that, with respect to any calendar year during
which an annual report on Form 10-K is not required to be filed with the
Commission on behalf of the Issuing Entity, the information set forth in items
(xxvi) through (xxxiii) below are not required to be included in such statement
during such calendar year:

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<PAGE>

          (i) the amount of the related distribution to Holders of each Class of
     Certificates allocable to principal, separately identifying (A) the
     aggregate amount of any Principal Prepayments included therein, (B) the
     aggregate amount of all scheduled payments of principal included therein
     and (C) any Extra Principal Distribution Amount, in the aggregate and with
     respect to the Group One Mortgage Loans and Group Two Mortgage Loans;

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

          (iii) 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;

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

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

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

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

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

          (ix) the cumulative amount of (A) Realized Losses and (B) Applied
     Realized Loss Amounts to date, in the aggregate;

          (x) the amount of (A) Realized Losses and (B) Applied Realized Loss
     Amounts with respect to such Distribution Date, in the aggregate;

          (xi) 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;

          (xii) 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
     Determination Date and the date of acquisition thereof, in the aggregate;

          (xiii) whether a Stepdown Trigger Event has occurred and is in effect;

          (xiv) the total number and principal balance of any REO Properties as
     of the close of business on the related Determination Date, in the
     aggregate;

          (xv) the aggregate Stated Principal Balance of all Liquidated Loans as
     of the preceding Distribution Date, in the aggregate

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<PAGE>

          (xvi) any Floating Rate Certificate Carryover paid and all Floating
     Rate Certificate Carryover remaining on each Class of the Offered
     Certificates on such Distribution Date 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 and amount of prepayment charges and the amount of
     late payment fees received during the related Prepayment Period in the
     aggregate;

          (xviii) as of each Distribution Date, the amount, if any, received
     pursuant to each Cap Contract and the amount thereof, if any, to be paid to
     each Class of Certificates;

          (xix) as of each Distribution Date, the amount, if any, to be
     deposited in the Swap Account within the Supplemental Interest Trust
     pursuant to the Swap Agreement as described in Section 4.04(l) and the
     amount thereof to be paid to the Certificates;

          (xx) the number of Mortgage Loans with respect to which (i) a
     reduction in the Mortgage Rate has occurred or (ii) the related borrower's
     obligation to repay interest on a monthly basis has been suspended or
     reduced pursuant to the Relief Act or the California Military and Veterans
     Code, as amended; and (iii) the amount of interest not required to be paid
     with respect to any such Mortgage Loans during the related Due Period as a
     result of such reductions in the aggregate and with respect to the Group
     One Mortgage Loans and Group Two Mortgage Loans;

          (xxi) 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;

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

          (xxiii) 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".

          (xxiv) the aggregate amount of all Advances recovered during the
     related Due Period;

          (xxv) the allocation to each Class of Certificate of any Realized
     Losses during the related Due Period;

          (xxvi) with respect to each Class of Certificates, the amount of any
     Non-Supported Interest Shortfalls on such Distribution Date;

          (xxvii) the number and outstanding principal balance of pool assets at
     the beginning and ending of each period, and updated pool composition
     information;

          (xxviii) any material changes to methodology regarding calculations of
     delinquencies and charge-offs;

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<PAGE>

          (xxix) the amount of Servicing Advances made during the related Due
     Period and the amount of Servicing Advances recovered during the related
     Due Period out of (a) principal and interest collections and (b) other
     amounts collected from the related Mortgagors;

          (xxx) any material modifications, extensions or waivers to pool asset
     terms, fees, penalties or payments during the distribution period or that
     have cumulatively become material over time, of which the Trustee has
     received written notice thereof from the Servicer;

          (xxxi) material breaches of pool asset representations or warranties
     or transaction covenants to the extent that the Trustee has received
     written notice thereof;

          (xxxii) information on ratio, coverage or other tests used for
     determining any early amortization, liquidation or other performance
     trigger and whether the trigger was met;

          (xxxiii) the Overcollateralization Amount, the Targeted
     Overcollateralization Amount and the Overcollateralization Deficiency
     Amount or the Overcollateralization Release Amount (as applicable) as of
     such Distribution Date;

          (xxxiv) the amount of Excess Interest for any class of the LIBOR
     Certificates;

          (xxxv) the Extra Principal Distribution Amount for such Distribution
     Date; and

          (xxxvi) information regarding any pool asset changes (other than in
     connection with a pool asset converting into cash in accordance with its
     terms), such as additions or removals in connection with a prefunding or
     revolving period and pool asset substitutions and repurchases (and purchase
     rates, if applicable).

     Notwithstanding the foregoing, such statement shall also include, with
respect to each Distribution Date, the related Record Date, Determination Date,
Distribution Date and the Accrual Period.

     (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.usbank.com/abs. 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 foregoing information and reports shall be prepared and determined
by the Trustee based on Mortgage Loan data and other information provided to the
Trustee by the Servicer, Swap Counterparty or any other third party required to
deliver information hereunder. In preparing or furnishing the foregoing
information, the Trustee shall be entitled to rely conclusively on the accuracy
of the information or data provided to the Trustee by the Servicer, Swap
Counterparty or any other third party required to deliver information and the
Trustee shall be entitled to rely conclusively upon and shall have no liability
for any errors in any such information.

          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.

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<PAGE>

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

     (d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holder of the Class R Certificate 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.

                                    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

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<PAGE>

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-1     $25,000.00            $1.00               $294,133,000
 A-2A    $25,000.00            $1.00               $163,711,000
 A-2B    $25,000.00            $1.00               $ 63,475,000
 A-2C    $25,000.00            $1.00               $ 74,675,000
 A-2D    $25,000.00            $1.00               $ 28,531,000
 M-1     $25,000.00            $1.00               $ 33,825,000
 M-2     $25,000.00            $1.00               $ 40,837,000
 M-3     $25,000.00            $1.00               $ 14,850,000
 M-4     $25,000.00            $1.00               $ 16,087,000
 M-5     $25,000.00            $1.00               $ 15,262,000
 M-6     $25,000.00            $1.00               $  9,075,000
 B-1     $25,000.00            $1.00               $ 15,262,000
 B-2     $25,000.00            $1.00               $  8,250,000
 B-3     $25,000.00            $1.00               $ 11,137,000
  C          (1)                   1%                   (1)
  R      $   100.00              N/A               $    100.00
  P          (2)                   1%                   (2)
</TABLE>

----------
(1)  The Class C Certificates shall not have minimum dollar denominations as the
     Certificate Principal Balance thereof shall vary over time as described
     herein and shall be issued in a minimum percentage interest of 10% and an
     aggregate percentage interest of 100%.

(2)  The Class P Certificates shall not have minimum dollar denominations or
     Certificate Principal Balance and shall be issued in a minimum percentage
     interest of 10% and an aggregate percentage interest of 100%.

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

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

     (a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.09 hereof, a Certificate Register for the
Issuing Entity 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

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<PAGE>

provided. Upon surrender for registration of Transfer of any Certificate, the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of the same Class and of like
aggregate Percentage Interest.

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

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

     (b) No Transfer of 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 the transfer of a Class C or Class P
Certificate to the indenture trustee under an Indenture pursuant to which NIM
Notes are issued) each certify to the Trustee in writing the facts surrounding
the Transfer in substantially the forms 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 addressed to
the Trustee 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.

     No transfer of a Certificate that is neither an ERISA Restricted
Certificate nor a Class R Certificate shall be registered unless the transferee
provides the Trustee with a representation that either (i) such transferee is
not, and is not acting for, on behalf of or with any assets of, an employee
benefit plan or other arrangement subject to Title I of ERISA or plan subject to
Section 4975 of the Code, or (ii) until the termination of the Swap Agreement,
the acquisition and holding of the Certificate are eligible for exemptive relief
under any of Section 408(b)(17) of ERISA or Section 4975(d)(20) of the Code,

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Prohibited Transaction Class Exemption ("PTCE") 84-14, PTCE 90-1, PTCE 91-38,
PTCE 95-60 or PTCE 96-23.

     No transfer of an ERISA Restricted Certificate or a Class R Certificate may
be made unless the Trustee has received (I) a representation that the transferee
is not an employee benefit plan or other arrangement 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,
"Plan"), or is directly or indirectly acquiring the ERISA Restricted Certificate
or Class R Certificate for, on behalf of, or with any assets of any such Plan,
or (II) solely with respect to ERISA Restricted Certificates, (A) 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 Section I and III of PTCE 95-60, or (B) solely in the case of any such
Certificate that is a Definitive Certificate, an Opinion of Counsel satisfactory
to the Trustee and the Depositor, and upon which the Trustee shall be entitled
to rely, to the effect that the acquisition and holding of such Certificate will
not constitute or result 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 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 or the Depositor.

     Except in the case of Definitive Certificates, the representations set
forth in the immediately two preceding paragraphs of this Subsection 5.02(b),
other than clause (II)(B) in the immediately preceding paragraph, shall be
deemed to have been made to the Trustee by the transferee's acceptance of a
Certificate (or the acceptance by a Certificate Owner of the beneficial interest
in any Class of Certificate). Notwithstanding any other provision herein to the
contrary, any purported transfer of a Certificate to or on behalf of a Plan
without the delivery to the Trustee of a representation or an Opinion of Counsel
satisfactory to the Trustee as described above shall be void and of no effect.
The Trustee shall not be under any liability to any Person for any registration
of transfer of any 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 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
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.

          (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 no Transfer
     of any Class R Certificate shall be registered unless, in addition to the
     certificates

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     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
     SWR Interest, the Class LTR Interest, and the Residual Interest may be
     severed and represented by separate certificates (with the separate
     certificate that represents the Residual Interest also representing all
     rights of the Class R Certificate to distributions attributable to an
     interest rate on the Class R Certificate in excess of the REMIC
     Pass-Through Rate); provided, however, that such separate certification may
     not occur until the Trustee receives an Opinion of Counsel addressed to the
     Trustee (at the expense of the Holder of the Class R Certificate) to the
     effect that separate certification in the form and manner proposed would
     not result in the imposition of federal tax upon the Issuing Entity or any
     of the REMICs provided for herein or cause any of the REMICs provided for
     herein to fail to qualify as a REMIC; and provided further, that the
     provisions of Sections 5.02(b) and (c) will apply to each such separate
     certificate as if the separate certificate

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     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 SWR Interest, the Class LTR Interest, and the Residual
     Interest shall be severed and represented by separate Certificates (with
     the separate certificate that represents the Residual Interest also
     representing all rights of the Class R Certificate to distributions
     attributable to an interest rate on the Class R Certificate in excess of
     the REMIC Pass-Through Rate).

     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 of an Opinion of Counsel addressed to the Trustee,
which Opinion of Counsel shall not be an expense of the Issuing Entity, 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 Issuing Entity, 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 addressed to and
furnished to the Trustee, is reasonably necessary (a) to ensure that the record
ownership of, or any beneficial interest in, a Class 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
Issuing Entity, the Depositor or the Trustee.

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

     If (a) any mutilated Certificate is surrendered to the Trustee or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee such security or indemnity as may be required by the Trustee to save
the Trustee 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 Trustee and any agent of the Trustee may treat the Person in whose name
any Certificate is registered as the owner of such Certificate for the purpose
of receiving distributions as provided in this Agreement and for all other
purposes whatsoever, and neither the Trustee nor any agent of the Trustee shall
be affected by any notice to the contrary.

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

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

     SECTION 5.06. Book-Entry Certificates.

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

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

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

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

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

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

     (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.

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

     SECTION 5.07. Notices to Depository.

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

     SECTION 5.08. Definitive Certificates.

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

     SECTION 5.09. Maintenance of Office or Agency.

     The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange. The Trustee initially designates its
office at 60 Livingston Avenue, Mail Code EP-MN-WS3D, St. Paul, Minnesota
55107-2292, Attention: Structured Finance/SURF 2007-BC1, 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.

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                                   ARTICLE VI
                         THE DEPOSITOR AND THE SERVICER

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

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

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

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

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

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

     None of the Depositor, the Servicer or any of the directors, officers,
employees or agents of the Depositor or the Servicer shall be under any
liability to the Issuing Entity or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, the Servicer and any director, officer,
employee or agent of the Depositor or the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Servicer and any
director, officer, employee or agent of the Depositor or the Servicer shall be
indemnified by the Issuing Entity 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 Regulation 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 of the
Depositor or the Servicer may, in its discretion, undertake any such action that
it may deem necessary or desirable in respect of this Agreement and the rights
and duties of the parties hereto and interests of the Servicer and the
Certificateholders hereunder.

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In such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be, expenses, costs and liabilities of the Issuing
Entity, and the Depositor and the Servicer shall be entitled to be reimbursed
therefor out of the Collection Account as provided by Section 3.08 hereof.

     SECTION 6.04. Limitation on Resignation of Servicer.

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

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

     SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.

     The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy and bond shall, together, meet the requirements of
Fannie Mae or Freddie Mac, unless the Servicer has obtained a waiver of such
requirements from the Sponsor. The Servicer shall provide the Trustee, upon
request with reasonable notice, with copies of such policies and fidelity bond
or a certification from the insurance provider evidencing such policies and
fidelity bond. The Servicer may be deemed to have complied with this provision
if an Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. In the event that any such
policy or bond ceases to be in effect, the Servicer shall use its reasonable
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. The Servicer shall ensure that any such policy or fidelity
bond shall by its terms not be cancelable without thirty (30) days' prior
written notice to the Trustee.

                                   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:

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          (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

          (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 sixty (60) days after the date on which written notice of
     such failure shall have been given to the Servicer by the Trustee or the
     Depositor; or

          (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 sixty (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 the 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; or

          (vi) any failure by the Servicer to duly perform, within the required
     time period, its obligations under Sections 3.17, 3.18 and 3.22 of this
     Agreement, which failure continues unremedied for a period of ten (10) days
     after the date on which written notice of such failure, requiring the same
     to be remedied, shall have been given to the Servicer by the Trustee or any
     other party to this Agreement.

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

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

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

     SECTION 7.02. [RESERVED]

     SECTION 7.03. 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, as
applicable, the Trustee shall be entitled to all compensation and reimbursement
for costs and expenses that the Servicer would have been entitled to hereunder
if the Servicer had continued to act hereunder. Notwithstanding the foregoing,
if the Trustee has become the successor to the Servicer in accordance with
Section 7.01 hereof, the Trustee may, if it shall be unwilling to so act, or
shall, if it is prohibited by applicable law from making Advances pursuant to
Section 4.01 hereof or if it is otherwise unable to so act, appoint, or petition
a court of competent jurisdiction to appoint, any established mortgage loan
servicing institution the appointment of which successor does not adversely
affect the then current rating of the Certificates by each Rating Agency as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. Any successor
servicer shall be an institution that is a Fannie Mae and Freddie Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000,
and that is willing to service the Mortgage Loans and executes and delivers to
the Depositor and the Trustee an agreement accepting such delegation and
assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer (other
than liabilities of the Servicer under Section 6.03 hereof incurred prior to
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 shall
have consented thereto, 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,

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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.

     In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of any Event of Default),
notwithstanding anything to the contrary above, the Trustee and the Depositor
hereby agree that within ten (10) Business Days or delivery to the Trustee by
the Servicing Rights Pledgee of a letter signed by the Servicer whereby the
Servicer shall resign as Servicer under this Agreement, the Servicing Rights
Pledgee or its designee shall be appointed as successor servicer (provided that
at the time of such appointment the Servicing Rights Pledgee or such designee
meets the requirements of a successor servicer set forth above) and the
Servicing Rights Pledgee agrees to be subject to the terms of this Agreement.

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

     SECTION 7.04. Notification to Certificateholders.

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

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

                                  ARTICLE VIII
                             CONCERNING THE TRUSTEE

     SECTION 8.01. Duties of Trustee.

     For purposes of this Article VIII, references to "Trustee" shall be deemed
to include U.S. Bank National Association, in its capacity as Supplemental
Interest Trust Trustee under this Agreement and the Swap Agreement, and in
respect thereof the Supplemental Interest Trust Trustee shall have all of the
rights, protections, immunities and benefits 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 may,
proceed to protect and enforce its rights and the rights of

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the Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.

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

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

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

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

          (iii) the Trustee shall not be liable, individually or as Trustee,
     with respect to any action taken, suffered or omitted to be taken by it in
     good faith in accordance with the direction of the Holders of each Class of
     Certificates evidencing not less than 50% 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 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.

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

     SECTION 8.02. Certain Matters Affecting the Trustee.

     (a) Except as otherwise provided in Section 8.01:

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

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

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

          (iv) prior to the occurrence of an Event of Default hereunder and
     after the curing of all Events of Default that may have occurred, the
     Trustee shall not be bound to make any investigation into the facts or
     matters stated in any resolution, certificate, statement, instrument,
     opinion, report, notice, request, consent, order, approval, bond or other
     paper or document, unless requested in writing so to do by the Holders of
     each Class of Certificates evidencing not less than 50% of the Voting
     Rights of such Class;

          (v) the Trustee may execute any of the trusts or powers hereunder or
     perform any duties hereunder either directly or by or through agents,
     accountants or attorneys;

          (vi) the Trustee shall not be required to expend its own funds or
     otherwise incur any financial liability in the performance of any of its
     duties hereunder if it shall have reasonable grounds for believing that
     repayment of such funds or adequate indemnity against such liability is not
     assured to it;

          (vii) the Trustee shall not be liable, individually or as Trustee, for
     any loss on any investment of funds pursuant to this Agreement (other than
     as issuer of the investment security or as provided for in Section
     3.05(g));

          (viii) the Trustee shall not be deemed to have knowledge of an Event
     of Default until a Responsible Officer of the Trustee shall have received
     written notice thereof;

          (ix) the Trustee shall be under no obligation to exercise any of the
     trusts or powers vested in it by this Agreement or to make any
     investigation of matters arising hereunder or to

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     institute, conduct or defend any litigation hereunder or in relation hereto
     at the request, order or direction of the Certificateholders, pursuant to
     the provisions of this Agreement, unless such Certificateholders shall have
     offered to the Trustee reasonable security or indemnity against the costs,
     expenses and liabilities that may be incurred therein or thereby; and

          (x) if requested by the Servicer, the Trustee may appoint the Servicer
     as the trustee's attorney-in-fact in order to carry out and perform certain
     activities that are necessary or appropriate for the servicing and
     administration of the Mortgage Loans pursuant to this Agreement. Such
     appointment shall be evidenced by a power of attorney in such form as may
     be agreed to by the Trustee and the Servicer. The Trustee shall have no
     liability for any action or inaction of the Servicer in connection with
     such power of attorney and the Trustee shall be indemnified by the Servicer
     for all liabilities, costs and expenses incurred by the Trustee in
     connection with the Servicer's use or misuse of such powers of attorney.

     (b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.

     (c) [Reserved]

     SECTION 8.03. Trustee Not Liable for Mortgage Loans.

     The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement, of any Mortgage Loan or related
document other than with respect to the Trustee's execution and authentication
of the Certificates. The Trustee shall not be accountable for the use or
application by the Depositor or the Servicer of any funds paid to the Depositor
or the Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account or Certificate Account by the Depositor or the
Servicer.

     SECTION 8.04. Trustee May Own Certificates.

     The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights as it would have if it were not the
Trustee.

     SECTION 8.05. Trustee's Fees.

     The Trustee shall be entitled to earnings on or investment income with
respect to funds in or credited to the Certificate Account.

     SECTION 8.06. Indemnification of Trustee; Expenses.

     (a) The Trustee and its respective directors, officers, employees and
agents shall be entitled to indemnification from the Issuing Entity 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:

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          (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 Issuing Entity 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 Issuing Entity 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 Issuing Entity 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
     Issuing Entity must constitute an "unanticipated expense" of the Issuing
     Entity within the meaning of Treasury Regulations Section
     1.860G-1(b)(3)(ii).

     The provisions of this Section 8.06 shall survive any termination of this
Agreement and the resignation or removal of the Trustee and shall be construed
to include, but not be limited to any loss, liability or expense under any
environmental law.

     (b) The Trustee shall be entitled to all reasonable expenses, disbursements
and advancements incurred or made by the Trustee in accordance with this
Agreement (including fees and expenses of its counsel and all persons not
regularly in its employment), except any such expenses, disbursements and
advancements that either (i) arise from its negligence, bad faith or willful
misconduct or (ii) do not constitute "unanticipated expenses" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii).

     (c) The Trustee's right to indemnification and reimbursement shall be
subject to a cap of $300,000, excluding any Servicing Transfer Costs and any
auction expenses incurred by the Trustee in connection with Section 9.01(a)(i),
in the aggregate in any calendar year; provided, however, that such cap shall
apply only if NIM Notes have been issued and are outstanding and shall cease to
apply after the date on which any NIM Notes are paid in full. Any amounts not in
excess of this cap may be withdrawn by the Trustee from the Certificate Account
at any time.

     (d) The Trustee shall be further indemnified by the Issuing Entity for and
held harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the last paragraph of Section 2.01
hereof, including, without limitation, all costs, liabilities and expenses
(including reasonably legal fees and expenses) of investigating and defending
itself against any claim, action or proceeding, pending or threatened, relating
to the provisions of such paragraph.

     SECTION 8.07. Eligibility Requirements for Trustee.

     The Trustee hereunder shall, at all times, be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating that would
not cause any of the Rating Agencies to reduce their respective ratings of any
Class of Certificates below the ratings issued on the Closing Date (or having
provided such security from time to time as is sufficient to avoid such
reduction). If such corporation or association publishes reports of condition at
least annually,

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pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.07 the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.07, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.08 hereof.
The corporation or national banking association serving as Trustee may have
normal banking and trust relationships with the Depositor and its Affiliates;
provided, however, that such corporation cannot be an Affiliate of the Servicer
other than the Trustee in its role as successor to the Servicer.

     SECTION 8.08. Resignation and Removal of Trustee.

     The Trustee may at any time resign and be discharged from the trusts hereby
created by (1) giving written notice of resignation to the Depositor and by
mailing notice of resignation by first class mail, postage prepaid, to the
Certificateholders at their addresses appearing on the Certificate Register and
each Rating Agency, not less than sixty (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 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 thirty (30) days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.

     If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Issuing Entity by any state in
which the Trustee or the Issuing Entity 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 Issuing Entity against such tax, then the
Depositor may remove the Trustee and 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 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, 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 successor so
appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the Successor Trustee.

     Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.08 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.09 hereof.

     SECTION 8.09. Successor Trustee.

     Any successor trustee appointed as provided in Section 8.08 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become

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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 (10) days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.

     SECTION 8.10. Merger or Consolidation of Trustee.

     Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).

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

     Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.11, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the written approval of the
Servicer. The Trustee shall not be liable for the actions of any co-trustee
appointed at the request of the Trustee provided that such co-trustee has been
appointed with due care. If the Servicer shall not have joined in such
appointment within fifteen (15) days after the receipt by it of a request to do
so, or in the case an Event of Default shall have occurred and be 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

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     separate trustee or co-trustee jointly (it being understood that such
     separate trustee or co-trustee is not authorized to act separately without
     the Trustee joining in such act), except to the extent that under any law
     of any jurisdiction in which any particular act or acts are to be performed
     (whether as Trustee hereunder or as successor to the Servicer hereunder),
     the Trustee shall be incompetent or unqualified to perform such act or
     acts, in which event such rights, powers, duties and obligations (including
     the holding of title to the Trust Fund or any portion thereof in any such
     jurisdiction) shall be exercised and performed singly by such separate
     trustee or co-trustee, but solely at the direction of the Trustee;

          (ii) No trustee hereunder shall be held personally liable by reason of
     any act or omission of any other trustee hereunder; and

          (iii) The Trustee may at any time accept the resignation of or remove
     any separate trustee or co-trustee.

     Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer and the Depositor.

     Any separate trustee or co-trustee may, at any time, constitute the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

     SECTION 8.12. Tax Matters.

     (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 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 (30) days
of the Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise

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may be required by the Code, the name, title, address, and telephone number of
the person that the holders of the Certificates may contact for tax information
relating thereto, together with such additional information as may be required
by such Form, and update such information at the time or times in the manner
required by the Code for each of the REMICs provided for herein; (c) make or
cause to be made elections, on behalf of each of the REMICs provided for herein
to be treated as a REMIC on the federal tax return of such REMICs for their
first taxable years (and, if necessary, under applicable state law); (d) prepare
and forward, or cause to be prepared and forwarded, to the Certificateholders
and to the Internal Revenue Service and, if necessary, state tax authorities,
all information returns and reports as and when required to be provided to them
in accordance with the REMIC Provisions or other applicable tax law, including
without limitation, the calculation of any original issue discount using the
Prepayment Assumption; (e) provide information necessary for the computation of
tax imposed on the transfer of a Class 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(a), 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 and grantor trusts 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; and (l) as and when necessary and appropriate,
represent each of the REMICs and grantor trusts provided for herein in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any of the REMICs provided for herein, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the REMICs provided for herein,
and otherwise act on behalf of each of the REMICs provided for herein in
relation to any tax matter involving any of such REMICs or any controversy
involving the Trust Fund.

     In order to enable the Trustee to perform its duties as set forth herein,
the Depositor shall provide, or cause to be provided, to the Trustee within ten
(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,

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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
derived by the Issuing Entity from a payment on any Cap Contract or amounts
received by the Supplemental Interest Trust as payments on the Swap Agreement)
otherwise to be distributed to the Class R Certificateholders (pro rata)
pursuant to Section 4.04, and second with amounts (other than amounts derived by
the Issuing Entity from a payment on any Cap Contract or amounts received by the
Supplemental Interest Trust as payments on the Swap Agreement) 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-3
Certificates (pro rata), third, to the Class B-2 Certificates (pro rata),
fourth, to the Class B-1 Certificates (pro rata), fifth, to the Class M-6
Certificates (pro rata), sixth, to the Class M-5 Certificates (pro rata),
seventh, to the Class M-4 Certificates (pro rata), eighth, to the Class M-3
Certificates (pro rata), ninth, to the Class M-2 Certificates (pro rata), tenth,
to the Class M-1 Certificates (pro rata) and eleventh, 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, the Servicer and the Trustee agrees not to
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any of the REMICs provided for
herein or result in the imposition of a tax upon any of the REMICs provided for
herein.

                                   ARTICLE IX
                                   TERMINATION

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

     (a) Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earliest of (i) the successful completion of the
auction referred to in Section 9.01(b), (ii) the exercise by the Servicer of the
Clean Up Call on any Distribution Date on or after the Clean Up Call Date and
(iii) the later of (x) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (y) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the

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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) (i) Any termination pursuant to Section 9.01(a)(i) shall be effected by
the auction by the Trustee of all of the Mortgage Loans and REO Properties via a
solicitation of bids in accordance with the auction procedures set forth in
Exhibit N. The Trustee shall accept the highest such bid, provided that such bid
equals or exceeds the amount described in the definition of "Auction Termination
Price." Any sale pursuant to such auction process must occur no earlier than the
second day of the calendar month that includes the Distribution Date on which
the proceeds of such sale will be distributed to the Certificateholders.

          (ii) If no sale under Section 9.01(a)(i) occurs, the Servicer may, at
its option, terminate the Trust Fund on any Distribution Date by purchasing all
of the Mortgage Loans and REO Properties at the price equal to the Clean Up Call
Price.

     Notwithstanding anything to the contrary herein, the Auction Termination
Amount received by the Trustee upon the completion of a successful auction or
the Clean Up Call Price paid by the Servicer shall be deposited by the Trustee
directly into the Certificate Account promptly upon receipt of such amount by
the Trustee. Any Clean Up Call Price to be paid by the Servicer shall be paid by
the Servicer to the Trustee for deposit into the Certificate Account.
Notwithstanding anything herein to the contrary, only an amount equal to the
Auction Termination Price or the Clean Up Call Price, reduced in each case by
the portion thereof consisting of any Swap Termination Payment (such portion,
the "Swap Optional Termination Payment"), shall be made available for
distribution to the Certificates. The Swap Optional Termination Payment shall be
withdrawn by the Trustee from the Certificate Account and remitted to the
Supplemental Interest Trust for payment to the Swap Counterparty. The Swap
Optional Termination Payment shall not be part of any REMIC and shall not be
paid into any account which is part of any REMIC.

     (c) If the Trustee receives a bid meeting the conditions specified in
Section 9.01(b)(i) or there is a Clean Up Call pursuant to Section 9.01(b)(ii),
then the Trustee's written acceptance of such bid shall constitute a plan of
complete liquidation within the meaning of Section 860F of the Code, and the
Trustee shall release to the winning bidder of the auction or the Servicer
pursuant to the Clean Up Call, upon the Trustee's receipt of the Auction
Termination Price or the Clean Up Call Price and the distribution by the Trustee
of such amounts in accordance with Section 4.04 hereof, the Mortgage Files
pertaining to the Mortgage Loans being purchased and take such other actions as
the winning bidder or such purchaser may reasonably request to effect the
transfer of the Mortgage Loans to the winning bidder or such purchaser.

     In connection with any such purchase pursuant to the preceding paragraph,
the Servicer shall remit to the Trustee for deposit in the Certificate Account
all amounts then on deposit in the Collection Account (less amounts permitted to
be withdrawn by the Servicer pursuant to Section 3.08), which deposit shall be
deemed to have occurred immediately preceding such purchase.

     Any purchase shall be accomplished by deposit into the Certificate Account
of the Auction Termination Amount paid by the winning bidder if an Auction
Termination has occurred or the Clean Up Call Price in the event the Servicer
exercises a Clean Up Call and only following the delivery of an Opinion of
Counsel in form and substance acceptable to the Trustee that such termination is
a "Qualified Liquidation" under Section 860F of the Code.

     (d) The right of the Depositor to direct the Trustee to effect an Auction
Termination or of the Servicer to effect a Clean Up Call pursuant to clause
(a)(i) or (a)(ii) above shall be conditioned upon the

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aggregate Stated Principal Balance of the Mortgage Loans, at the time of any
such repurchase, aggregating ten percent (10%) or less of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.

     (e) In the event that the Trustee is unable to complete a sale at the
Auction Termination, the Servicer may terminate the Trust Fund by purchasing all
the Mortgage Loans, and REO Properties at a price equal to the Clean Up Call
Price on any Distribution Date on or after the Clean Up Call Date, by exercising
a Clean Up Call.

     (f) Notwithstanding anything to the contrary in this Article IX, no Auction
Termination or Clean Up Call shall be effected at any time during which NIM
Notes are outstanding if the Class C Certificateholder notifies the Trustee in
writing that the Class C Certificateholder does not consent to such proposed
Auction Termination or Clean Up Call. The parties hereto intend that the portion
of any amount received upon an Auction Termination or Clean Up Call that is
attributable to clause (D) of the definition of Auction Termination Price or
clause (d) of the definition of Clean Up Call Price and required to cover what
would otherwise be a shortfall in the amounts described in clause (D) of the
definition of Auction Termination Price or clause (d) of the definition of Clean
Up Call Price shall be treated for federal income tax purposes as having been
paid by the winning bidder of the auction or the Servicer, as applicable,
directly to the Class C Certificateholder (rather than having been paid to any
REMIC) to induce the Class C Certificateholder to consent to the Auction
Termination or Clean Up Call, as applicable.

     SECTION 9.02. Final Distribution on the Certificates.

     If on any Determination Date, (i) the Trustee determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Account, the Trustee shall send a final
distribution notice promptly to each Certificateholder or (ii) the Trustee
determines that a Class of Certificates shall be retired after a final
distribution on such Class, the Trustee shall notify the Certificateholders
within seven (7) Business Days after such Determination Date that the final
distribution in retirement of such Class of Certificates is scheduled to be made
on the immediately following Distribution Date. Any final distribution made
pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the Certificates at the office of the Trustee
specified in such notice. If the Trustee is able to terminate the Trust Fund
pursuant to Section 9.01(a)(i), or if the Servicer conducts a Clean Up Call and
terminates the Trust Fund pursuant to Section 9.01(a)(ii) or 9.01(e), at least
ten (10) days prior to the date notice is to be mailed to the affected
Certificateholders, the Trustee shall notify the Depositor and the Servicer of
the date such electing party intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.

     Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the Trustee
by letter to Certificateholders mailed not earlier than the 10th day and no
later than the 15th day of the month immediately preceding the month of such
final distribution. Any such notice shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the location of
the office or agency at which such presentation and surrender must be made, and
(c) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such notice
to each Rating Agency at the time such notice is given to Certificateholders.

     In the event such notice is given, the Servicer shall cause all funds in
the Collection Account to be deposited in the Certificate Account on the
Business Day prior to the applicable Distribution Date in an amount equal to the
final distribution in respect of the Certificates. Upon such final deposit with

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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 the Mortgage
Files for the Mortgage Loans.

     Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Certificate Account in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.

     In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholder
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto. Upon payment to the Class R Certificateholder 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 is able to effect an Auction Termination or
the Servicer conducts a Clean Up Call as provided in Section 9.01, the Trust
Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee has been supplied with an Opinion of Counsel
addressed to the Trustee, at the expense of the Servicer to the effect that the
failure of the Issuing Entity 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
     Issuing Entity;

          (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 Certificateholder 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 Certificateholder.

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     (b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Depositor to specify the 90-day liquidation period for the Trust
Fund, which authorization shall be binding upon all successor
Certificateholders.

     (c) The Trustee as agent for each REMIC hereby agrees to adopt and sign a
plan of complete liquidation prepared and delivered to it by the Depositor upon
the written request of the Depositor, and the receipt of Opinion of Counsel
referred to in Section 9.03(a)(i) and to take such other action in connection
therewith as may be reasonably requested by the Depositor.

     (d) Notwithstanding any other terms of this Agreement, prior to 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 being
terminated, including without limitation, any Servicing Advances and other costs
arising under Section 6.03, 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 twenty (20) days prior to any termination of the Trust Fund, 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 twenty (20) days after the termination date and on the termination
date, 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, without the consent of any of the Certificateholders,

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

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

          (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,

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     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. In addition, this
     Agreement may be amended from time to time by the Depositor, the Servicer
     and the Trustee without the consent of any of the Certificateholders and
     without delivery of an Opinion of Counsel to comply with the provisions of
     Regulation AB.

     Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Servicer and the Trustee may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of any of the REMICs provided for herein as REMICs under the
Code or to avoid or minimize the risk of the imposition of any tax on the Trust
Fund or any of the REMICs provided for herein pursuant to the Code that would be
a claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel
addressed to the Trustee, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the Trustee
or the Trust Fund, to the effect that such action is necessary or appropriate to
maintain such qualification or to avoid or minimize the risk of the imposition
of such a tax.

     This Agreement may also be amended from time to time by the Depositor, the
Servicer, the Trustee and the Holders of the Certificates affected thereby
evidencing not less than 66 2/3% of the Voting Rights, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing 66
2/3% or more of the Voting Rights of such Class or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding.

     Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel addressed to the Trustee, which opinion shall be
an expense of the party requesting such amendment but in any case shall not be
an expense of the Trustee or the Trust Fund, to the effect that such amendment
is permitted hereunder and will not cause the imposition of any tax on the Trust
Fund, any of the REMICs provided for herein or the Certificateholders or cause
any of the REMICs provided for herein to fail to qualify as a REMIC at any time
that any Certificates are outstanding.

     Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee or upon the written request of
the Trustee to the Servicer, the Servicer shall furnish written notification of
the substance of such amendment to each Certificateholder, each Rating Agency,
the Cap Contract Counterparty and the Swap Counterparty.

     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

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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 conditions precedent for amending this
Agreement have been complied with.

     The Trustee may, but shall not be obligated to, enter into any supplement,
modification or waiver which affects its rights, duties or obligations
hereunder.

     Notwithstanding the foregoing, the Trustee shall not enter into any
amendment to this Agreement that would have a materially adverse effect on the
Swap Counterparty or the Cap Contract Counterparty without first obtaining the
consent of the Swap Counterparty or the Cap Contract Counterparty, respectively.

     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

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statements in connection with any security interest granted or assigned to the
Trustee for the benefit of the Certificateholders.

     SECTION 10.05. Notices.

     (a) The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency with respect to each of the following of which a Responsible
Officer of the Trustee has written notice or actual knowledge:

          (i) Any material change or amendment to this Agreement;

          (ii) The occurrence of any Event of Default that has not been cured;

          (iii) The resignation or termination of the Trustee or the Servicer
     and the appointment of any successor;

          (iv) The repurchase or substitution of Mortgage Loans pursuant to
     Sections 2.02 and 2.03;

          (v) The final payment to Certificateholders; and

          (vi) Any change in the location of the Certificate Account or the
     Collection Account.

     (b) The Trustee shall promptly furnish or make available to each Rating
Agency copies of the following upon its receipt thereof:

          (vii) Each report to Certificateholders described in Section 4.05;

          (viii) Each annual statement as to compliance described in Section
     3.17; and

          (ix) Each annual independent public accountants' servicing report
     described in Section 3.18.

     (b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of the
Depositor, Merrill Lynch Mortgage Investors, Inc., 250 Vesey Street, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Trustee, U.S. Bank National Association, 60
Livingston Avenue, Mail Code EP-MN-WS3D, St. Paul, Minnesota 55107-2292,
Attention: Structured Finance/SURF Series 2007-BC1; (c) in the case of the
Rating Agencies, (i) Fitch, Inc. One State Street Plaza, 30th Floor, New York,
New York 10004, Attention: Surveillance Group, (ii) Standard and Poor's Ratings
Services, a division of the McGraw Hill Companies, Inc., 55 Water Street, New
York, New York 10041, (iii) Moody's Investors Service, Inc., 99 Church Street,
New York, New York 10007; (d) in the case of the Servicer, Wilshire Credit
Corporation, 14523 S.W. Millikan Way, Suite 200, Beaverton, Oregon 97005,
Attention: VP Client Services, 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.

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     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.

     Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor.

     SECTION 10.08. Limitation on Rights of Certificateholders.

     The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

     No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

     No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, the Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be incurred therein or
thereby, and the Trustee, for sixty (60) days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

     SECTION 10.09. Inspection and Audit Rights.

     The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Depositor, subject to a reasonable confidentiality
agreement, or the Trustee during the Servicer's normal

                                      144

<PAGE>

business hours, to examine all the books of account, records, reports and other
papers of the Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees, agents, counsel and independent public accountants (and by this
provision the Servicer hereby authorizes such accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor or the Trustee of any right under this
Section 10.09 shall be borne by the party requesting such inspection; all other
such expenses shall be borne by the Servicer.

     SECTION 10.10. Certificates Nonassessable and Fully Paid.

     It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Issuing Entity, that the interests in
the Issuing Entity represented by the Certificates shall be nonassessable for
any reason whatsoever, and that the Certificates, upon due authentication
thereof by the Trustee pursuant to this Agreement, are and shall be deemed fully
paid.

     SECTION 10.11. [RESERVED]

     SECTION 10.12. [RESERVED]

     SECTION 10.13. Third Party Rights.

     The Cap Contract Counterparty and the Swap Counterparty shall be deemed
third party beneficiaries of this Agreement regarding provisions related to
payments owed to the Cap Contract Counterparty or the Swap Counterparty,
respectively, so long as any of the Cap Contracts or the Swap Agreement, as
applicable, remains in effect.

     SECTION 10.14. Assignment; Sales; Advance Facilities.

     (a) The Servicer is hereby authorized to enter into a financing or other
facility (any such arrangement, an "Advance Facility"), the documentation for
which complies with Section 10.14(e) below, under which (1) the Servicer assigns
or pledges its rights under this Agreement to be reimbursed for any or all
Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders or any other party shall be required before the
Servicer may enter into an Advance Facility nor shall the Trustee or the
Certificateholders be a third party beneficiary of any obligation of an Advance
Financing Person to the Servicer. Notwithstanding the existence of any Advance
Facility under which an Advance Financing Person agrees to fund Advances and/or
Servicing Advances, (A) the Servicer (i) shall remain obligated pursuant to this
Agreement to make Advances and/or Servicing Advances pursuant to and as required
by this Agreement and (ii) shall not be relieved of such obligations by virtue
of such Advance Facility and (B) neither the Advance Financing Person nor any
Servicer's Assignee (as hereinafter defined) shall have any right to proceed
against or otherwise contact any Mortgagor for the purpose of collecting any
payment that may be due with respect to any related Mortgage Loan or enforcing
any covenant of such Mortgagor under the related Mortgage Loan documents.

                                      145

<PAGE>

     (b) If the Servicer enters into an Advance Facility, the Servicer and the
related Advance Financing Person shall deliver to the Trustee at the address set
forth in Section 10.05 hereof a written notice (an "Advance Facility Notice"),
stating (a) the identity of the Advance Financing Person and (b) the identity of
the Person (the "Servicer's Assignee") that will, subject to Section 10.14(c)
hereof, have the right to make withdrawals from the Collection Account pursuant
to Section 3.08(a) hereof to reimburse previously unreimbursed Advances and/or
Servicing Advances ("Advance Reimbursement Amounts"). Advance Reimbursement
Amounts (i) shall consist solely of amounts in respect of Advances and/or
Servicing Advances for which the Servicer would be permitted to reimburse itself
in accordance with Section 3.08 hereof, assuming the Servicer had made the
related Advance(s) and/or Servicing Advance(s) and (ii) shall not consist of
amounts payable to a successor servicer in accordance with Section 3.05 hereof
to the extent permitted under Section 10.14(e) below.

     (c) Notwithstanding the existence of an Advance Facility, the Servicer, on
behalf of the Advance Financing Person and the Servicer's Assignee, shall be
entitled to receive reimbursements of Advances and/or Servicing Advances in
accordance with Section 4.01 hereof, which entitlement may be terminated by the
Advance Financing Person pursuant to a written notice to the Trustee in the
manner set forth in Section 10.05 hereof. Upon receipt of such written notice,
the Servicer shall no longer be entitled to receive reimbursement for any
Advance Reimbursement Amounts and the Servicer's Assignee shall immediately have
the right to receive from the Collection Account all Advance Reimbursement
Amounts. Notwithstanding the foregoing, and for the avoidance of doubt, (i) the
Servicer and/or the Servicer's Assignee shall only be entitled to reimbursement
of Advance Reimbursement Amounts hereunder from withdrawals from the Collection
Account pursuant to Section 4.01 of this Agreement and shall not otherwise be
entitled to make withdrawals or receive amounts that shall be deposited in the
Distribution Account pursuant to Section 4.01 hereof, and (ii) none of the
Trustee or the Certificateholders shall have any right to, or otherwise be
entitled to, receive any Advance Reimbursement Amounts to which the Servicer or
Servicer's Assignee, as applicable, shall be entitled pursuant to Section 4.01
hereof. An Advance Facility may be terminated by the joint written direction of
the Servicer and the related Advance Financing Person. Written notice of such
termination shall be delivered to the Trustee in the manner set forth in Section
10.05 hereof. None of the Depositor or the Trustee shall, as a result of the
existence of any Advance Facility, have any additional duty or liability with
respect to the calculation or payment of any Advance Reimbursement Amount, nor,
as a result of the existence of any Advance Facility, shall the Depositor or the
Trustee have any additional responsibility to track or monitor the
administration of the Advance Facility or the payment of Advance Reimbursement
Amounts to the Servicer's Assignee. The Servicer shall indemnify the Depositor,
the Trustee, any successor servicer and the Issuing Entity for any claim, loss,
liability or damage resulting from any claim by the related Advance Financing
Person, except to the extent that such claim, loss, liability or damage resulted
from or arose out of negligence, recklessness or willful misconduct on the part
of the Depositor, the Trustee or any successor servicer, as the case may be, or
failure by the successor servicer or the Trustee, as the case may be, to remit
funds as required by this Agreement or the commission of an act or omission to
act by the successor servicer or the Trustee, as the case may be, and the
passage of any applicable cure or grace period, such that an Event of Default
under this Agreement occurs or such entity is subject to termination for cause
under this Agreement. The Servicer shall maintain and provide to any successor
servicer and, upon request, the Trustee a detailed accounting on a loan-by-loan
basis as to amounts advanced by, pledged or assigned to, and reimbursed to any
Advance Financing Person. The successor servicer shall be entitled to rely on
any such information provided by the predecessor Servicer, and the successor
servicer shall not be liable for any errors in such information.

     (d) [Reserved]

     (e) As between a predecessor Servicer and its Advance Financing Person, on
the one hand, and a successor servicer and its Advance Financing Person, if any,
on the other hand, Advance

                                      146

<PAGE>

Reimbursement Amounts on a loan-by-loan basis with respect to each Mortgage Loan
as to which an Advance and/or Servicing Advance shall have been made and be
outstanding shall be allocated on a "first-in, first out" basis. In the event
the Servicer's Assignee shall have received some or all of an Advance
Reimbursement Amount related to Advances and/or Servicing Advances that were
made by a Person other than such predecessor Servicer or its related Advance
Financing Person in error, then such Servicer's Assignee shall be required to
remit any portion of such Advance Reimbursement Amount to each Person entitled
to such portion of such Advance Reimbursement Amount. Without limiting the
generality of the foregoing, the Servicer shall remain entitled to be reimbursed
by the Advance Financing Person for all Advances and/or Servicing Advances
funded by the Servicer to the extent the related Advance Reimbursement Amounts
have not been assigned or pledged to such Advance Financing Person or Servicer's
Assignee.

     (f) For purposes of any Officer's Certificate of the Servicer made pursuant
to Section 4.01, any Non-Recoverable Advance or Non-Recoverable Servicing
Advance referred to therein may have been made by such Servicer or any
predecessor Servicer. In making its determination that any Advance or Servicing
Advance theretofore made has become a Non-Recoverable Advance or Non-Recoverable
Servicing Advance, the Servicer shall apply the same criteria in making such
determination regardless of whether such Advance or Servicing Advance shall have
been made by the Servicer or any predecessor Servicer.

     (g) Any amendment to this Section 10.14 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 10.14, including amendments to
add provisions relating to a successor servicer, may be entered into by the
Trustee, the Depositor and the Servicer without the consent of any
Certificateholder, provided such amendment complies with Section 10.01 hereof.
All reasonable costs and expenses (including attorneys' fees) of each party
hereto of any such amendment shall be borne solely by the Servicer. The parties
hereto hereby acknowledge and agree that: (a) the Advances and/or Servicing
Advances financed by and/or pledged to an Advance Financing Person under any
Advance Facility are obligations owed to the Servicer payable only from the cash
flows and proceeds received under this Agreement for reimbursement of Advances
and/or Servicing Advances only to the extent provided herein, and the Trustee
and the Trust are not, as a result of the existence of any Advance Facility,
obligated or liable to repay any Advances and/or Servicing Advances financed by
the Advance Financing Person; (b) the Servicer will be responsible for remitting
to the Advance Financing Person the applicable amounts collected by it as
reimbursement for Advances and/or Servicing Advances funded by the Advance
Financing Person, subject to the provisions of this Agreement; and (c) the
Trustee shall not have any responsibility to track or monitor the administration
of the financing arrangement between the Servicer and any Advance Financing
Person.

                                      147

<PAGE>

     IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.

                                        MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                        as Depositor

                                        By:
                                            ------------------------------------
                                        Name: Paul Park
                                        Title: Authorized Signatory

                                        WILSHIRE CREDIT CORPORATION,
                                        as Servicer

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

                                        U.S. BANK NATIONAL ASSOCIATION,
                                        not in its individual capacity, but
                                        solely as Trustee

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

                                      148
<PAGE>

                                    EXHIBIT A

                          FORMS OF OFFERED CERTIFICATES

                                       A-1

<PAGE>

                          FORM OF CLASS A CERTIFICATES

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
LYNCH MORTGAGE INVESTORS, INC. ("MLMI"), THE TRUSTEE, OR ANY SERVICER REFERRED
TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR
INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY MLMI, THE TRUSTEE, ANY SERVICER OR BY ANY OF THEIR AFFILIATES OR BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS CERTIFICATE
SHALL BE DEEMED TO REPRESENT (OR IN THE CASE OF A DEFINITIVE CERTIFICATE, SHALL
REPRESENT) TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT, AND IS NOT ACTING
FOR, ON BEHALF OF OR WITH ANY ASSETS OF, ANY EMPLOYEE BENEFIT PLAN OR OTHER
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR ANY PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B) THE TRANSFEREE'S
ACQUISITION AND HOLDING OF THIS CERTIFICATE IS COVERED BY AND EXEMPT UNDER ANY
OF SECTION 408(B)(17) OF ERISA OR SECTION 4975(D)(20) OF THE CODE, PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60,
OR PTCE 96-23, EACH AS AMENDED.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.

                              CLASS A-1 CERTIFICATE

<TABLE>
<S>                              <C>
Number: 07-BC1-A-[_]             Original Denomination:
                                 $[_]

Cut-off Date: January 1, 2007    Last Scheduled
                                 Distribution Date: January 25, 2038

First Distribution Date:         Aggregate Initial Certificate
February 26, 2007                Balance of all Class A-[_]
                                 Certificates: $[_]

Pass-Through Rate: Variable(1)   CUSIP: [_]
</TABLE>

----------
(1)  Subject to a cap as described in the Agreement.

                                       A-2

<PAGE>

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-BC1

evidencing an ownership interest in distributions allocable to the Class A-[_]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange 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 DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.

     This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class A Certificates) in certain distributions with
respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Merrill Lynch Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Wilshire Credit Corporation (the "Servicer") and are
secured by first or second mortgages on Mortgaged Properties. The Trust Fund was
created pursuant to a pooling and servicing agreement (the "Agreement"), dated
as of January 1, 2007, between the Depositor, the Servicer and U.S. Bank
National Association, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust, Mortgage
Loan Asset-Backed Certificates, Series 2007-BC1, Class A-[_] (the "Class A-[_]
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.

     The Class A-1 Certificates, the Class A-2A Certificates, the Class A-2B
Certificates, the Class A-2C Certificates, the Class A-2D Certificates, the
Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates,
the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6
Certificates, the Class B-1 Certificates, the Class B-2 Certificates, the Class
B-3 Certificates, the Class P Certificates, the Class C Certificates, and the
Class R Certificate are collectively referred to herein as the "Certificates."

     Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in February
2007. Such distributions will be made to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month preceding the month in which such payment is made, if such last day is
not a Business Day, the Business Day immediately preceding such last day.

                                       A-3

<PAGE>

     Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any Certificateholder that has so
notified the Trustee in writing in accordance with the Agreement, by wire
transfer in immediately available funds to the account of such Certificateholder
at a bank or other depository institution having appropriate wire transfer
facilities; provided, however, that the final distribution in retirement of the
certificates will be made only upon presentation and surrender of this
Certificate at the office of the Trustee or such other address designated in
writing by the Trustee. On each Distribution Date, a Holder of this Certificate
will receive such Holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.

     The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee, will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.

     Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.

     Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                       A-4

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: [______________]                U.S. BANK NATIONAL ASSOCIATION,
                                       as Trustee

                                        By:
                                            ------------------------------------
                                                     Authorized Officer

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates
referred to in the within-mentioned
Agreement.

U.S. BANK NATIONAL ASSOCIATION,
as Authenticating Agent

By:
    ---------------------------------
         Authorized Signatory

                                       A-5

<PAGE>

                             REVERSE OF CERTIFICATE

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
                    MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
                                 SERIES 2007-BC1

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust Mortgage Loan
Asset-Backed Certificates, Series 2007-BC1, issued in one or more Classes of
Class A-1, Class A-2A, Class A-2B, Class A-2C, Class A-2D, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3,
Class P, Class C, and Class R Certificates, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.

     Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.

     The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.

     No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.

     The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of

                                       A-6

<PAGE>

any Class of Certificates in a manner other than as described in clause (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) change the percentage
specified in clause (ii) of the third paragraph of Section 10.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.

     For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.

     The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) the exercise
by the Trustee of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(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.

                                       A-7

<PAGE>

                          FORM OF CLASS M CERTIFICATES

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
LYNCH MORTGAGE INVESTORS, INC. ("MLMI"), THE TRUSTEE, OR ANY SERVICER REFERRED
TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR
INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY MLMI, THE TRUSTEE, ANY SERVICER OR BY ANY OF THEIR AFFILIATES OR BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS CERTIFICATE
SHALL BE DEEMED TO REPRESENT (OR IN THE CASE OF A DEFINITIVE CERTIFICATE, SHALL
REPRESENT) TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT, AND IS NOT ACTING
FOR, ON BEHALF OF OR WITH ANY ASSETS OF, ANY EMPLOYEE BENEFIT PLAN OR OTHER
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR ANY PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B) THE TRANSFEREE'S
ACQUISITION AND HOLDING OF THIS CERTIFICATE IS COVERED BY AND EXEMPT UNDER ANY
OF SECTION 408(B)(17) OF ERISA OR SECTION 4975(D)(20) OF THE CODE, PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60,
OR PTCE 96-23, EACH AS AMENDED.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.

                              CLASS M-1 CERTIFICATE

<TABLE>
<S>                              <C>
Number: 07-BC1-M-[_]             Original Denomination:
                                 $[_]

Cut-off Date: January 1, 2007    Last Scheduled
                                 Distribution Date: January 25, 2038

First Distribution Date:         Aggregate Initial Certificate
February 26, 2007                Balance of all Class M-[_]
                                 Certificates: $[_]

Pass-Through Rate: Variable(2)   CUSIP: [_]
</TABLE>

----------
(2)  Subject to a cap as described in the Agreement.

                                       A-8

<PAGE>

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-BC1

evidencing an ownership interest in distributions allocable to the Class M-[_]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange 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 DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.

     This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class A Certificates) in certain distributions with
respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Merrill Lynch Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Wilshire Credit Corporation (the "Servicer") and are
secured by first or second mortgages on Mortgaged Properties. The Trust Fund was
created pursuant to a pooling and servicing agreement (the "Agreement"), dated
as of January 1, 2007, between the Depositor, the Servicer and U.S. Bank
National Association, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust, Mortgage
Loan Asset-Backed Certificates, Series 2007-BC1, Class M-[_] (the "Class M-[_]
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.

     The Class A-1 Certificates, the Class A-2A Certificates, the Class A-2B
Certificates, the Class A-2C Certificates, the Class A-2D Certificates, the
Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates,
the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6
Certificates, the Class B-1 Certificates, the Class B-2 Certificates, the Class
B-3 Certificates, the Class P Certificates, the Class C Certificates, and the
Class R Certificate are collectively referred to herein as the "Certificates."

     Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in February
2007. Such distributions will be made to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month preceding the month in which such payment is made, if such last day is
not a Business Day, the Business Day immediately preceding such last day.

                                       A-9

<PAGE>

     Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any Certificateholder that has so
notified the Trustee in writing in accordance with the Agreement, by wire
transfer in immediately available funds to the account of such Certificateholder
at a bank or other depository institution having appropriate wire transfer
facilities; provided, however, that the final distribution in retirement of the
certificates will be made only upon presentation and surrender of this
Certificate at the office of the Trustee or such other address designated in
writing by the Trustee. On each Distribution Date, a Holder of this Certificate
will receive such Holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.

     The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee, will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.

     Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.

     Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-10

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: [__]                             U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee

                                        By:
                                            ------------------------------------
                                                     Authorized Officer

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates
referred to in the within-mentioned
Agreement.

U.S. BANK NATIONAL ASSOCIATION,
as Authenticating Agent

By:
    ---------------------------------
          Authorized Signatory

                                      A-11

<PAGE>

                             REVERSE OF CERTIFICATE

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-BC1

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust Mortgage Loan
Asset-Backed Certificates, Series 2007-BC1, issued in one or more Classes of
Class A-1, Class A-2A, Class A-2B, Class A-2C, Class A-2D, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3,
Class P, Class C, and Class R Certificates, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.

     Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.

     The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.

     No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.

     The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (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 clause (i), without the consent of the

                                      A-12

<PAGE>

Holders of Certificates of such Class evidencing 66 2/3% or more of the Voting
Rights of such Class or (iii) change the percentage specified in clause (ii) of
the third paragraph of Section 10.01 of the Agreement, without the consent of
the Holders of all Certificates of such Class then outstanding.

     For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.

     The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) the exercise
by the Trustee of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(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.

                                      A-13

<PAGE>

                          FORM OF CLASS B CERTIFICATES

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN NOTIONAL PRINCIPAL
CONTRACTS.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
LYNCH MORTGAGE INVESTORS, INC. ("MLMI"), THE TRUSTEE, OR ANY SERVICER REFERRED
TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR
INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY MLMI, THE TRUSTEE, ANY SERVICER OR BY ANY OF THEIR AFFILIATES OR BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS CERTIFICATE
SHALL BE DEEMED TO REPRESENT (OR IN THE CASE OF A DEFINITIVE CERTIFICATE, SHALL
REPRESENT) TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT, AND IS NOT ACTING
FOR, ON BEHALF OF OR WITH ANY ASSETS OF, ANY EMPLOYEE BENEFIT PLAN OR OTHER
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR ANY PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B) THE TRANSFEREE'S
ACQUISITION AND HOLDING OF THIS CERTIFICATE IS COVERED BY AND EXEMPT UNDER ANY
OF SECTION 408(B)(17) OF ERISA OR SECTION 4975(D)(20) OF THE CODE, PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60,
OR PTCE 96-23, EACH AS AMENDED.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.

                              CLASS B-1 CERTIFICATE

<TABLE>
<S>                              <C>
Number: 07-BC1-B-[_]             Original Denomination:
                                 $[_]

Cut-off Date: January 1, 2007    Last Scheduled
                                 Distribution Date: January 25, 2038

First Distribution Date:         Aggregate Initial Certificate
February 26, 2007                Balance of all Class B-[_]
                                 Certificates: $[_]

Pass-Through Rate: Variable(3)   CUSIP: [_]
</TABLE>

----------
(3)  Subject to a cap as described in the Agreement.

                                      A-14

<PAGE>

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-BC1

evidencing an ownership interest in distributions allocable to the Class B-[_]
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange 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 DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.

     This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class A Certificates) in certain distributions with
respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Merrill Lynch Mortgage Investors, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Wilshire Credit Corporation (the "Servicer") and are
secured by first or second mortgages on Mortgaged Properties. The Trust Fund was
created pursuant to a pooling and servicing agreement (the "Agreement"), dated
as of January 1, 2007, between the Depositor, the Servicer and U.S. Bank
National Association, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust, Mortgage
Loan Asset-Backed Certificates, Series 2007-BC1, Class B-[_] (the "Class B-[_]
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.

     The Class A-1 Certificates, the Class A-2A Certificates, the Class A-2B
Certificates, the Class A-2C Certificates, the Class A-2D Certificates, the
Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates,
the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6
Certificates, the Class B-1 Certificates, the Class B-2 Certificates, the Class
B-3 Certificates, the Class P Certificates, the Class C Certificates, and the
Class R Certificate are collectively referred to herein as the "Certificates."

     Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in February
2007. Such distributions will be made to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month preceding the month in which such payment is made, if such last day is
not a Business Day, the Business Day immediately preceding such last day.

                                      A-15

<PAGE>

     Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any Certificateholder that has so
notified the Trustee in writing in accordance with the Agreement, by wire
transfer in immediately available funds to the account of such Certificateholder
at a bank or other depository institution having appropriate wire transfer
facilities; provided, however, that the final distribution in retirement of the
certificates will be made only upon presentation and surrender of this
Certificate at the office of the Trustee or such other address designated in
writing by the Trustee. On each Distribution Date, a Holder of this Certificate
will receive such Holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.

     The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee, will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.

     Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.

     Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-16

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: [__]                             U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee

                                        By:
                                            ------------------------------------
                                                    Authorized Officer

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates
referred to in the within-mentioned
Agreement.

U.S. BANK NATIONAL ASSOCIATION,
as Authenticating Agent

By:
    ---------------------------------
           Authorized Signatory

                                      A-17

<PAGE>

                             REVERSE OF CERTIFICATE

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
                    MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
                                 SERIES 2007-BC1

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust Mortgage Loan
Asset-Backed Certificates, Series 2007-BC1, issued in one or more Classes of
Class A-1, Class A-2A, Class A-2B, Class A-2C, Class A-2D, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3,
Class P, Class C, and Class R Certificates, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.

     Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.

     The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.

     No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.

     The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of

                                      A-18

<PAGE>

any Class of Certificates in a manner other than as described in clause (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) change the percentage
specified in clause (ii) of the third paragraph of Section 10.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.

     For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.

     The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) the exercise
by the Trustee of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(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.

                                      A-19

<PAGE>

                           FORM OF CLASS C CERTIFICATE

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A GRANTOR TRUST THAT HOLDS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED AND IS TREATED AS
HAVING ENTERED INTO CERTAIN NOTIONAL PRINCIPAL CONTRACTS.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
LYNCH MORTGAGE INVESTORS, INC. ("MLMI"), THE TRUSTEE, OR ANY SERVICER REFERRED
TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR
INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY MLMI, THE TRUSTEE, THE SERVICER OR BY ANY OF THEIR AFFILIATES OR BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

THIS CLASS C 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 HAVE
RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE (A) AN INVESTMENT
LETTER FROM THE PROSPECTIVE INVESTOR; AND (B) REPRESENTATIONS FROM THE
TRANSFEROR REGARDING THE OFFERING AND SALE OF THE CERTIFICATES.

NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED (A) A REPRESENTATION FROM THE TRANSFEREE THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
PLAN SUBJECT TO ANY STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW")
(COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF THE
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING
THE CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT," AS
DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
95-60, AND THE ACQUISITION AND HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT
UNDER SECTIONS I AND III OF PTCE 95-60, OR (C) SOLELY IN THE EVENT THE
CERTIFICATE IS A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO
THE TRUSTEE, AND UPON WHICH THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE ACQUISITION AND HOLDING OF THE CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE, OR A
VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE SERVICER OR

                                      A-20

<PAGE>

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 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.

NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO A PERSON THAT IS EITHER (I) NOT A
"UNITED STATES PERSON" (AS DEFINED FOR PURPOSES OF SECTION 7701 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED) OR (II) A DISQUALIFIED ORGANIZATION (AS
DEFINED IN THE POOLING AND SERVICING AGREEMENT) OR A PERSON ACQUIRING SUCH
CERTIFICATE ON BEHALF (AS A BROKER, AGENT, NOMINEE OR OTHERWISE) OF A
DISQUALIFIED ORGANIZATION. THE TRUSTEE SHALL NOT REGISTER ANY TRANSFER OF THIS
CERTIFICATE UNLESS THE TRUSTEE SHALL HAVE BEEN FURNISHED WITH A TRANSFEREE
LETTER OR A LETTER FROM THE INITIAL HOLDER OF THIS CERTIFICATE IN THE FORM
ATTACHED TO THE POOLING AND SERVICING AGREEMENT. ANY TRANSFER OF THIS
CERTIFICATE IN VIOLATION OF THESE RESTRICTIONS SHALL BE ABSOLUTELY NULL AND VOID
AND THE PURPORTED TRANSFEREE SHALL ACQUIRE NO RIGHTS WITH RESPECT TO THIS
CERTIFICATE.

                               CLASS C CERTIFICATE

<TABLE>
<S>                              <C>
Number: 07-BC1-C-1               Percentage Interest: 100%

Cut-off Date: January 1, 2007    Aggregate Percentage Interest
                                 of all Class C Certificates: 100%

First Distribution Date:         CUSIP: 84752BAT6
February 26, 2007
</TABLE>

                                      A-21

<PAGE>

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-BC1

evidencing an ownership interest in distributions allocable to the Class C
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     This certifies that MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED is
the registered owner of the ownership interest (the "Ownership Interest")
evidenced by this Certificate in certain distributions with respect to a pool of
conventional, sub-prime mortgage loans (the "Mortgage Loans") formed and sold by
Merrill Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor"), and
certain other property held in trust for the benefit of Certificateholders
(collectively, the "Trust Fund"). The Mortgage Loans are serviced by Wilshire
Credit Corporation (the "Servicer") and are secured by first or second mortgages
on Mortgaged Properties. The Trust Fund was created pursuant to a pooling and
servicing agreement (the "Agreement"), dated as of January 1, 2007, between the
Depositor, the Servicer and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement.

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust, Mortgage
Loan Asset-Backed Certificates, Series 2007-BC1, Class C (the "Class C
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.

     The Class A-1 Certificates, the Class A-2A Certificates, the Class A-2B
Certificates, the Class A-2C Certificates, the Class A-2D Certificates, the
Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates,
the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6
Certificates, the Class B-1 Certificates, the Class B-2 Certificates, the Class
B-3 Certificates, the Class P Certificates, the Class C Certificates, and the
Class R Certificate are collectively referred to herein as the "Certificates."

     Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in February
2007. Such distributions will be made to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month preceding the month in which such payment is made, if such last day is
not a Business Day, the Business Day immediately preceding such last day.

     Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any certificateholder that has so
notified the Trustee in writing in accordance with the Agreement, by wire
transfer in immediately available funds to the account of such certificateholder
at a bank or other depository institution having appropriate wire transfer
facilities; provided, however, that the final distribution in retirement of the
certificates will be made only upon presentation and surrender of this
Certificate at the office of the Trustee or such other address designated in
writing by the Trustee. On each Distribution Date, a holder of this Certificate
will receive such holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.

                                      A-22

<PAGE>

     The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee, will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.

     Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.

     Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-23

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: [__]                             U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee

                                        By:
                                            ------------------------------------
                                                    Authorized Officer

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates
referred to in the within-mentioned
Agreement.

U.S. BANK NATIONAL ASSOCIATION,
as Authenticating Agent

By:
    ---------------------------------
          Authorized Signatory

                                      A-24
<PAGE>

                             REVERSE OF CERTIFICATE

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
                    MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
                                 SERIES 2007-BC1

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust Mortgage Loan
Asset-Backed Certificates, Series 2007-BC1, issued in one or more Classes of
Class A-1, Class A-2A, Class A-2B, Class A-2C, Class A-2D, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3,
Class P, Class C, and Class R Certificates, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.

     Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.

     The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.

     No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.

     The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of

                                      A-25

<PAGE>

any Class of Certificates in a manner other than as described in clause (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) change the percentage
specified in clause (ii) of the third paragraph of Section 10.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.

     For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.

     The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) the exercise
by the Trustee of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(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.

                                      A-26

<PAGE>

                              [FORM OF ASSIGNMENT]

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)

________________________________________________________________________________

(Please Print or Type Name and Address of Assignee)

________________________________________________________________________________

the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint

_______________________________________________________ Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.

Dated:
       ------------------------------

(Signature guaranty)
                     ----------------   ----------------------------------------
                                        NOTICE: The signature to this assignment
                                        must correspond with the name as it
                                        appears upon the face of the within
                                        Certificate in every particular, without
                                        alteration or enlargement or any change
                                        whatever.

     (* This information, which is voluntary, is being requested to ensure that
the assignee will not be subject to backup withholding under Section 3406 of the
Code.)

                                      A-27

<PAGE>

                           FORM OF CLASS P CERTIFICATE

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
LYNCH MORTGAGE INVESTORS, INC. ("MLMI"), THE TRUSTEE, OR ANY SERVICER REFERRED
TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED OR INSURED BY MLMI, THE TRUSTEE, ANY SERVICER, OR
BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

THIS CLASS P 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 HAVE
RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE (A) AN INVESTMENT
LETTER FROM THE PROSPECTIVE INVESTOR; AND (B) REPRESENTATIONS FROM THE
TRANSFEROR REGARDING THE OFFERING AND SALE OF THE CERTIFICATES.

NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED (A) A REPRESENTATION FROM THE TRANSFEREE THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
PLAN SUBJECT TO ANY STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW")
(COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF THE
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING
THE CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT," AS
DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
95-60, AND THE ACQUISITION AND HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT
UNDER SECTIONS I AND III OF PTCE 95-60, OR (C) SOLELY IN THE EVENT THE
CERTIFICATE IS A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO
THE TRUSTEE, AND UPON WHICH THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE ACQUISITION AND HOLDING OF THE CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE, OR A
VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE TRUSTEE, 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 SERVICER OR THE DEPOSITOR. IF THE CERTIFICATE IS NOT
A DEFINITIVE CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE
REPRESENTATION IN (A) OR (B) ABOVE.

                                      A-28

<PAGE>

                               CLASS P CERTIFICATE

Number:  07-BC1-P-1                          Percentage Interest: 100%

Cut-off Date: January 1, 2007                Aggregate Percentage Interest
                                             of all Class P Certificates: 100%

First Distribution Date: February 26, 2007
                                             CUSIP: 84752BAS8

                                      A-29

<PAGE>

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-BC1

evidencing an ownership interest in distributions allocable to the Class P
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     This certifies that MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED is
the registered owner of the ownership interest (the "Ownership Interest")
evidenced by this Certificate in certain distributions with respect to a pool of
conventional, sub-prime mortgage loans (the "Mortgage Loans") formed and sold by
Merrill Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor"), and
certain other property held in trust for the benefit of Certificateholders
(collectively, the "Trust Fund"). The Mortgage Loans are serviced by Wilshire
Credit Corporation (the "Servicer") and are secured by first or second mortgages
on Mortgaged Properties. The Trust Fund was created pursuant to a pooling and
servicing agreement (the "Agreement"), dated as of January 1, 2007, between the
Depositor, the Servicer and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement.

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust, Mortgage
Loan Asset-Backed Certificates, Series 2007-BC1, Class P (the "Class P
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.

     The Class A-1 Certificates, the Class A-2A Certificates, the Class A-2B
Certificates, the Class A-2C Certificates, the Class A-2D Certificates, the
Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates,
the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6
Certificates, the Class B-1 Certificates, the Class B-2 Certificates, the Class
B-3 Certificates, the Class P Certificates, the Class C Certificates, and the
Class R Certificate are collectively referred to herein as the "Certificates."

     Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in February
2007. Such distributions will be made to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month preceding the month in which such payment is made, if such last day is
not a Business Day, the Business Day immediately preceding such last day.

     Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any certificateholder that has so
notified the Trustee in writing in accordance with the Agreement, by wire
transfer in immediately available funds to the account of such certificateholder
at a bank or other depository institution having appropriate wire transfer
facilities; provided, however, that the final distribution in retirement of the
certificates will be made only upon presentation and surrender of this
Certificate at the office of the Trustee or such other address designated in
writing by the Trustee. On each Distribution Date, a holder of this Certificate
will receive such holder's Percentage Interest of the amounts required to be
distributed with respect to the applicable Class of Certificates.

                                      A-30

<PAGE>

     The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee, will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.

     Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.

     Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-31

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: [___]                            U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates referred
to in the within-mentioned Agreement.

U.S. BANK NATIONAL ASSOCIATION,
as Authenticating Agent

By:
    --------------------------------------
    Authorized Signatory

                                      A-32

<PAGE>

                             REVERSE OF CERTIFICATE

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
                    MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
                                 SERIES 2007-BC1

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust Mortgage Loan
Asset-Backed Certificates, Series 2007-BC1, issued in one or more Classes of
Class A-1, Class A-2A, Class A-2B, Class A-2C, Class A-2D, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3,
Class P, Class C, and Class R Certificates, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.

     Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.

     The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.

     No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.

     The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of

                                      A-33

<PAGE>

any Class of Certificates in a manner other than as described in clause (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) change the percentage
specified in clause (ii) of the third paragraph of Section 10.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.

     For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.

     The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) the exercise
by the Trustee of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(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.

                                      A-34

<PAGE>

                           FORM OF CLASS R CERTIFICATE

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"RESIDUAL INTEREST" IN EACH OF ONE OR MORE "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED AND (II) AN INTEREST IN
NOTIONAL PRINCIPAL CONTRACTS.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
LYNCH MORTGAGE INVESTORS, INC. ("MLMI"), THE TRUSTEE OR THE SERVICER REFERRED TO
BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC RESIDUAL
INTERESTS REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY MLMI, THE TRUSTEE, ANY SERVICER OR BY ANY OF THEIR AFFILIATES OR BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

THIS CLASS R CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE WITH A REPRESENTATION IN ACCORDANCE WITH SECTION
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN 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 ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR
OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR
INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS OF
ANY SUCH PLAN.

                               CLASS R CERTIFICATE

Number: 07-BC1-R-1                      Principal Balance: $100

Cut-off Date: January 1, 2007           Pass-Through Rate: Variable(1)

First Distribution Date:                CUSIP: 84752BAU3
February 26, 2007

----------
(1)  Subject to a cap as described in the Agreement.

                                      A-35

<PAGE>

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-BC1

evidencing an ownership interest in distributions allocable to the Class R
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

     This certifies that MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED is
the registered owner of the ownership interest (the "Ownership Interest")
evidenced by this Certificate (obtained by dividing the Original Denomination of
this Certificate by the aggregate Initial Certificate Balance of all Class R
Certificates) in certain distributions with respect to a pool of conventional,
sub-prime mortgage loans (the "Mortgage Loans") formed and sold by Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by Wilshire Credit Corporation
(the "Servicer") and are secured by first or second mortgages on Mortgaged
Properties. The Trust Fund was created pursuant to a pooling and servicing
agreement (the "Agreement"), dated as of January 1, 2007, between the Depositor,
the Servicer and U.S. Bank National Association, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement.

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust, Mortgage
Loan Asset-Backed Certificates, Series 2007-BC1, Class R (the "Class R
Certificates") and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which Agreement such Holder is
bound.

     The Class A-1 Certificates, the Class A-2A Certificates, the Class A-2B
Certificates, the Class A-2C Certificates, the Class A-2D Certificates, the
Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates,
the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6
Certificates, the Class B-1 Certificates, the Class B-2 Certificates, the Class
B-3 Certificates, the Class P Certificates, the Class C Certificates, and the
Class R Certificate are collectively referred to herein as the "Certificates."

     Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing in February
2007. Such distributions will be made to the Person in whose name this
Certificate is registered at the close of business on (i) the last Business Day
of the month preceding the month in which such payment is made, (ii) if such
last day is not a Business Day, the Business Day immediately preceding such last
day.

     Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any certificateholder that has so
notified the Trustee in writing in accordance with the Agreement, by wire
transfer in immediately available funds to the account of such certificateholder
at a bank or other depository institution having appropriate wire transfer
facilities; provided, however, that the final distribution in retirement of the
certificates will be made only upon presentation and surrender of this
Certificate at the office of the Trustee or such other address designated in
writing by the Trustee. On each Distribution Date, a holder of

                                      A-36

<PAGE>

this Certificate will receive such holder's Percentage Interest of the amounts
required to be distributed with respect to the applicable Class of Certificates.

     The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee, will, subject to the limitations set
forth in the Agreement, authenticate and deliver, in the name of the designated
transferee or transferees, a Certificate of a like class and dated the date of
authentication by the Authenticating Agent. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, for that
purpose and specified in such notice of final distribution.

     Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.

     Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-37

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: [____]                           U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Officer

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates
referred to in the within-mentioned
Agreement.

U.S. BANK NATIONAL ASSOCIATION,
as Authenticating Agent

By:
    ---------------------------------
    Authorized Signatory

                                      A-38

<PAGE>

                             REVERSE OF CERTIFICATE

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
                    MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
                                 SERIES 2007-BC1

     This Certificate is one of a duly authorized issue of Certificates,
designated as Specialty Underwriting and Residential Finance Trust Mortgage Loan
Asset-Backed Certificates, Series 2007-BC1, issued in one or more Classes of
Class A-1, Class A-2A, Class A-2B, Class A-2C, Class A-2D, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3,
Class P, Class C, and Class R Certificates, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.

     Following the initial issuance of the Certificates, the principal balance
of this Certificate will be different from the Original Denomination shown
above. Anyone acquiring this Certificate may ascertain its current principal
balance by inquiry of the Trustee.

     The Holder, by its acceptance of this Certificate, agrees that it will look
solely to the Trust Fund and certain amounts resulting from credit enhancements
for payment hereunder and that the Trustee is not liable to the Holders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.

     No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor and the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the Percentage Interest in the Trust Fund evidenced thereby
for the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor nor the Trustee will be
affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.

     The Agreement may also be amended from time to time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of

                                      A-39

<PAGE>

any Class of Certificates in a manner other than as described in clause (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) change the percentage
specified in clause (ii) of the third paragraph of Section 10.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.

     For federal income tax purposes, the Trust Fund will include multiple "real
estate mortgage investment conduits" (each, a "REMIC") in a tiered REMIC
structure. The REMIC Regular Interests will represent "regular interests" in one
of the REMICs included in the Trust Fund. The Class R Certificate will represent
the sole class of "residual interest" in each of the REMICs.

     The obligations and responsibilities of the Depositor, the Servicer and the
Trustee under the Agreement shall terminate upon the earlier of (a) the exercise
by the Trustee of an Optional Termination; and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(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.

                                      A-40

<PAGE>

                              [FORM OF ASSIGNMENT]

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)

________________________________________________________________________________

(Please Print or Type Name and Address of Assignee)

________________________________________________________________________________

the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint

_______________________________________________________ Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.

Dated:
       ------------------------------

(Signature guaranty)
                     ----------------   ----------------------------------------
                                        NOTICE: The signature to this assignment
                                        must correspond with the name as it
                                        appears upon the face of the within
                                        Certificate in every particular, without
                                        alteration or enlargement or any change
                                        whatever.

     (* This information, which is voluntary, is being requested to ensure that
the assignee will not be subject to backup withholding under Section 3406 of the
Code.)

                                      A-41

<PAGE>

                                    EXHIBIT B

                     MORTGAGE LOAN SCHEDULE - MORTGAGE POOL

                             [INTENTIONALLY OMITTED]

                                       B-1

<PAGE>

                                   EXHIBIT C-1

                                   [RESERVED]

                                      C-1-1

<PAGE>

                                   EXHIBIT C-2

                                   [RESERVED]

                                      C-2-1
<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 January 1, 2007, among Merrill
     Lynch Mortgage Investors, Inc., as depositor, Wilshire Credit Corporation,
     as servicer, and U.S. Bank National Association, as trustee, relating to
     Specialty Underwriting and Residential Finance Trust, Mortgage Loan
     Asset-Backed Certificates, Series 2007-BC1

Ladies and Gentlemen:

     In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:

     (i) All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;

     (ii) In connection with each Mortgage Loan as to which documentary evidence
of recording was not received on the Closing Date, it has received evidence of
such recording; and

     (iii) Such documents have been reviewed by it and such documents do not
contain any material omissions or defects within the meaning of Section 2.01 or
2.02.

     The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond confirming (i) that the Mortgage Loan number and
the name of the Mortgagor in each Mortgage File conform to the respective
Mortgage Loan number and name listed on the Mortgage Loan Schedule and (ii) the
existence in each Mortgage File of each of the documents listed in subparagraphs
(i)(a) through (k), inclusive, of Section 2.01 in the Agreement. The Trustee
makes no representations or warranties as to the validity, legality,
recordability, sufficiency, recordability, enforceability or genuineness of any
of the documents contained in each Mortgage Loan or the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.

                                       D-1

<PAGE>

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                        U.S. BANK NATIONAL ASSOCIATION, as
                                        Trustee

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

                                       D-2

<PAGE>

                                   EXHIBIT E-1

                    FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT

                                     [DATE]

U.S. Bank National Association
60 Livingston Avenue
Mail Code EP-MN-WS3D
St. Paul, Minnesota 55107-2292
Attention: Structured Finance/SURF 2007-BC1

Ladies and Gentlemen:

     We propose to purchase the Specialty Underwriting and Residential Finance
Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-BC1, Class R
Certificate, described in the Prospectus Supplement, dated January 22, 2007, and
Prospectus, dated September 8, 2006.

     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 or other arrangement
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a plan subject to Section 4975 of the 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 (each, a "Plan"), and are not directly
or indirectly acquiring the Class R Certificate for, 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 Agreement.

                                      E-1-2

<PAGE>

     7.We hereby designate ___________________ as our fiduciary to act as
the tax matters person for each of the REMICs provided for in the Agreement.

                                        Very truly yours,

                                        [PURCHASER]

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

Accepted as of _________ __, 200_.

MERRILL LYNCH MORTGAGE INVESTORS, INC.

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

                                      E-1-3

<PAGE>

                                   APPENDIX A

                                        Affidavit pursuant to (i) Section
                                        860E(e)(4) of the Internal Revenue Code
                                        of 1986, as amended, and (ii) certain
                                        provisions of the Pooling and Servicing
                                        Agreement

Under penalties of perjury, the undersigned declares that the following is true:

(1)  He or she is an officer of ____________________________ (the "Transferee"),

(2)  the Transferee's Employer Identification number is ______________________,

(3)  the Transferee is not a "disqualified organization" (as defined below), has
     no plan or intention of becoming a disqualified organization, and is not
     acquiring any of its interest in the Specialty Underwriting and Residential
     Finance Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-BC1,
     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 Merrill Lynch Mortgage
     Investors, Inc. (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 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

                                      E-1-4

<PAGE>

     (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 1.860E1(c)(5) and such transfer will not be a
          direct or indirect transfer to a foreign permanent establishment
          (within the meaning of an applicable income tax treaty) of a domestic
          corporation.

For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]

(12) The Transferee will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.

                                      E-1-5

<PAGE>

For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).

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

By:
    ---------------------------------
    ---------------------------------

Address of Investor for receipt of distribution:

Address of Investor for receipt of tax information:

(Corporate Seal)

Attest:

-------------------------------------
                          , Secretary
--------------------------

                                      E-1-6

<PAGE>

Personally appeared before me the above-named ____________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
____________ of the Investor, and acknowledged to me that he executed the same
as his free act and deed and the free act and deed of the Investor.

Subscribed and sworn before me this ____ day of _______, 200_.

_____________________________________
Notary Public

County of ______________________________

State of _______________________________

My commission expires the __________________________ day of _________

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

Dated:
       -----------------------------

                                      E-1-7

<PAGE>

                                   EXHIBIT E-2

                         FORM OF TRANSFEROR'S AFFIDAVIT

                                     [DATE]

U.S. Bank National Association
60 Livingston Avenue
Mail Code EP-MN-WS3D
St. Paul, Minnesota 55107-2292
Attention: Structured Finance/SURF 2007-BC1

Re:  Specialty Underwriting and Residential Finance Trust, Mortgage Loan
     Asset-Backed Certificates, Series 2007-BC1

     ____________________________ (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 FOR CLASS
                           P AND CLASS C CERTIFICATES

U.S. Bank National Association
60 Livingston Avenue
Mail Code EP-MN-WS3D
St. Paul, Minnesota 55107-2292
Attention: Structured Finance/SURF 2007-BC1

Re:  Specialty Underwriting and Residential Finance Trust, Mortgage Loan
     Asset-Backed Certificates, Series 2007-BC1

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 January 1,
2007, among Merrill Lynch Mortgage, Inc., as depositor, Wilshire Credit
Corporation, as servicer, and U.S. Bank National Association, as trustee.

                                        Very truly yours,

                                        ----------------------------------------
                                        Name of Transferor

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

                                       F-1

<PAGE>

                                    EXHIBIT G

                            FORM OF INVESTMENT LETTER
                              (ACCREDITED INVESTOR)

                                     [DATE]

U.S. Bank National Association
60 Livingston Avenue
Mail Code EP-MN-WS3D
St. Paul, Minnesota 55107-2292
Attention: Structured Finance/SURF 2007-BC1

Re:  Specialty Underwriting and Residential Finance Trust, Mortgage Loan
     Asset-Backed Certificates, Series 2007-BC1

Ladies and Gentlemen:

     ____________________________ (the "Purchaser") intends to purchase from
__________ (the "Transferor") $ ________ by original principal balance (the
"Transferred Certificates") of Mortgage Loan Asset-Backed Certificates, Series
2007-BC1 (the "Certificates"), issued pursuant to a Pooling and Servicing
Agreement, dated as of January 1, 2007 (the "Pooling and Servicing Agreement"),
among Merrill Lynch Mortgage Investors, Inc., as depositor (the "Depositor"),
Wilshire Credit Corporation, as servicer (the "Servicer"), and U.S. Bank
National Association, as trustee (the "Trustee"). [THE PURCHASER INTENDS TO
REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF
____________________________, AS NOMINEE FOR ________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.

     For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:

     1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (1) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.

     2. The Certificates will bear a legend to the following effect:

     THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
"1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT, DIRECTLY OR
INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR SALE, UNLESS SUCH
TRANSFER IS NOT SUBJECT TO REGISTRATION UNDER THE ACT, THE 1940 ACT AND ANY
APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES WITH THE OTHER
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT. NO TRANSFER
OF THIS CERTIFICATE SHALL BE MADE UNLESS

                                       G-1

<PAGE>

THE TRUSTEE SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE (A) AN INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B)
REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE OFFERING AND SALE OF THE
CERTIFICATES.

     3. All Certificates other than ERISA Restricted Certificates and Class R
Certificates will bear a legend to the following effect:

     UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS
CERTIFICATE SHALL BE DEEMED TO REPRESENT (OR IN THE CASE OF A DEFINITIVE
CERTIFICATE, SHALL REPRESENT) TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT,
AND IS NOT ACTING FOR, ON BEHALF OF OR WITH ANY ASSETS OF, ANY EMPLOYEE BENEFIT
PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR ANY PLAN SUBJECT TO SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B) THE
TRANSFEREE'S ACQUISITION AND HOLDING OF THIS CERTIFICATE IS COVERED BY AND
EXEMPT UNDER ANY OF SECTION 408(B)(17) OF ERISA OR SECTION 4975(D)(20) OF THE
CODE, PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 84-14, PTCE 90-1, PTCE
91-38, PTCE 95-60, PTCE 96-23, EACH AS AMENDED.

     4. All ERISA Restricted Certificates will bear a legend to the following
effect:

     NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED (A) A REPRESENTATION FROM THE TRANSFEREE THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
PLAN SUBJECT TO ANY STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW")
(COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF THE
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING
THE CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT," AS
DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
95-60, AND THE ACQUISITION AND HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT
UNDER SECTIONS I AND III OF PTCE 95-60, OR (C) SOLELY IN THE EVENT THE
CERTIFICATE IS A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO
THE TRUSTEE, AND UPON WHICH THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE ACQUISITION AND HOLDING OF THE CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION
4975 OF THE CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, 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 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.

                                       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. Either (i) the Purchaser of a Certificate that is neither an ERISA
Restricted Certificate nor a Class R Certificate is not, and is not acting for,
on behalf of or with any assets of, an employee benefit plan or other
arrangement subject to Title I of ERISA or plan subject to Section 4975 of the
Code, or (ii) until the termination of the Swap Agreement, such Purchaser's
acquisition and holding of such Certificates are eligible for exemptive relief
under any of Section 408(b)(17) of ERISA or Section 4975(d)(20) of the Code,
Prohibited Transaction Class Exemption ("PTCE") 84-14, PTCE 90-1, PTCE 91-38,
PTCE 95-60 or PTCE 96-23

     9. The Purchaser (A) is not an employee benefit plan or other arrangement
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code"), or a plan subject to any state, local,
federal, non-U.S. or other law substantively similar to the foregoing provisions
of ERISA or the Code ("Similar Law") (collectively, "Plan"), and is not directly
or indirectly acquiring the Certificate for, on behalf of, or with any assets of
any such Plan, (B) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, 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 any such Certificate that
is a Definitive Certificate, will deliver herewith 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

----------
**/  Not required of a broker/dealer purchaser.

                                       G-3

<PAGE>

of the Code, or a violation of Similar Law, and will not subject the Trustee,
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 Servicer or the Depositor.

     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 G 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]

U.S. Bank National Association
60 Livingston Avenue
Mail Code EP-MN-WS3D
St. Paul, Minnesota 55107-2292
Attention: Structured Finance/SURF 2007-BC1

Re:  Specialty Underwriting and Residential Finance Trust, Mortgage Loan
     Asset-Backed Certificates, Series 2007-BC1

Ladies and Gentlemen:

     ____________________________ (the "Purchaser") intends to purchase from
______________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Mortgage Loan Asset-Backed Certificates, Series
2007-BC1 (the "Certificates"), issued pursuant to a Pooling and Servicing
Agreement, dated as of January 1, 2007 (the "Pooling and Servicing Agreement'),
among Merrill Lynch Mortgage Investors, Inc., as depositor (the "Depositor"),
Wilshire Credit Corporation, as servicer (the "Servicer"), and U.S. Bank
National Association, as trustee (the "Trustee"). [THE PURCHASER INTENDS TO
REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF ______________ AS NOMINEE
FOR ______________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.

     For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Purchaser certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:

In connection with our acquisition of the above Transferred Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act'), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d) solely in the case of a
Certificate other than an ERISA Restricted Certificate or Class R Certificate,
either (i) we are not, and are not acquiring the Certificate for, on behalf of
or with any assets of, any employee benefit plan or other arrangement subject to
Title I of ERISA or any plan subject to Section 4975 of the Code, or (ii) until
the termination of the Swap Agreement, our acquisition and holding of the
Certificate is covered by and exempt under any of Section 408(b)(17) of ERISA or
Section 4975(d)(20) of the Code, Prohibited Transaction Class Exemption ("PTCE")
84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, or PTCE 96-23, (e) we (A) are not an
employee benefit plan or other arrangement subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), a plan subject to
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), or a
plan subject to any state, local, federal,

                                       H-1

<PAGE>

non-U.S. or other law substantively similar to the foregoing provisions of ERISA
or the Code ("Similar Law") (collectively, "Plan"), and are not directly or
indirectly acquiring the Certificate for, on behalf of, or with any assets of
any such Plan, (B) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, 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 a
Definitive Certificate, shall 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 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 Servicer or the
Depositor, (f) 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, and (g) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed one of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale of the Transferred Certificates to us is being made in
reliance on Rule 144A. We are acquiring the Transferred Certificates for our own
account or for resale pursuant to Rule 144A and further understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed by us, based upon certifications of such purchaser or
information we have in our possession, to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.

     We agree to indemnify the Trustee, the Servicer and the Depositor against
any liability that may result from any misrepresentation made herein.

                                        Very truly yours,

                                        [PURCHASER]

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

                                       H-2

<PAGE>

                                                                         ANNEX 1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]

     The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

     1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.

     2. In connection with the purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $____________* in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.

          ___  Corporation, etc. The Buyer is a corporation (other than a bank,
               savings and loan association or similar institution),
               Massachusetts or similar business trust, partnership, or
               charitable organization described in Section 501(c)(3) of the
               Internal Revenue Code of 1986, as amended.

          ___  Bank. The Buyer (a) is a national bank or banking institution
               organized under the laws of any State, territory or the District
               of Columbia, the business of which is substantially confined to
               banking and is supervised by Federal, State or territorial
               banking commission or similar official or is a foreign bank or
               equivalent institution, and (b) has an audited net worth of at
               least $25,000,000 as demonstrated in its latest annual financial
               statements, a copy of which is attached hereto.

          ___  Savings and Loan. The Buyer (a) is a savings and loan
               association, building and loan association, cooperative bank,
               homestead association or similar institution, which is supervised
               and examined by a State or Federal authority having supervision
               over such institution or is a foreign savings and loan
               association or equivalent institution and (b) has an audited net
               worth of at least $25,000,000 as demonstrated in its latest
               annual financial statements, a copy of which is attached hereto.

          ___  Broker-dealer. The Buyer is a dealer registered pursuant to
               Section 15 of the Securities Exchange Act of 1934, as amended.

          ___  Insurance Company. The Buyer is an insurance company whose
               primary and predominant business activity is the writing of
               insurance or the reinsuring of risks underwritten by insurance
               companies and which is

----------
*    Buyer must own and/or invest on a discretionary basis at least $100,000,000
     in securities unless Buyer is a dealer, and, in that case, Buyer must own
     and/or invest on a discretionary basis at least $10,000,000 in securities.

                                       H-3

<PAGE>

               subject to supervision by the insurance commissioner or a similar
               official or agency of the State, territory or the District of
               Columbia.

          ___  State or Local Plan. The Buyer is a plan established and
               maintained by a State, its political subdivisions, or any agency
               or instrumentality of the State or its political subdivisions,
               for the benefit of its employees.

          ___  ERISA Plan. The Buyer is an employee benefit plan subject to
               Title I of the Employee Retirement Income Security Act of 1974,
               as amended.

          ___  Investment Advisor. The Buyer is an investment advisor registered
               under the Investment Advisors Act of 1940, as amended.

          ___  Small Business Investment Company. Buyer is a small business
               investment company licensed by the U.S. Small Business
               Administration under Section 301 (c) or (d) of the Small Business
               Investment Act of 1958, as amended.

          ___  Business Development Company. Buyer is a business development
               company as defined in Section 202(a)(22) of the Investment
               Advisors Act of 1940, as amended.

     3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.

     4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

     5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

                                       H-4

<PAGE>

     6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

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

                                       H-5

<PAGE>

                                                                         ANNEX 2

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]

     The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

     1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.

     2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (1) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

          ___  The Buyer owned $ securities (other than the excluded securities
               referred to below) as of the end of the Buyer's most recent
               fiscal year (such amount being calculated in accordance with Rule
               144A).

          ___  The Buyer is part of a Family of Investment Companies which owned
               in the aggregate $_______ in securities (other than the excluded
               securities referred to below) as of the end of the Buyer's most
               recent fiscal year (such amount being calculated in accordance
               with Rule 144A).

     3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

     4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.

     5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.

                                       H-6

<PAGE>

     6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.

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

                                        IF AN ADVISER:

                                        ----------------------------------------
                                        Print Name of Buyer
                                        Date:
                                              ----------------------------------

                                       H-7
<PAGE>

                                    EXHIBIT I

                        REQUEST FOR RELEASE OF DOCUMENTS

To: U.S. Bank National Association
    1133 Rankin Street, Suite 100
    St. Paul, Minnesota 55116
    Attention: Document Custody Services/SURF 2007-BC1

With a Copy to:

    U.S. Bank National Association
    60 Livingston Avenue
    Mail Code EP-MN-WS3D
    St. Paul, Minnesota 55107-2292
    Attention: Structured Finance/SURF 2007-BC1

Re: Pooling and Servicing Agreement, dated as of January 1, 2007, among Merrill
    Lynch Mortgage Investors, Inc., as depositor, Wilshire Credit Corporation,
    as servicer, and U.S. Bank National Association, as trustee, relating to
    Specialty Underwriting and Residential Finance Trust, Mortgage Loan
    Asset-Backed Certificates, Series 2007-BC1

     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:

                                       I-1

<PAGE>

                                        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.

If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.

Trustee

U.S. Bank National Association

Please acknowledge the execution of the above request by your signature and date
below:

-------------------------------------   ----------------------------------------
Signature                               Date

Documents returned to Trustee:

-------------------------------------   ----------------------------------------
Trustee                                 Date

                                      I-2

<PAGE>

                                    EXHIBIT J

                            FORM OF POWER OF ATTORNEY

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
WILSHIRE CREDIT CORPORATION
14523 S.W. Millikan Way
Suite 200
Beaverton, Oregon 97005
Attn: _______________________________

                            LIMITED POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that U.S. Bank National Association, having
its principal place of business at 60 Livingston Avenue, Mail Code EP-MN-WS3D,
St. Paul, Minnesota 55107-2292, as Trustee (the "Trustee") pursuant to that
Pooling and Servicing Agreement among Merrill Lynch Mortgage Investors, Inc.
(the "Depositor"), Wilshire Credit Corporation (the "Servicer"), and the
Trustee, dated as of January 1, 2007 (the "Pooling and Servicing Agreement"),
hereby constitutes and appoints the Servicer, by and through the Servicer's
officers, the Trustee's true and lawful Attorney-in-Fact, in the Trustee's name,
place and stead and for the Trustee's benefit, in connection with all mortgage
loans serviced by the Servicer pursuant to the Pooling and Servicing Agreement
for the purpose of performing all acts and executing all documents in the name
of the Trustee as may be customarily and reasonably necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust",
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer, all subject to the terms of the Pooling and Servicing Agreement. This
appointment shall apply to the following enumerated transactions only:

1.   The modification or re-recording of a Mortgage or Deed of Trust, where said
     modification or re-recordings is for the purpose of correcting the Mortgage
     or Deed of Trust to conform same to the original intent of the parties
     thereto or to correct title errors discovered after such title insurance
     was issued and said modification or re-recording, in either instance, does
     not adversely affect the lien of the Mortgage or Deed of Trust as insured.

2.   The subordination of the lien of a Mortgage or Deed of Trust to a lien that
     is replacing a lien existing as of the date of the Mortgage or Deed of
     Trust or an easement in favor of a public utility company of a government
     agency or unit with powers of eminent domain; this section shall include,
     without limitation, the execution of partial satisfactions/releases,
     partial reconveyances or the execution or requests to trustees to
     accomplish same.

3.   The conveyance of the properties to the mortgage insurer, or the closing of
     the title to the property to be acquired as real estate owned, or
     conveyance of title to real estate owned.

4.   The completion of loan assumption agreements.

                                      J-1

<PAGE>

5.   The full satisfaction/release of a Mortgage or Deed of Trust or full
     conveyance upon payment and discharge of all sums secured thereby,
     including, without limitation, cancellation of the related Mortgage Note.

6.   The assignment of any Mortgage or Deed of Trust and the related Mortgage
     Note, in connection with the repurchase of the mortgage loan secured and
     evidenced thereby.

7.   The full assignment of a Mortgage or Deed of Trust upon payment and
     discharge of all sums secured thereby in conjunction with the refinancing
     thereof, including, without limitation, the assignment of the related
     Mortgage Note.

8.   With respect to a Mortgage or Deed of Trust, the foreclosure, the taking of
     a deed in lieu of foreclosure, or the completion of judicial or
     non-judicial foreclosure or termination, cancellation or rescission of any
     such foreclosure, including, without limitation, any and all of the
     following acts:

          (a) the substitution of trustee(s) serving under a Deed of Trust, in
          accordance with state law and the Deed of Trust;

          (b) the preparation and issuance of statements of breach or
          non-performance;

          (c) the preparation and filing of notices of default and/or notices of
          sale;

          (d) the cancellation/rescission of notices of default and/or notices
          of sale;

          (e) the taking of a deed in lieu of foreclosure; and

          (f) the preparation and execution of such other documents and
          performance of such other actions as may be necessary under the terms
          of the Mortgage, Deed of Trust or state law to expeditiously complete
          said transactions in paragraphs 8(a) through 8(e), above.

The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.

Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.

                                       J-2

<PAGE>

     IN WITNESS WHEREOF, U.S. Bank National Association, as Trustee pursuant to
that Pooling and Servicing Agreement among the Depositor, the Servicer, and the
Trustee, dated as of January 1, 2007 (Specialty Underwriting and Residential
Finance Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-BC1), has
caused its corporate seal to be hereto affixed and these presents to be signed
and acknowledged in its name and behalf by ____________ its duly elected and
authorized ____________ this _____ day of ____________, 200__.

                                        U.S. BANK NATIONAL ASSOCIATION
                                        as Trustee for Specialty Underwriting
                                        and Residential Finance Trust, Mortgage
                                        Loan Asset-Backed Certificates, Series
                                        2007-BC1

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

STATE OF ______________

COUNTY OF _____________

     On ______________ _________, 200__, before me, the undersigned, a Notary
Public in and for said state, personally appeared _________________,
_________________ of U.S. Bank National Association as Trustee for Specialty
Underwriting and Residential Finance Trust, Mortgage Loan Asset-Backed
Certificates, Series 2007-BC1, personally known to me to be the person whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed that same in his/her authorized capacity, and that by his/her signature
on the instrument the entity upon behalf of which the person acted and executed
the instrument.

WITNESS my hand and official seal.

(SEAL)

--------------------------------------
Notary Public

My Commission Expires ________________

                                       J-3

<PAGE>

                                    EXHIBIT K

                    FORM OF OFFICER'S CERTIFICATE OF TRUSTEE

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wilshire Credit Corporation
14523 SW Millikan Way
Suite 200
Beaverton, Oregon 97005

Re:  Pooling and Servicing Agreement (the "Agreement") dated as of January 1,
     2007 among Merrill Lynch Mortgage Investors, Inc., as depositor, Wilshire
     Credit Corporation, as servicer and U.S. Bank National Association, as
     trustee, relating to Specialty Underwriting and Residential Finance Trust,
     Mortgage Loan Asset-Backed Certificates, Series 2007-BC1

          The Trustee hereby certifies to the Depositor, the Servicer and their
officers, directors and Affiliates, and with the knowledge and intent that they
will rely upon this certification, that:

          (1) I have reviewed the annual report on Form 10-K for the fiscal year
[2007] (the "Annual Report"), and all reports on Form 8-K (if any) and on Form
10-D required to be filed in respect of the period covered by the Annual Report
(collectively with the Annual Report, the "Reports"), of the Issuing Entity;

          (2) To the best of my knowledge, and assuming the accuracy of the
statements required to be made or data required to be delivered by the Servicer
and Depositor (to the extent that such statements or data were received by the
Trustee and are relevant to the statements made by the Trustee in this Back-Up
Certification), the information in the Reports, 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 with respect to the period covered by
the Annual Report;

          (3) To the best of my knowledge, and assuming the accuracy of the
statements required to be made or data required to be delivered by the Servicer
and Depositor (to the extent that such statements or data were received by the
Trustee and are relevant to the statements made by the Trustee in this Back-Up
Certification), the distribution and any other information required to be
provided by the Trustee to the Depositor and each Servicer under the Pooling and
Servicing Agreement for inclusion in the Reports is included in the Reports;

          (4) The report on assessment of compliance (the "Assessment of
Compliance') with servicing criteria for asset-backed securities of the Trustee
and its related attestation report (the "Attestation Report") on assessment of
compliance with servicing criteria required to be included in the Annual Report
in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and
15d-18 has been included as an exhibit to the Annual Report. Any material
instances of non-compliance of the Trustee are described in such report and have
been disclosed in the Annual Report;

                                       K-1

<PAGE>

          (5) A review of the Trustee's activities during the preceding calendar
year or portion thereof and of such Trustee's performance of its distribution
and calculation activities under the Agreement has been made under my
supervision. Based on my knowledge, based on such review, the Trustee has
fulfilled all its obligations with respect to such distribution and calculation
activities under the Agreement, in all material respects throughout the year or
applicable portion thereof, or, if there has been a failure to fulfill any such
obligation in any material respect, the Trustee has specified each such failure
known to such officer and the nature and status thereof; and

          (6) Based on my knowledge, and assuming the accuracy of the statements
required to be made or data required to be delivered by the Servicer and
Depositor (to the extent that such statements or data were received by the
Trustee and are relevant to the statements made by the Trustee in this Back-Up
Certification), the Assessment of Compliance and the related Attestation Report,
taken as a whole, do not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in the light of
the circumstances under which such statements were made, not misleading with
respect to the period of time covered by the Assessment of Compliance and the
related Attestation Report.

Date:
      -------------------

                                        U.S. Bank National Association, as
                                        Trustee

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

                                       K-2

<PAGE>

                                    EXHIBIT L

                    FORM OF OFFICER'S CERTIFICATE OF SERVICER

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

     Re:  Specialty Underwriting and Residential Finance Trust, Mortgage Loan
          Asset-Backed Certificates, Series 2007-BC1

          Wilshire Credit Corporation (the "Servicer") certifies to the
Depositor and the Trustee, and their officers, directors and Affiliates, and
with the knowledge and intent that they will rely upon this certification, that:

          (1) I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and I have reviewed, or
persons under my supervision have reviewed, the servicer compliance statement of
the Servicer and the compliance statements of each Subservicer, if any, engaged
by the Servicer provided to the Depositor and the Trustee for the Issuing
Entity's fiscal year [___] in accordance with Item 1123 of Regulation AB (each a
"Compliance Statement"), the report on assessment of the Servicer's compliance
with the servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria") and reports on Assessment of Compliance with servicing
criteria for asset-backed securities of the Servicer and of each Subservicer [or
Subcontractor], if any, engaged or utilized by the Servicer provided to the
Depositor and the Trustee for the Issuing Entity's fiscal year [___] in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934,
as amended (the "Exchange Act") and Item 1122 of Regulation AB (each a
"Servicing Assessment"), the registered public accounting firm's attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB related to each Servicing Assessment
(each a "Attestation Report"), and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage Loans by the
Servicer during 200[ ] that were delivered or caused to be delivered by the
Servicer pursuant to the Agreement (collectively, the "Servicing Information");

          (2) Based on my knowledge, and assuming the accuracy of the
information provided to the Servicer in connection with the performance of the
Servicer's duties under the Pooling and Servicing Agreement and the accuracy of
the information provided to the Servicer in connection with the transfer of
servicing of the Mortgage Loans to the Servicer, the Servicing Information,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in the
light of the circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Servicing Information;

          (3) Based on my knowledge, the servicing information required to be
provided to the Trustee by the Servicer pursuant to the Pooling and Servicing
Agreement has been provided to the Trustee;

          (4) Based on my knowledge and the compliance review conducted in
preparing Compliance Statement of the Servicer and, if applicable, reviewing
each Compliance Statement of each Subservicer, if any, engaged by the Servicer,
and except as disclosed in such Compliance Statement[(s)], the Servicer
[(directly and through its Subservicers, if any)] has fulfilled its obligations
under the Pooling and Servicing Agreement in all material respects;

                                       L-1

<PAGE>

          (5) Each Servicing Assessment of the Servicer and of each Subservicer
[or Subcontractor], if any, engaged or utilized by the Servicer and its related
Attestation Report required to be included in the Annual Report in accordance
with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has
been provided to the Depositor and the Trustee. Any material instances of
non-compliance are described in any such Servicing Assessment or Attestation
Report.

Date:
      -------------------

                                        Wilshire Credit Corporation,
                                        as Servicer

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

                                       L-2

<PAGE>

                                    EXHIBIT M

                                   [RESERVED]

                                       M-1

<PAGE>

                                    EXHIBIT N

                           FORM OF AUCTION PROCEDURES

     The following sets forth the auction procedures to be followed in
connection with Pooling and Servicing Agreement (the "Agreement") among Merrill
Lynch Mortgage Investors, Inc., U.S. Bank National Association as trustee and
Wilshire Credit Corporation, dated January 1, 2007. Capitalized terms used
herein that are not otherwise defined shall have the meanings described thereto
in the Agreement.

1.   Upon notice that the aggregate Stated Principal Balance of the Mortgage
     Loans is equal to ten percent (10%) or less of the Stated Principal Balance
     of the Mortgage Loans as of the Cut-off Date (which notice will also be
     sent to the Servicer), the Trustee will initiate the general auction
     procedures consisting of the following: (i) prepare a general solicitation
     package along with a confidentiality agreement; (ii) derive a list of
     bidders which shall include (x) the Holders of the Class C and Class P
     Certificates (other than the Sponsor or any Affiliate of the Sponsor) and
     (y) a minimum of three (3) bidders including the Holders of the Class C
     Certificates but not including the holders of the Class P Certificates,
     each of whom shall be a nationally recognized participant in mortgage
     finance; (iii) initiate contact with all bidders, (iv) send a
     confidentiality agreement to all bidders; and (v) upon receipt of a signed
     confidentiality agreement, send the general bid solicitation package to all
     bidders.

2.   The general solicitation package will include (i) the Agreement; (ii) a
     copy of all monthly trustee reports or electronic access thereto; (iii) a
     form of a Mortgage Loan Purchase Agreement acceptable to the Trustee, the
     Servicer and Depositor (the Mortgage Loans and other property included in
     the Trust Fund will be offered and sold on an "as is, where is" basis,
     without any representation or warranty, expressed or implied, of any kind
     and without recourse to, or guaranty by, the Trustee); (iv) a description
     of the minimum price as set forth in the Agreement; (v) a formal bid sheet
     as determined by the Depositor and accepted by the Trustee; (vi) a detailed
     timetable (which shall include, but not be limited to, the provisions and
     dates preliminary bids, due diligence and final bids); and (vii) a data
     tape of the Mortgage Loans as of the related Remittance Period reflecting
     substantially the same data attributes used in the Prospectus Supplement
     dated January 22, 2007.

3.   A detailed timetable will be determined approximately ten (10) days prior
     to each auction sale and shall be determined by the Depositor with the
     consent of the Trustee, which consent shall not be unreasonably withheld,
     within reasonable market conditions at the time of the auction sale.

4.   All bids will be submitted directly to the Trustee. Upon acceptance of a
     bid which meets or exceeds the conditions set forth in Section 9.01, the
     Trustee will complete the auction by selling the Mortgage Loans and the
     other property included in the Trust Fund and distribute the proceeds from
     the auction to the holders of the Certificates on the next succeeding
     Distribution Date as set forth in the Agreement. In the event the Trustee
     receives two (2) or more bids from bidders above the Auction Termination
     Price and at equal bids (a "Tie Event"), the Trustee shall notify such
     bidders to resubmit a bid to break the Tie Event.

5.   Upon determination that the minimum price was not met, the Trustee shall
     cancel such auction sale and notify the Servicer and Depositor immediately.

6.   The Trustee, the Servicer and the Depositor may mutually agree to revise or
     supplement these provisions as necessary, provided that the purchase price
     is at all times required to be at least the Auction Termination Price.

                                       N-1

<PAGE>

                                  EXHIBIT O-1

                         FORM OF CLASS A-1 CAP CONTRACT

DATE:             JANUARY 24, 2007

TO:               U.S. Bank National Association, in its capacity as Trustee
                  with respect to Specialty Underwriting and Residential
                  Finance Trust, Series 2007-BC1 (the "Trustee")

                  60 Livingston Avenue,

                  Mail Code EP-MN-WS3D

                  St. Paul, Minnesota 55107-2292

                  Attention: Structured Finance/SURF 2007-BC1

FROM:             SWISS RE FINANCIAL PRODUCTS CORPORATION

SUBJECT:          Fixed Income Derivatives Confirmation

REFERENCE NUMBER: 1234429

The purpose of this long-form confirmation ("CONFIRMATION") is to confirm the
terms and conditions of the current Transaction entered into on the Trade Date
specified below (the "TRANSACTION") between Swiss Re Financial Products
Corporation ("PARTY A") and U.S. Bank National Association, in its capacity as
trustee with respect to Specialty Underwriting and Residential Finance, Series
2007-BC1 (the "Trustee") ("PARTY B") created under the Pooling and Servicing
Agreement, dated as of January 1, 2007, among Party A and Party B (the "POOLING
AND SERVICING AGREEMENT"). This Confirmation evidences a complete and binding
agreement between you and us to enter into the Transaction on the terms set
forth below and replaces any previous agreement between us with respect to the
subject matter hereof. This Confirmation constitutes a "CONFIRMATION" and also
constitutes a "SCHEDULE" as referred to in the ISDA Master Agreement, and
Paragraph 13 of a Credit Support Annex to the Schedule.

1.   This Confirmation shall supplement, form a part of, and be subject to an
     agreement in the form of the ISDA Master Agreement (Multicurrency - Cross
     Border) as published and copyrighted in 1992 by the International Swaps and
     Derivatives Association, Inc. (the "ISDA MASTER AGREEMENT"), as if Party A
     and Party B had executed an agreement in such form on the date hereof, with
     a Schedule as set forth in Item 3 of this Confirmation, and an ISDA Credit
     Support Annex (Bilateral Form - ISDA Agreements Subject to New York Law
     Only version) as published and copyrighted in 1994 by the International
     Swaps and Derivatives Association, Inc., with Paragraph 13 thereof as set
     forth in Annex A hereto (the "CREDIT SUPPORT ANNEX"). For the avoidance of
     doubt, the Transaction described herein shall be the sole Transaction
     governed by such ISDA Master Agreement. In the event of any inconsistency
     among any of the following documents, the relevant document first listed
     shall govern: (i) this Confirmation, exclusive of the provisions set forth
     in Item 3 hereof and Annex A hereto; (ii) the provisions set forth in Item
     3 hereof, which are incorporated by reference into the Schedule; (iii) the
     Credit Support Annex; (iv) the Definitions; and (v) the ISDA Master
     Agreement.

                                      O-1-1

<PAGE>

     Each reference herein to a "Section" (unless specifically referencing the
     Pooling and Servicing Agreement) or to a "Section" "of this Agreement" will
     be construed as a reference to a Section of the ISDA Master Agreement; each
     herein reference to a "Part" will be construed as a reference to the
     provisions herein deemed incorporated in a Schedule to the ISDA Master
     Agreement; each reference herein to a "Paragraph" will be construed as a
     reference to a Paragraph of the Credit Support Annex.

2.   The terms of the particular Transaction to which this Confirmation relates
     are as follows:

<TABLE>
<S>                           <C>
Type of Transaction:          Interest Rate Cap

Notional Amount:              With respect to any Calculation Period, the lesser
                              of: (i) the amount set forth on Schedule I
                              attached hereto for such Calculation Period
                              and(ii) the Class Certificate Principal Balance of
                              the Class A-1 Certificates (as defined in the
                              Pooling and Servicing Agreement) for such Floating
                              Rate Payer Payment Date. The Trustee under the
                              Pooling and Servicing Agreement shall provide at
                              least five (5) business days notice prior to each
                              Floating Rate Payer Payment Date for each
                              Calculation Period to Party A if the Class
                              Certificate Principal Balance of the Class A-1
                              Certificates is less than the Schedule I attached
                              hereto.

Trade Date:                   January 11, 2007

Effective Date:               January 24, 2007

Termination Date:             July 25, 2007, subject to adjustment in accordance
                              with the Business Day Convention

Fixed Amounts:

   Fixed Rate Payer:          Party B

   Fixed Amount:              Not applicable

Floating Amounts:

   Floating Rate Payer:       Party A

   Cap Rate:                  With respect to any Calculation Period, the amount
                              set forth for such period on Schedule I attached
                              hereto

   Floating Rate Payer        The 25th calendar day of each month during the
   Period End Dates:          Term of this Transaction, commencing February 25,
                              2007, and ending on the Termination Date subject
                              to adjustment in accordance with the Business Day
                              Convention.

   Floating Rate Payer        Early payment shall be applicable. The Floating
   Payment Dates:             Rate Payer Payment Date shall be two (2) Business
                              Days prior to each Period End Date, commencing on
                              February 22, 2007

   Floating Rate Option:      USD-LIBOR-BBA; provided, however, for any
                              Calculation Period, if the Floating Rate Option is
                              greater than 10.86%,
</TABLE>

                                      O-1-2

<PAGE>

<TABLE>
<S>                           <C>
                              then the Floating Rate Option for such Calculation
                              Period shall be deemed 10.86%.

   Designated Maturity:       One month

   Floating Rate Day
   Count Fraction:            Actual/360

   Reset Dates:               The first day of each Calculation Period.

   Compounding:               Inapplicable

   Business Days:             New York

   Business Day Convention:   Following

   Calculation Agent:         Party A
</TABLE>

3.   Provisions Deemed Incorporated in a Schedule to the ISDA Master Agreement:

PART 1. TERMINATION PROVISIONS.

For the purposes of this Agreement:-

(a)  "SPECIFIED ENTITY" will not apply to Party A or Party B for any purpose.

(b)  "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.

(c)  EVENTS OF DEFAULT.

     The statement below that an Event of Default will apply to a specific party
     means that upon the occurrence of such an Event of Default with respect to
     such party, the other party shall have the rights of a Non-defaulting Party
     under Section 6 of this Agreement; conversely, the statement below that
     such event will not apply to a specific party means that the other party
     shall not have such rights.

     (i)  The "FAILURE TO PAY OR DELIVER" provisions of Section 5(a)(i) will
          apply to Party A and will apply to Party B; provided, however, that
          Section 5(a)(i) is hereby amended by replacing the word "third" with
          the word "first"; provided, further, that notwithstanding anything to
          the contrary in Section 5(a)(i), any failure by Party A to comply with
          or perform any obligation to be complied with or performed by Party A
          under the Credit Support Annex shall not constitute an Event of
          Default under Section 5(a)(i) unless (A) a Required Ratings Downgrade
          Event has occurred and been continuing for 30 or more Local Business
          Days and (B) such failure is not remedied on or before the third Local
          Business Day after notice of such failure is given to Party A.

     (ii) The "BREACH OF AGREEMENT" provisions of Section 5(a)(ii) will apply to
          Party A and will not apply to Party B.

     (iii) The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will
          apply to Party A and will not apply to Party B except that Section
          5(a)(iii)(1) will apply to Party B solely in respect of Party B's
          obligations under Paragraph 3(b) of the Credit Support Annex;
          provided, however, that notwithstanding anything to the contrary in
          Section 5(a)(iii)(1), any failure by Party A to comply with or perform
          any obligation to be complied with or performed by Party A under the
          Credit Support Annex shall not constitute an Event of Default under
          Section 5(a)(iii) unless (A) a Required Ratings Downgrade Event has
          occurred and been continuing for 30 or more Local Business Days and
          (B) such failure is not remedied on or before the third Local Business
          Day after notice of such failure is given to Party A.

                                      O-1-3

<PAGE>

     (iv) The "MISREPRESENTATION" provisions of Section 5(a)(iv) will apply to
          Party A and will not apply to Party B.

     (v)  The "DEFAULT UNDER SPECIFIED TRANSACTION" provisions of Section
          5(a)(v) will apply to Party A and will not apply to Party B.

     (vi) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to Party
          A and will not apply to Party B. For purposes of Section 5(a)(vi),
          solely with respect to Party A:

          "Specified Indebtedness" will have the meaning specified in Section
          14, except that such term shall not include insurance contracts
          entered into in the ordinary course of Party A's Credit Support
          Provider's insurance business.

          "Threshold Amount" means with respect to Party A an amount equal to
          three percent (3%) of the Shareholders' Equity of Party A or, if
          applicable, the Eligible Guarantor.

          "Shareholders' Equity" means with respect to an entity, at any time,
          the sum (as shown in the most recent annual audited financial
          statements of such entity) of (i) its capital stock (including
          preferred stock) outstanding, taken at par value, (ii) its capital
          surplus and (iii) its retained earnings, minus (iv) treasury stock,
          each to be determined in accordance with generally accepted accounting
          principles.

     (vii) The "BANKRUPTCY" provisions of Section 5(a)(vii) will apply to Party
          A and will apply to Party B except that the provisions of Section
          5(a)(vii)(2), (6) (to the extent that such provisions refer to any
          appointment contemplated or effected by the Pooling and Servicing
          Agreement or any appointment to which Party B has not become subject),
          (7) and (9) will not apply to Party B; provided that, with respect to
          Party B only, Section 5(a)(vii)(4) is hereby amended by adding after
          the words "against it" the words "(excluding any proceeding or
          petition instituted or presented by Party A or its Affiliates)", and
          Section 5(a)(vii)(8) is hereby amended by deleting the words "to (7)
          inclusive" and inserting in lieu thereof ", (3), (4) as amended, (5),
          (6) as amended, or (7)".

     (viii) The "MERGER WITHOUT ASSUMPTION" provisions of Section 5(a)(viii)
          will apply to Party A and will apply to Party B.

(d)  TERMINATION EVENTS.

     The statement below that a Termination Event will apply to a specific party
     means that upon the occurrence of such a Termination Event, if such
     specific party is the Affected Party with respect to a Tax Event, the
     Burdened Party with respect to a Tax Event Upon Merger (except as noted
     below) or the non-Affected Party with respect to a Credit Event Upon
     Merger, as the case may be, such specific party shall have the right to
     designate an Early Termination Date in accordance with Section 6 of this
     Agreement; conversely, the statement below that such an event will not
     apply to a specific party means that such party shall not have such right;
     provided, however, with respect to "Illegality" the statement that such
     event will apply to a specific party means that upon the occurrence of such
     a Termination Event with respect to such party, either party shall have the
     right to designate an Early Termination Date in accordance with Section 6
     of this Agreement.

     (i)  The "ILLEGALITY" provisions of Section 5(b)(i) will apply to Party A
          and will apply to Party B.

     (ii) The "TAX EVENT" provisions of Section 5(b)(ii) will apply to Party A
          except that, for purposes of the application of Section 5(b)(ii) to
          Party A, Section 5(b)(ii) is hereby amended by deleting the words "(x)
          any action taken by a taxing authority, or brought in a court of
          competent jurisdiction, on or after the date on which a Transaction is
          entered into (regardless of whether such action is taken or brought
          with respect to a party to this Agreement) or (y)", and the "TAX
          EVENT" provisions of Section 5(b)(ii) will apply to Party B.

                                      O-1-4

<PAGE>

     (iii) The "TAX EVENT UPON MERGER" provisions of Section 5(b)(iii) will
          apply to Party A and will apply to Party B, provided that Party A
          shall not be entitled to designate an Early Termination Date by reason
          of a Tax Event upon Merger in respect of which it is the Affected
          Party.

     (iv) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will not
          apply to Party A and will not apply to Party B.

(e)  The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not apply
     to Party A and will not apply to Party B.

(f)  PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
     Agreement:

     (i)  Market Quotation will apply, provided, however, that, in the event of
          a Derivative Provider Trigger Event, the following provisions will
          apply:

          (A)  The definition of Market Quotation in Section 14 shall be deleted
               in its entirety and replaced with the following:

               "MARKET QUOTATION" means, with respect to one or more Terminated
               Transactions, a Firm Offer which is (1) made by a Reference
               Market-maker that is an Eligible Replacement, (2) for an amount
               that would be paid to Party B (expressed as a negative number) or
               by Party B (expressed as a positive number) in consideration of
               an agreement between Party B and such Reference Market-maker to
               enter into a Replacement Transaction, and (3) made on the basis
               that Unpaid Amounts in respect of the Terminated Transaction or
               group of Transactions are to be excluded but, without limitation,
               any payment or delivery that would, but for the relevant Early
               Termination Date, have been required (assuming satisfaction of
               each applicable condition precedent) after that Early Termination
               Date is to be included.

          (B)  The definition of Settlement Amount shall be deleted in its
               entirety and replaced with the following:

               "SETTLEMENT AMOUNT" means, with respect to any Early Termination
               Date, an amount (as determined by Party B at the written
               direction of the Depositor) equal to:

               (a)  If a Market Quotation for the relevant Terminated
                    Transaction or group of Terminated Transactions is accepted
                    by Party B at the written direction of the Depositor so as
                    to become legally binding on or before the day falling ten
                    Local Business Days after the day on which the Early
                    Termination Date is designated, or such later day as Party B
                    at the written direction of the Depositor may specify in
                    writing to Party A, but in either case no later than one
                    Local Business Day prior to the Early Termination Date (such
                    day, the "Latest Settlement Amount Determination Day"), the
                    Termination Currency Equivalent of the amount (whether
                    positive or negative) of such Market Quotation;

               (b)  If, on the Latest Settlement Amount Determination Day, no
                    Market Quotation for the relevant Terminated Transaction or
                    group of Terminated Transactions has been accepted by Party
                    B at the written direction of the Depositor so as to become
                    legally binding and one or more Market Quotations from
                    Approved Replacements have been made and remain capable of
                    becoming legally binding upon acceptance, the Settlement
                    Amount shall equal the Termination Currency Equivalent of
                    the amount (whether positive or negative) of the lowest of
                    such Market Quotations (for the avoidance of doubt, the
                    lowest of such Market Quotations shall be the lowest Market
                    Quotation of such Market Quotations expressed as a positive
                    number or, if any of such Market Quotations is expressed as
                    a negative number, the Market Quotation expressed as a
                    negative number with the largest absolute value); or

                                      O-1-5

<PAGE>

               (c)  If, on the Latest Settlement Amount Determination Day, no
                    Market Quotation for the relevant Terminated Transaction or
                    group of Terminated Transactions is accepted by Party B so
                    as to become legally binding and no Market Quotation from an
                    Approved Replacement remains capable of becoming legally
                    binding upon acceptance, the Settlement Amount shall equal
                    Party B's Loss (whether positive or negative and without
                    reference to any Unpaid Amounts) for the relevant Terminated
                    Transaction or group of Terminated Transactions.

          (C)  If Party B at the written direction of the Depositor requests
               Party A in writing to obtain Market Quotations, Party A shall use
               its reasonable efforts to do so before the Latest Settlement
               Amount Determination Day.

          (D)  If the Settlement Amount is a negative number, Section 6(e)(i)(3)
               shall be deleted in its entirety and replaced with the following:

               "(3) Second Method and Market Quotation. If the Second Method and
               Market Quotation apply, (I) Party B shall pay to Party A an
               amount equal to the absolute value of the Settlement Amount in
               respect of the Terminated Transactions, (II) Party B shall pay to
               Party A the Termination Currency Equivalent of the Unpaid Amounts
               owing to Party A and (III) Party A shall pay to Party B the
               Termination Currency Equivalent of the Unpaid Amounts owing to
               Party B; provided, however, that (x) the amounts payable under
               the immediately preceding clauses (II) and (III) shall be subject
               to netting in accordance with Section 2(c) of this Agreement and
               (y) notwithstanding any other provision of this Agreement, any
               amount payable by Party A under the immediately preceding clause
               (III) shall not be netted-off against any amount payable by Party
               B under the immediately preceding clause (I)."

          (E)  At any time on or before the Latest Settlement Amount
               Determination Day at which two or more Market Quotations from
               Approved Replacements remain capable of becoming legally binding
               upon acceptance, Party B shall be entitled to accept only the
               lowest of such Market Quotations (for the avoidance of doubt, the
               lowest of such Market Quotations shall be the lowest Market
               Quotation of such Market Quotations expressed as a positive
               number or, if any of such Market Quotations is expressed as a
               negative number, the Market Quotation expressed as a negative
               number with the largest absolute value).

     (ii) The Second Method will apply.

(g)  "TERMINATION CURRENCY" means USD.

(h)  ADDITIONAL TERMINATION EVENTS. Additional Termination Events will apply as
     provided in Part 5(c).

PART 2. TAX MATTERS.

(a)  TAX REPRESENTATIONS.

     (i)  PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this
          Agreement:

          (A)  Party A makes the following representation(s):

               It is not required by any applicable law, as modified by the
               practice of any relevant governmental revenue authority, of any
               Relevant Jurisdiction to make any deduction or withholding for or
               on account of any Tax from any payment (other than interest under
               Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by
               it to the other party under this Agreement. In making this
               representation, it may rely on: the accuracy of any
               representations made by the other party pursuant to Section 3(f)
               of this Agreement; (ii)

                                      O-1-6

<PAGE>

               the satisfaction of the agreement contained in Section 4(a)(i) or
               4(a)(iii) of this Agreement and the accuracy and effectiveness of
               any document provided by the other party pursuant to Section
               4(a)(i) or 4(a)(iii) of this Agreement; and (iii) the
               satisfaction of the agreement of the other party contained in
               Section 4(d) of this Agreement, provided that it shall not be a
               breach of this representation where reliance is placed on clause
               (ii) and the other party does not deliver a form or document
               under Section 4(a)(iii) by reason of material prejudice to its
               legal or commercial position.

          (B)  Party B makes the following representation(s):

               None.

     (ii) PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this
          Agreement:

          (A)  Party A makes the following representation(s):

               Party A represents that it is a corporation organized under the
               laws of the State of Delaware.

          (B)  Party B makes the following representation(s):

               None.

(b)  TAX PROVISIONS.

     (i)  GROSS UP. Section 2(d)(i)(4) shall not apply to Party B as X, and
          Section 2(d)(ii) shall not apply to Party B as Y, in each case such
          that Party B shall not be required to pay any additional amounts
          referred to therein.

     (ii) INDEMNIFIABLE TAX. The definition of "Indemnifiable Tax" in Section 14
          is deleted in its entirety and replaced with the following:

          "INDEMNIFIABLE TAX" means, in relation to payments by Party A, any Tax
          and, in relation to payments by Party B, no Tax.

PART 3. AGREEMENT TO DELIVER DOCUMENTS.

(a)  For the purpose of Section 4(a)(i), tax forms, documents, or certificates
     to be delivered are:

<TABLE>
<CAPTION>
PARTY REQUIRED TO
DELIVER DOCUMENT            FORM/DOCUMENT/CERTIFICATE               DATE BY WHICH TO BE DELIVERED
-----------------   ----------------------------------------   -------------------------------------
<S>                 <C>                                        <C>
Party A             An original properly completed and         (i) upon execution of this Agreement,
                    executed United States Internal Revenue    (ii) on or before the first payment
                    Service Form W-9 including applicable      date under this Agreement, including
                    attachments (or any successor thereto)     any Credit Support Document, (iii)
                    with respect to any payments received or   promptly upon the reasonable demand
                    to be received by Party A that             by Party B, (iv) prior to the
                    eliminates U.S. federal withholding and    expiration or obsolescence of any
                    backup withholding Tax on payments to      previously delivered form, and (v)
                    Party A under this Agreement.              promptly upon the information on any
                                                               such previously delivered form
                                                               becoming inaccurate or incorrect.

Party B             (i) Upon execution of this Agreement, an   (i) upon execution of this Agreement,
                    original properly completed and executed   (ii) on or before the first payment
                    United States Internal Revenue Service     date under this Agreement, including
                    Form                                       any Credit Support
</TABLE>

                                      O-1-7

<PAGE>

<TABLE>
<S>                 <C>                                        <C>
                    W-9 including applicable attachments (or   Document, (iii) promptly upon the
                    any successor thereto) with respect to     reasonable demand by Party A, (iv)
                    any payments received or to be received    prior to the expiration or
                    by the initial beneficial owner of         obsolescence of any previously
                    payments to Party B under this             delivered form, and (v) promptly upon
                    Agreement, and (ii) thereafter, the        the information on any such
                    appropriate tax certification form         previously delivered form becoming
                    (i.e., IRS Form W-9 or IRS Form W-8BEN,    inaccurate or incorrect.
                    W-8IMY, W-8EXP or W-8ECI, as applicable
                    (or any successor form thereto)) with
                    respect to any payments received or to
                    be received by the beneficial owner of
                    payments to Party B under this Agreement
                    from time to time.
</TABLE>

                                      O-1-8

<PAGE>

(b)  For the purpose of Section 4(a)(ii), other documents to be delivered are:

<TABLE>
<CAPTION>
PARTY REQUIRED TO                                                                               COVERED BY SECTION
DELIVER DOCUMENT           FORM/DOCUMENT/CERTIFICATE          DATE BY WHICH TO BE DELIVERED    3(D) REPRESENTATION
-----------------   --------------------------------------   -------------------------------   -------------------
<S>                 <C>                                      <C>                               <C>
Party A and         Any documents required by the            Upon the execution and delivery   Yes
Party B             receiving party to evidence the          of this Agreement
                    authority of the delivering party or
                    its Credit Support Provider, if any,
                    for it to execute and deliver the
                    Agreement, this Confirmation, and any
                    Credit Support Documents to which it
                    is a party, and to evidence the
                    authority of the delivering party or
                    its Credit Support Provider to perform
                    its obligations under the Agreement,
                    this Confirmation and any Credit
                    Support Document, as the case may be

Party A and         A certificate of an authorized officer   Upon the execution and delivery   Yes
Party B             of the party, as to the incumbency and   of this Agreement
                    authority of the respective officers
                    of the party signing the Agreement,
                    this Confirmation, and any relevant
                    Credit Support Document, as the case
                    may be

Party A             Annual Report of Party A's Credit        Promptly upon becoming publicly   Yes
                    Support Provider containing              available
                    consolidated financial statements
                    certified by independent certified
                    public accountants and prepared in
                    accordance with generally accepted
                    accounting principles in the country
                    in which Party A's Credit Support
                    Provider is organized

Party A             Semi Annual Financial Statements of      Promptly upon becoming publicly   Yes
                    Party A's Credit Support Provider        available
                    containing unaudited, consolidated
                    financial statements of Party A's
                    Credit Support Provider's Interim
                    Report prepared in accordance with
                    generally accepted accounting
                    principles in the country in which
                    Party A's Credit Support Provider is
                    organized

Party A             A guarantee of Swiss Re                  Upon the execution and delivery   No
                                                             of this Agreement

Party A             An opinion of counsel to Party A's       Upon the execution and delivery   No
                    Guarantor                                of this Agreement
</TABLE>

                           O-1-9

<PAGE>

PART 4. MISCELLANEOUS.

(a)  ADDRESS FOR NOTICES: For the purposes of Section 12(a) of this Agreement:

     Address for notices or communications to Party A:

     Address:        Swiss Re Financial Products Corporation
                     55 East 52nd Street
                     New York, New York 10055
                     Attention: Head of Operations
                     Facsimile No. (917) 322-7201

     (For all purposes)

     With a copy to: Swiss Re Financial Products Corporation
                     55 East 52nd Street
                     New York, New York 10055
                     Attention: Legal Department
                     Facsimile No.: (212) 317-5474

     Address for notices or communications to Party B:

                     U.S. Bank National Association
                     60 Livingston Avenue,
                     Mail Code EP-MN-WS3D
                     St. Paul, Minnesota 55107-2292
                     Attention: Structured Finance/SURF 2007-BC1

                     with a copy to:

                     Merrill Lynch Mortgage Lending, Inc.
                     650 Third Avenue South
                     Suite 1500
                     St. Paul, MN 55107
                     Attention: Trading Analytics -- SURF 2007-BC1
                     Telephone: 612-336-7300
                     Facsimile: 612-336-7415

                     (For all purposes)

(b)  PROCESS AGENT. For the purpose of Section 13(c):

     Party A appoints as its Process Agent: Not applicable.

     Party B appoints as its Process Agent: Not applicable.

(c)  OFFICES. The provisions of Section 10(a) will apply to this Agreement;
     neither Party A nor Party B has any Offices other than as set forth in the
     Notices Section.

(d)  MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:

     Party A is not a Multibranch Party.

     Party B is not a Multibranch Party.

                                     O-1-10

<PAGE>

(e)  CALCULATION AGENT. The Calculation Agent is Party A; provided, however,
     that if an Event of Default shall have occurred with respect to Party A,
     Party B shall have the right to appoint as Calculation Agent a third party,
     reasonably acceptable to Party A, the cost for which shall be borne by
     Party A.

(f)  CREDIT SUPPORT DOCUMENT.

     Party A: The Credit Support Annex, and any guarantee in support of Party
              A's obligations under this Agreement.

     Party B: The Credit Support Annex, solely in respect of Party B's
              obligations under Paragraph 3(b) of the Credit Support Annex.

(g)  CREDIT SUPPORT PROVIDER.

     Party A: The guarantor under any guarantee in support of Party A's
              obligations under this Agreement.

     Party B: None.

(h)  GOVERNING LAW. The parties to this Agreement hereby agree that the law of
     the State of New York shall govern their rights and duties in whole,
     without regard to the conflict of law provisions thereof other than New
     York General Obligations Law Sections 5-1401 and 5-1402.

(i)  NETTING OF PAYMENTS. The parties agree that subparagraph (ii) of Section
     2(c) will apply to each Transaction hereunder.

(j)  AFFILIATE. "Affiliate" shall have the meaning assigned thereto in Section
     14; provided, however, that Party B shall be deemed to have no Affiliates
     for purposes of this Agreement, including for purposes of Section 6(b)(ii).

PART 5. OTHERS PROVISIONS.

(a)  DEFINITIONS. Unless otherwise specified in a Confirmation, this Agreement
     and each Transaction under this Agreement are subject to the 2000 ISDA
     Definitions as published and copyrighted in 2000 by the International Swaps
     and Derivatives Association, Inc. (the "DEFINITIONS"), and will be governed
     in all relevant respects by the provisions set forth in the Definitions,
     without regard to any amendment to the Definitions subsequent to the date
     hereof. The provisions of the Definitions are hereby incorporated by
     reference in and shall be deemed a part of this Agreement, except that (i)
     references in the Definitions to a "Swap Transaction" shall be deemed
     references to a "Transaction" for purposes of this Agreement, and (ii)
     references to a "Transaction" in this Agreement shall be deemed references
     to a "Swap Transaction" for purposes of the Definitions. Each term
     capitalized but not defined in this Agreement shall have the meaning
     assigned thereto in the Pooling and Servicing Agreement.

(b)  AMENDMENTS TO ISDA MASTER AGREEMENT.

     (i)  SINGLE AGREEMENT. Section 1(c) is hereby amended by the adding the
          words "including, for the avoidance of doubt, the Credit Support
          Annex" after the words "Master Agreement".

     (ii) CONDITIONS PRECEDENT. Section 2(a)(iii) is hereby amended by adding
          the following at the end thereof:

          Notwithstanding anything to the contrary in Section 2(a)(iii)(1), if
          an Event of Default with respect to Party B or Potential Event of
          Default with respect to Party B has occurred and been continuing for
          more than 30 Local Business Days and no Early Termination Date in
          respect of the Affected Transactions has occurred or been effectively
          designated by Party A, the obligations of Party A

                                     O-1-11

<PAGE>

          under Section 2(a)(i) shall cease to be subject to the condition
          precedent set forth in Section 2(a)(iii)(1) with respect to such
          specific occurrence of such Event of Default or such Potential Event
          of Default (the "SPECIFIC EVENT"); provided, however, for the
          avoidance of doubt, the obligations of Party A under Section 2(a)(i)
          shall be subject to the condition precedent set forth in Section
          2(a)(iii)(1) (subject to the foregoing) with respect to any subsequent
          occurrence of the same Event of Default with respect to Party B or
          Potential Event of Default with respect to Party B after the Specific
          Event has ceased to be continuing and with respect to any occurrence
          of any other Event of Default with respect to Party B or Potential
          Event of Default with respect to Party B that occurs subsequent to the
          Specific Event.

     (iii) CHANGE OF ACCOUNT. Section 2(b) is hereby amended by the addition of
          the following after the word "delivery" in the first line thereof:

          "to another account in the same legal and tax jurisdiction as the
          original account".

     (iv) REPRESENTATIONS. Section 3 is hereby amended by adding at the end
          thereof the following subsection (g):

          "(g) Relationship Between Parties.

               (1)  Nonreliance. (i) It is not relying on any statement or
                    representation of the other party regarding the Transaction
                    (whether written or oral), other than the representations
                    expressly made in this Agreement or the Confirmation in
                    respect of that Transaction and (ii) it has consulted with
                    its own legal, regulatory, tax, business, investment,
                    financial and accounting advisors to the extent it has
                    deemed necessary, and it has made its own investment,
                    hedging and trading decisions based upon its own judgment
                    and upon any advice from such advisors as it has deemed
                    necessary and not upon any view expressed by the other
                    party.

               (2)  Evaluation and Understanding. (i) It has the capacity to
                    evaluate (internally or through independent professional
                    advice) the Transaction and has made its own decision to
                    enter into the Transaction and (ii) It understands the
                    terms, conditions and risks of the Transaction and is
                    willing and able to accept those terms and conditions and to
                    assume those risks, financially and otherwise.

               (3)  Purpose. It is entering into the Transaction for the
                    purposes of managing its borrowings or investments, hedging
                    its underlying assets or liabilities or in connection with a
                    line of business.

               (4)  Status of Parties. The other party is not acting as an
                    agent, fiduciary or advisor for it in respect of the
                    Transaction.

               (5)  Eligible Contract Participant. It is an "eligible swap
                    participant" as such term is defined in, Section 35.1(b)(2)
                    of the regulations (17 C.F.R. 35) promulgated under, and an
                    "eligible contract participant" as defined in Section
                    1(a)(12) of the Commodity Exchange Act, as amended."

     (v)  TRANSFER TO AVOID TERMINATION EVENT. Section 6(b)(ii) is hereby
          amended by (i) deleting the words "or if a Tax Event Upon Merger
          occurs and the Burdened Party is the Affected Party," and (ii) by
          deleting the words "to transfer" and inserting the words "to effect a
          Permitted Transfer" in lieu thereof.

     (vi) JURISDICTION. Section 13(b) is hereby amended by: (i) deleting in the
          second line of subparagraph (i) thereof the word "non-", (ii) deleting
          "; and" from the end of subparagraph 1 and inserting "." in lieu
          thereof, and (iii) deleting the final paragraph thereof.

                                     O-1-12
<PAGE>

     (vii) LOCAL BUSINESS DAY. The definition of Local Business Day in Section
          14 is hereby amended by the addition of the words "or any Credit
          Support Document" after "Section 2(a)(i)" and the addition of the
          words "or Credit Support Document" after "Confirmation".

(c)  ADDITIONAL TERMINATION EVENTS. The following Additional Termination Events
     will apply:

     (i)  FIRST RATING TRIGGER COLLATERAL. If (A) it is not the case that a
          Moody's Second Trigger Ratings Event has occurred and been continuing
          for 30 or more Local Business Days and (B) Party A has failed to
          comply with or perform any obligation to be complied with or performed
          by Party A in accordance with the Credit Support Annex, then an
          Additional Termination Event shall have occurred with respect to Party
          A and Party A shall be the sole Affected Party with respect to such
          Additional Termination Event.

     (ii) SECOND RATING TRIGGER REPLACEMENT. If (A) a Required Ratings Downgrade
          Event has occurred and been continuing for 30 or more Local Business
          Days and (B) (i) at least one Eligible Replacement has made a Firm
          Offer to be the transferee of all of Party A's rights and obligations
          under this Agreement (and such Firm Offer remains an offer that will
          become legally binding upon such Eligible Replacement upon acceptance
          by the offeree) and/or (ii) an Eligible Guarantor has made a Firm
          Offer to provide an Eligible Guarantee (and such Firm Offer remains an
          offer that will become legally binding upon such Eligible Guarantor
          immediately upon acceptance by the offeree), then an Additional
          Termination Event shall have occurred with respect to Party A and
          Party A shall be the sole Affected Party with respect to such
          Additional Termination Event.

     (iii) RESERVED.

     (iv) PROVISION OF INFORMATION REQUIRED BY REGULATION AB. Party A shall fail
          to comply with the provisions of Part 5(e) upon the occurrence of a
          Swap Disclosure Event. For all purposes of this Agreement, Party A
          shall be the sole Affected Party with respect to such Additional
          Termination Event.

     (v)  OPTIONAL TERMINATION OF THE SECURITIZATION. If, at any time, the
          Terminator purchases the Mortgage Loans pursuant to Section 9.01 of
          the Pooling and Servicing Agreement, then an Additional Termination
          Event shall have occurred and Party B shall be the sole Affected Party
          with respect thereto; provided, however, that notwithstanding Section
          6(b)(iv) of the Master Agreement, only Party B shall have the right to
          designate an Early Termination Date in respect of this Additional
          Termination Event; provided, further, that the Early Termination Date
          shall not be prior to the Optional Termination Date.

(d)  REQUIRED RATINGS DOWNGRADE EVENT. In the event that a "REQUIRED RATINGS
     DOWNGRADE EVENT" from any of the Swap Rating Agencies shall occur and be
     continuing, then Party A shall, as soon as reasonably practicable, at its
     own expense, using commercially reasonable efforts, procure either (A) a
     Permitted Transfer or (B) an Eligible Guarantee from an Eligible Guarantor.

(e)  COMPLIANCE WITH REGULATION AB. (i) For purposes of Item 1115 of Subpart
     229.1100 - Asset Backed Securities (Regulation AB) (17 C.F.R.
     ss.ss.229.1100 - 229.1123) ("Regulation AB") under the Securities Act of
     1933, as amended, and the Securities Exchange Act of 1934, as amended (the
     "Exchange Act"), as amended and interpreted by the Securities and Exchange
     Commission and its staff, if the Depositor or Party B makes a
     determination, acting reasonably and in good faith, that (x) the applicable
     "significance percentage" with respect to this Agreement has been reached,
     and (y) it has a reporting obligation under the Exchange Act (a "Swap
     Disclosure Event"), then Party A shall (or shall cause its Credit Support
     Provider to), within ten (10) calendar days after notice to that effect, at
     its sole expense, take one of the following actions (each subject to
     satisfaction of the Rating Agency Condition): (1) provide (including, if
     permitted by Regulation AB, provision by reference to reports filed
     pursuant to the Exchange Act or otherwise publicly available information):
     (A) the financial data required by Item 301 of Regulation S-K (17 C.F.R.
     Section 229.301), pursuant to Item 1115(b)(1); (B) financial statements
     meeting the requirements of Regulation S-X (17 C.F.R. Sections 210.1-01
     through 210.12-29, but excluding 17 C.F.R. ss. 210.3-05 and Article 11 of

                                     O-1-13

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     Regulation S-X (17 C.F.R. ss. ss. 210.11-01 through 210.11-03)), pursuant
     to Item 1115(b)(2); or (C) such other financial information as may at the
     time be required or permitted to be provided in satisfaction of the
     requirements of Item 1115(b), together with accountants consents and/or a
     procedure letter relating thereto; or (2) secure an Approved Replacement
     that is able to comply with the requirements of Item 1115(b) of Regulation
     AB to replace Party A as party to this Agreement, on substantially similar
     terms, the debt rating of which entity (or credit support provider
     therefor) meets or exceeds the applicable requirements of the applicable
     Rating Agencies.

     (ii) For so long as the aggregate significance percentage is 10% or more,
     Party A shall (or shall cause its Credit Support Provider to) provide any
     updates to the information provided pursuant to clause (i)(1) above to the
     Depositor within five (5) Business Days following availability thereof (but
     in no event more than 45 days after the end of each of Party A's Credit
     Support Provider's fiscal half for any half-year update, and in no event
     more than 90 days after the end of each of Party A's Credit Support
     Provider's fiscal year for any annual update).

     (iii) All information provided pursuant to clauses (i)(1) and (ii) above
     (all such information, "Swap Financial Disclosure") shall be in a form
     suitable for conversion to the format required for filing by the Depositor
     with the Commission via the Electronic Data Gathering and Retrieval System
     (EDGAR). In addition, any such information, if audited, shall be
     accompanied by any necessary auditor's consents or, if such information is
     unaudited, shall be accompanied by an appropriate agreed-upon procedures
     letter from Party A's accountants. If permitted by Regulation AB, any such
     information may be provided by reference to or incorporation by reference
     from reports filed pursuant to the Exchange Act.

     (iv) Third Party Beneficiary. The Depositor shall be an express third party
     beneficiary of this Agreement as if a party hereto to the extent of the
     Depositor's rights explicitly specified in this Part 5(e).

(f)  TRANSFERS.

     (i)  Section 7 is hereby amended to read in its entirety as follows:

          "Except with respect to any Permitted Transfer pursuant to Section
          6(b)(ii), Part 5(d), Part 5(e), or the succeeding sentence, neither
          Party A nor Party B is permitted to assign, novate or transfer
          (whether by way of security or otherwise) as a whole or in part any of
          its rights, obligations or interests under the Agreement or any
          Transaction unless (a) the prior written consent of the other party is
          obtained, and (b) the Rating Agency Condition has been satisfied with
          respect to S&P and DBRS. At any time at which no Relevant Entity has
          credit ratings at least equal to the Approved Ratings Threshold, Party
          A may make a Permitted Transfer."

     (ii) If an Eligible Replacement has made a Firm Offer (which remains an
          offer that will become legally binding upon acceptance by Party B) to
          be the transferee pursuant to a Permitted Transfer, Party B shall, at
          Party A's written request and at Party A's expense, take any
          reasonable steps required to be taken by Party B to effect such
          transfer.

(g)  NON-RECOURSE. Party A acknowledges and agrees that, notwithstanding any
     provision in this Agreement to the contrary, the obligations of Party B
     hereunder are limited recourse obligations of Party B, payable solely from
     the Issuing Entity, in accordance with the priority of payments and other
     terms of the Pooling and Servicing Agreement and that Party A will not have
     any recourse to any of the directors, officers, employees, shareholders or
     affiliates of the Party B with respect to any claims, losses, damages,
     liabilities, indemnities or other obligations in connection with any
     transactions contemplated hereby. In the event that the funds on deposit
     with the Issuing Entity should be insufficient to satisfy all claims
     outstanding and following the realization of all funds on deposit with the
     Issuing Entity, any claims against or obligations of Party B under the ISDA
     Master Agreement or any other confirmation thereunder still outstanding
     shall be extinguished and thereafter not revive. Party B shall not have
     liability for any failure or delay in making a payment hereunder to Party A
     due to any failure or delay in receiving amounts held by the Trustee. This
     provision will survive the termination of this Agreement.

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<PAGE>

(h)  TIMING OF PAYMENTS BY PARTY B UPON EARLY TERMINATION. Notwithstanding
     anything to the contrary in Section 6(d)(ii), to the extent that all or a
     portion (in either case, the "Unfunded Amount") of any amount that is
     calculated as being due in respect of any Early Termination Date under
     Section 6(e) from Party B to Party A will be paid by Party B from amounts
     other than any upfront payment paid to Party B by an Eligible Replacement
     that has entered a Replacement Transaction with Party B, then such Unfunded
     Amount shall be due on the next subsequent Distribution Date following the
     date on which the payment would have been payable as determined in
     accordance with Section 6(d)(ii), and on any subsequent Distribution Dates
     until paid in full (or if such Early Termination Date is the final
     Distribution Date, on such final Distribution Date); provided, however,
     that if the date on which the payment would have been payable as determined
     in accordance with Section 6(d)(ii) is a Distribution Date, such payment
     will be payable on such Distribution Date.

(i)  RATING AGENCY NOTIFICATIONS. Notwithstanding any other provision of this
     Agreement, no Early Termination Date shall be effectively designated
     hereunder by Party B and no transfer of any rights or obligations under
     this Agreement shall be made by either party unless each Swap Rating Agency
     has been given prior written notice of such designation or transfer.

(j)  NO SET-OFF. Except as expressly provided for in Section 2(c), Section 6 or
     Part 1(f)(i)(D) hereof, and notwithstanding any other provision of this
     Agreement or any other existing or future agreement, each party irrevocably
     waives any and all rights it may have to set off, net, recoup or otherwise
     withhold or suspend or condition payment or performance of any obligation
     between it and the other party hereunder against any obligation between it
     and the other party under any other agreements. Section 6(e) shall be
     amended by deleting the following sentence: "The amount, if any, payable in
     respect of an Early Termination Date and determined pursuant to this
     Section will be subject to any Set-off."

(k)  AMENDMENT. Notwithstanding any provision to the contrary in this Agreement,
     no amendment of either this Agreement or any Transaction under this
     Agreement shall be permitted by either party unless each of the Swap Rating
     Agencies has been provided prior written notice of the same and such
     amendment satisfies the Rating Agency Condition with respect to S&P and
     DBRS.

(l)  NOTICE OF CERTAIN EVENTS OR CIRCUMSTANCES. Each Party agrees, upon learning
     of the occurrence or existence of any event or condition that constitutes
     (or that with the giving of notice or passage of time or both would
     constitute) an Event of Default or Termination Event with respect to such
     party, promptly to give the other Party and to each Swap Rating Agency
     notice of such event or condition; provided that failure to provide notice
     of such event or condition pursuant to this Part 5(l) shall not constitute
     an Event of Default or a Termination Event.

(m)  PROCEEDINGS. No Relevant Entity shall institute against, or cause any other
     person to institute against, or join any other person in instituting
     against Party B in any bankruptcy, reorganization, arrangement, insolvency
     or liquidation proceedings or other proceedings under any federal or state
     bankruptcy or similar law for a period of one year (or, if longer, the
     applicable preference period) and one day following payment in full of the
     Certificates and any Notes. This provision will survive the termination of
     this Agreement.

(n)  TRUSTEE LIABILITY LIMITATIONS. It is expressly understood and agreed by the
     parties hereto that (a) this Agreement is executed by U.S. Bank National
     Association not in its individual capacity, but solely as Trustee in the
     exercise of the powers and authority conferred and invested in it
     thereunder; (b) each of the representations, undertakings and agreements
     herein made on behalf of the Issuing Entity is made and intended not as
     personal representations of the Trustee but is made and intended for the
     purpose of binding only the Issuing Entity; and (c) under no circumstances
     shall U.S. Bank National Association in its individual capacity be
     personally liable for any payments hereunder or for the breach or failure
     of any obligation, representation, warranty or covenant made or undertaken
     under this Agreement. Nothing herein contained shall be construed as
     creating any liability on U.S. Bank National Association, individually or
     personally, to perform any covenant either expressed or implied contained
     herein, all such liability, if any, being expressly waived by the parties
     who are signatories to this Agreement and by any person claiming by,
     through or under such parties.

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<PAGE>

(o)  SEVERABILITY. If any term, provision, covenant, or condition of this
     Agreement, or the application thereof to any party or circumstance, shall
     be held to be invalid or unenforceable (in whole or in part) in any
     respect, the remaining terms, provisions, covenants, and conditions hereof
     shall continue in full force and effect as if this Agreement had been
     executed with the invalid or unenforceable portion eliminated, so long as
     this Agreement as so modified continues to express, without material
     change, the original intentions of the parties as to the subject matter of
     this Agreement and the deletion of such portion of this Agreement will not
     substantially impair the respective benefits or expectations of the
     parties; provided, however, that this severability provision shall not be
     applicable if any provision of Section 2, 5, 6, or 13 (or any definition or
     provision in Section 14 to the extent it relates to, or is used in or in
     connection with any such Section) shall be so held to be invalid or
     unenforceable.

     The parties shall endeavor to engage in good faith negotiations to replace
     any invalid or unenforceable term, provision, covenant or condition with a
     valid or enforceable term, provision, covenant or condition, the economic
     effect of which comes as close as possible to that of the invalid or
     unenforceable term, provision, covenant or condition.

(p)  AGENT FOR PARTY B. Party A acknowledges that U.S. Bank National
     Association, may act as Party B's agent to carry out certain functions on
     behalf of Party B in respect of this Confirmation, and that U.S. Bank
     National Association shall be entitled to give notices and to perform and
     satisfy the obligations of Party B hereunder on behalf of Party B.

(q)  ESCROW PAYMENTS. If (whether by reason of the time difference between the
     cities in which payments are to be made or otherwise) it is not possible
     for simultaneous payments to be made on any date on which both parties are
     required to make payments hereunder, either Party may at its option and in
     its sole discretion notify the other Party that payments on that date are
     to be made in escrow. In this case deposit of the payment due earlier on
     that date shall be made by 2:00 pm (local time at the place for the earlier
     payment) on that date with an escrow agent selected by the notifying party,
     accompanied by irrevocable payment instructions (i) to release the
     deposited payment to the intended recipient upon receipt by the escrow
     agent of the required deposit of any corresponding payment payable by the
     other party on the same date accompanied by irrevocable payment
     instructions to the same effect or (ii) if the required deposit of the
     corresponding payment is not made on that same date, to return the payment
     deposited to the party that paid it into escrow. The party that elects to
     have payments made in escrow shall pay all costs of the escrow
     arrangements.

(r)  CONSENT TO RECORDING. Each party hereto consents to the monitoring or
     recording, at any time and from time to time, by the other party of any and
     all communications between trading, marketing, and operations personnel of
     the parties and their Affiliates, waives any further notice of such
     monitoring or recording, and agrees to notify such personnel of such
     monitoring or recording.

(s)  WAIVER OF JURY TRIAL. Each party waives any right it may have to a trial by
     jury in respect of any in respect of any suit, action or proceeding
     relating to this Agreement or any Credit Support Document.

(t)  FORM OF ISDA MASTER AGREEMENT. Party A and Party B hereby agree that the
     text of the body of the ISDA Master Agreement is intended to be the printed
     form of the ISDA Master Agreement (Multicurrency - Crossborder) as
     published and copyrighted in 1992 by the International Swaps and
     Derivatives Association, Inc.

(u)  PAYMENT INSTRUCTIONS. Party A hereby agrees that, unless notified in
     writing by Party B of other payment instructions, any and all amounts
     payable by Party A to Party B under this Agreement shall be paid to the
     account specified in Item 4 of this Confirmation, below.

(v)  ADDITIONAL REPRESENTATIONS.

     (i)  REPRESENTATIONS OF PARTY A. Party A represents to Party B on the date
          on which Party A enters into each Transaction that:--

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<PAGE>

          (1)  Party A's obligations under this Agreement rank pari passu with
               all of Party A's other unsecured, unsubordinated obligations
               except those obligations preferred by operation of law.

     (ii) CAPACITY. Party A represents to Party B on the date on which Party A
          enters into this Agreement that it is entering into the Agreement and
          the Transaction as principal and not as agent of any person. Party B
          represents to Party A on the date on which Party B enters into this
          Agreement that it is entering into the Agreement and the Transaction
          in its capacity as Trustee.

(w)  ACKNOWLEDGEMENTS.

     (i)  SUBSTANTIAL FINANCIAL TRANSACTIONS. Each party hereto is hereby
          advised and acknowledges as of the date hereof that the other party
          has engaged in (or refrained from engaging in) substantial financial
          transactions and has taken (or refrained from taking) other material
          actions in reliance upon the entry by the parties into the Transaction
          being entered into on the terms and conditions set forth herein and in
          the Pooling and Servicing Agreement relating to such Transaction, as
          applicable. This paragraph shall be deemed repeated on the trade date
          of each Transaction.

     (ii) BANKRUPTCY CODE. Subject to Part 5(m), without limiting the
          applicability if any, of any other provision of the U.S. Bankruptcy
          Code as amended (the "Bankruptcy Code") (including without limitation
          Sections 362, 546, 556, and 560 thereof and the applicable definitions
          in Section 101 thereof), the parties acknowledge and agree that all
          Transactions entered into hereunder will constitute "forward
          contracts" or "swap agreements" as defined in Section 101 of the
          Bankruptcy Code or "commodity contracts" as defined in Section 761 of
          the Bankruptcy Code, that the rights of the parties under Section 6 of
          this Agreement will constitute contractual rights to liquidate
          Transactions, that any margin or collateral provided under any margin,
          collateral, security, pledge, or similar agreement related hereto will
          constitute a "margin payment" as defined in Section 101 of the
          Bankruptcy Code, and that the parties are entities entitled to the
          rights under, and protections afforded by, Sections 362, 546, 556, and
          560 of the Bankruptcy Code.

(x)  RESERVED.

(y)  RESERVED.

(z)  ADDITIONAL DEFINITIONS.

               As used in this Agreement, the following terms shall have the
     meanings set forth below, unless the context clearly requires otherwise:

          "APPROVED RATINGS THRESHOLD" means each of the S&P Approved Ratings
          Threshold, the Moody's First Trigger Ratings Threshold, and the DBRS
          Approved Ratings Threshold.

          "APPROVED REPLACEMENT" means, with respect to a Market Quotation, an
          entity making such Market Quotation, which entity would satisfy
          conditions (a), (b), and (c) of the definition of Permitted Transfer
          (as determined by Party B in its sole discretion, acting in a
          commercially reasonable manner) if such entity were a Transferee, as
          defined in the definition of Permitted Transfer.

          "DBRS" means Dominion Bond Rating Service, or any successor thereto.

          "DBRS APPROVED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee, or an Eligible Replacement, a
          long-term unsecured and unsubordinated debt rating from DBRS of
          "AA(low)" and a short-term unsecured and unsubordinated debt rating
          from DBRS of "[R-1(middle)".

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<PAGE>

          "DBRS REQUIRED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee or an Eligible Replacement, a
          long-term unsecured and unsubordinated debt rating from DBRS of "BBB".

          "DERIVATIVE PROVIDER TRIGGER EVENT" means (i) an Event of Default with
          respect to which Party A is a Defaulting Party, (ii) a Termination
          Event with respect to which Party A is the sole Affected Party or
          (iii) an Additional Termination Event with respect to which Party A is
          the sole Affected Party.

          "ELIGIBLE GUARANTEE" means an unconditional and irrevocable guarantee
          of all present and future obligations (for the avoidance of doubt, not
          limited to payment obligations) of Party A or an Eligible Replacement
          to Party B under this Agreement that is provided by an Eligible
          Guarantor as principal debtor rather than surety and that is directly
          enforceable by Party B, the form and substance of which guarantee are
          subject to the Rating Agency Condition with respect to S&P and DBRS],
          and either (A) a law firm has given a legal opinion confirming that
          none of the guarantor's payments to Party B under such guarantee will
          be subject to Tax collected by withholding or (B) such guarantee
          provides that, in the event that any of such guarantor's payments to
          Party B are subject to Tax collected by withholding, such guarantor is
          required to pay such additional amount as is necessary to ensure that
          the net amount actually received by Party B (free and clear of any Tax
          collected by withholding) will equal the full amount Party B would
          have received had no such withholding been required.

          "ELIGIBLE GUARANTOR" means an entity that (A) has credit ratings from
          S&P at least equal to the S&P Approved Ratings Threshold and from DBRS
          at least equal to the DBRS Approved Ratings Threshold and (B) has
          credit ratings from Moody's at least equal to the Moody's Second
          Trigger Ratings Threshold, provided, for the avoidance of doubt, that
          an Eligible Guarantee of an Eligible Guarantor with credit ratings
          below the Approved Ratings Threshold will not cause a Collateral Event
          (as defined in the Credit Support Annex) not to occur or continue.

          "ELIGIBLE REPLACEMENT" means an entity (i) that (a) has credit ratings
          from S&P at least equal to the S&P Approved Ratings Threshold and from
          DBRS at least equal to the DBRS Approved Ratings Threshold and (b) has
          credit ratings from Moody's at least equal to the Moody's Second
          Trigger Ratings Threshold, provided, for the avoidance of doubt, that
          an Eligible Guarantee of an Eligible Guarantor with credit ratings
          below either the S&P Approved Ratings Threshold or the DBRS Approved
          Ratings Threshold will not cause a Collateral Event (as defined in the
          Credit Support Annex) not to occur or continue, or (ii) the present
          and future obligations (for the avoidance of doubt, not limited to
          payment obligations) of which entity to Party B under this Agreement
          are guaranteed pursuant to an Eligible Guarantee.

          "ESTIMATED SWAP TERMINATION PAYMENT" means, with respect to an Early
          Termination Date, an amount determined by Party A in good faith and in
          a commercially reasonable manner as the maximum payment that could be
          owed by Party B to Party A in respect of such Early Termination Date
          pursuant to Section 6(e) of the ISDA Master Agreement, taking into
          account then current market conditions.

          "FIRM OFFER" means (A) with respect to an Eligible Replacement, a
          quotation from such Eligible Replacement (i) in an amount equal to the
          actual amount payable by or to Party B in consideration of an
          agreement between Party B and such Eligible Replacement to replace
          Party A as the counterparty to this Agreement by way of novation or,
          if such novation is not possible, an agreement between Party B and
          such Eligible Replacement to enter into a Replacement Transaction
          (assuming that all Transactions hereunder become Terminated
          Transactions), and (ii) that constitutes an offer by such Eligible
          Replacement to replace Party A as the counterparty to this Agreement
          or enter a Replacement Transaction that will become legally binding
          upon such Eligible Replacement upon acceptance by Party B, and (B)
          with respect to an Eligible Guarantor, an offer by such Eligible
          Guarantor to provide an Eligible Guarantee that will become legally
          binding upon such Eligible Guarantor upon acceptance by the offeree.

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<PAGE>

          "MOODY'S" means Moody's Investors Service, Inc., or any successor
          thereto.

          "MOODY'S FIRST TRIGGER RATINGS EVENT" means that no Relevant Entity
          has credit ratings from Moody's at least equal to the Moody's First
          Trigger Ratings Threshold.

          "MOODY'S FIRST TRIGGER RATINGS THRESHOLD" means, with respect to Party
          A, the guarantor under an Eligible Guarantee or an Eligible
          Replacement, (i) if such entity has a short-term unsecured and
          unsubordinated debt rating from Moody's, a long-term unsecured and
          unsubordinated debt rating or counterparty rating from Moody's of "A2"
          and a short-term unsecured and unsubordinated debt rating from Moody's
          of "Prime-1", or (ii) if such entity does not have a short-term
          unsecured and unsubordinated debt rating or counterparty rating from
          Moody's, a long-term unsecured and unsubordinated debt rating or
          counterparty rating from Moody's of "A1".

          "MOODY'S SECOND TRIGGER RATINGS EVENT" means that no Relevant Entity
          has credit ratings from Moody's at least equal to the Moody's Second
          Trigger Rating Threshold.

          "MOODY'S SECOND TRIGGER RATINGS THRESHOLD" means, with respect to
          Party A, the guarantor under an Eligible Guarantee or an Eligible
          Replacement, (i) if such entity has a short-term unsecured and
          unsubordinated debt rating from Moody's, a long-term unsecured and
          unsubordinated debt rating or counterparty rating from Moody's of "A3"
          and a short-term unsecured and unsubordinated debt rating from Moody's
          of "Prime-2", or (ii) if such entity does not have a short-term
          unsecured and unsubordinated debt rating from Moody's, a long-term
          unsecured and unsubordinated debt rating or counterparty rating from
          Moody's of "A3".

          "PERMITTED TRANSFER" means a transfer by novation by Party A pursuant
          to Section 6(b)(ii), Part 5(d), Part 5(e), or the second sentence of
          Section 7 (as amended herein) to a transferee (the "TRANSFEREE") of
          all, but not less than all, of Party A's rights, liabilities, duties
          and obligations under this Agreement, with respect to which transfer
          each of the following conditions is satisfied: (a) the Transferee is
          an Eligible Replacement; (b) Party A and the Transferee are both
          "dealers in notional principal contracts" within the meaning of
          Treasury regulations section 1.1001-4; (c) as of the date of such
          transfer the Transferee would not be required to withhold or deduct on
          account of Tax from any payments under this Agreement or would be
          required to gross up for such Tax under Section 2(d)(i)(4); (d) an
          Event of Default or Termination Event would not occur as a result of
          such transfer; (e) pursuant to a written instrument (the "TRANSFER
          AGREEMENT"), the Transferee acquires and assumes all rights and
          obligations of Party A under the Agreement and the relevant
          Transaction; (f) Party B shall have determined, in its sole
          discretion, acting in a commercially reasonable manner, that such
          Transfer Agreement is effective to transfer to the Transferee all, but
          not less than all, of Party A's rights and obligations under the
          Agreement and all relevant Transactions; (g) Party A will be
          responsible for any costs or expenses incurred in connection with such
          transfer (including any replacement cost of entering into a
          replacement transaction); (h) either (A) Moody's has been given prior
          written notice of such transfer and the Rating Agency Condition is
          satisfied with respect to S&P and DBRS or (B) each Swap Rating Agency
          has been given prior written notice of such transfer and such transfer
          is in connection with the assignment and assumption of this Agreement
          without modification of its terms, other than party names, dates
          relevant to the effective date of such transfer, tax representations
          (provided that the representations in Part 2(a)(i) are not modified)
          and any other representations regarding the status of the substitute
          counterparty of the type included in Part 5(b)(iv), Part 5(v)(i)(2) or
          Part 5(v)(ii), notice information and account details; and (i) such
          transfer otherwise complies with the terms of the Pooling and
          Servicing Agreement.

          "RATING AGENCY CONDITION" means, with respect to any particular
          proposed act or omission to act hereunder and each Swap Rating Agency
          specified in connection with such proposed act or omission, that the
          party acting or failing to act must consult with each of the specified
          Swap Rating Agencies and receive from each such Swap Rating Agency a
          prior written confirmation that the proposed action or inaction would
          not cause a downgrade or withdrawal of the then-current rating of any
          Certificates or Notes.

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          "RELEVANT ENTITY" means Party A and, to the extent applicable, a
          guarantor under an Eligible Guarantee.

          "REPLACEMENT TRANSACTION" means, with respect to any Terminated
          Transaction or group of Terminated Transactions, a transaction or
          group of transactions that (i) would have the effect of preserving for
          Party B the economic equivalent of any payment or delivery (whether
          the underlying obligation was absolute or contingent and assuming the
          satisfaction of each applicable condition precedent) by the parties
          under Section 2(a)(i) in respect of such Terminated Transaction or
          group of Terminated Transactions that would, but for the occurrence of
          the relevant Early Termination Date, have been required after that
          Date, and (ii) has terms which are substantially the same as this
          Agreement, including, without limitation, rating triggers, Regulation
          AB compliance, and credit support documentation, save for the
          exclusion of provisions relating to Transactions that are not
          Terminated Transaction, as determined by Party B in its sole
          discretion, acting in a commercially reasonable manner.

          "REQUIRED RATINGS DOWNGRADE EVENT" means that no Relevant Entity has
          credit ratings from a Swap Rating Agency at least equal to the
          Required Ratings Threshold for that Swap Rating Agency.

          "REQUIRED RATINGS THRESHOLD" means each of the S&P Required Ratings
          Threshold, the Moody's Second Trigger Ratings Threshold, and the DBRS
          Required Ratings Threshold.

          "S&P" means Standard & Poor's Ratings Services, a division of The
          McGraw-Hill Companies, Inc., or any successor thereto.

          "S&P APPROVED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee or an Eligible Replacement, a
          short-term unsecured and unsubordinated debt rating from S&P of "A-1",
          or, if such entity does not have a short-term unsecured and
          unsubordinated debt rating from S&P, a long-term unsecured and
          unsubordinated debt rating or counterparty rating from S&P of "A+".

          "S&P REQUIRED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee or an Eligible Replacement, a
          long-term unsecured and unsubordinated debt rating or counterparty
          rating from S&P of "BBB+".

          "SWAP RATING AGENCIES" means, with respect to any date of
          determination, each of S&P, Moody's, and DBRS, to the extent that each
          such rating agency is then providing a rating for any of the Specialty
          Underwriting and Residential Finance, Series 2007-BC1 (the
          "Certificates") or any notes backed by the Certificates (the "Notes").

(aa) RETURN OF AMOUNTS RECEIVED BY MLML OR ITS AFFILIATES. Merrill Lynch
     Mortgage Lending, Inc. ("MLML") agrees and acknowledges that amounts paid
     hereunder are not intended to benefit the holder of any class of
     Certificates rated by any Swap Rating Agency if such holder is MLML or any
     of its affiliates. If MLML or any of its affiliates receives any such
     amounts, it will promptly remit (or, if such amounts are received by an
     affiliate of MLML, MLML hereby agrees that it will cause such affiliate to
     promptly remit) such amounts to the Trustee, whereupon such Trustee will
     promptly remit such amounts to Party A. MLML further agrees to provide
     notice to Party A upon any remittance to the Trustee.

               [Remainder of this page intentionally left blank.]

                                     O-1-20

<PAGE>

4.   Account Details and Settlement Information:

Payments to Party A:   JPMorgan Chase Bank
                       SWIFT: CHASUS33
                       Account of: Swiss Re Financial Products
                       Account No.: 066-911184
                       ABA# 021000021

Payments to Party B:   U.S Bank National Association
                       ABA#: 091000022
                       DDA#: 1731 0332 2058
                       DDA Name: Structured Finance Wire Clearing
                       FFC: 108693001/SURF07-BC1 Cap Contract Account

This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

                                     O-1-21

<PAGE>

We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.

Very truly yours,

SWISS RE FINANCIAL PRODUCTS CORPORATION

A. By:
       ---------------------------
   Name:
         -------------------------
   Title:
          ------------------------

Party B, acting through its duly authorized signatory, hereby agrees to, accepts
and confirms the terms of the foregoing as of the date hereof.

U.S. Bank National Association, in its capacity as trustee with respect to
Specialty Underwriting and Residential Finance, Series 2007-BC1 (the "Trustee")

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

Agreed and acknowledged by:

MERRILL LYNCH MORTGAGE LENDING, INC.

B. By:
       ---------------------------
   Name:
         -------------------------
   Title:
          ------------------------

                                     O-1-22

<PAGE>

                                   SCHEDULE I

AMORTIZATION SCHEDULE, subject to adjustment in accordance with the Following
Business Day Convention

<TABLE>
<CAPTION>
From and including    To but excluding   Notional Amount (USD)   Cap Rate (%)
------------------    ----------------   ---------------------   ------------
<S>                  <C>                 <C>                     <C>
 January 24, 2007    February 25, 2007      294,133,000.00          7.321
 February 25, 2007     March 25, 2007       291,441,308.00          8.387
  March 25, 2007       April 25, 2007       287,918,909.00          7.562
  April 25, 2007        May 25, 2007        283,569,595.00          7.820
   May 25, 2007        June 25, 2007        278,396,806.00          7.564
   June 25, 2007       July 25, 2007        272,412,881.00          7.820
</TABLE>

                                     O-1-23

<PAGE>

                                     ANNEX A

                    PARAGRAPH 13 OF THE CREDIT SUPPORT ANNEX

                                 SEE EXHIBIT O-4

                                     O-1-24

<PAGE>

                                   EXHIBIT O-2

                         FORM OF CLASS A-2 CAP CONTRACT

DATE:               JANUARY 24, 2007

TO:                 U.S. Bank National Association, in its capacity as Trustee
                    with respect to Specialty Underwriting and Residential
                    Finance Trust, Series 2007-BC1 (the "Trustee")

                    60 Livingston Avenue,

                    Mail Code EP-MN-WS3D

                    St. Paul, Minnesota 55107-2292

                    Attention: Structured Finance/SURF 2007-BC1

FROM:               SWISS RE FINANCIAL PRODUCTS CORPORATION

SUBJECT:            Fixed Income Derivatives Confirmation

REFERENCE NUMBER:   1234430

The purpose of this long-form confirmation ("CONFIRMATION") is to confirm the
terms and conditions of the current Transaction entered into on the Trade Date
specified below (the "TRANSACTION") between Swiss Re Financial Products
Corporation ("PARTY A") and U.S. Bank National Association, in its capacity as
Trustee with respect to Specialty Underwriting and Residential Finance, Series
2007-BC1 (the "Trustee") ("PARTY B") created under the Pooling and Servicing
Agreement, dated as of January 1, 2007, among Party A and Party B (the "POOLING
AND SERVICING Agreement"). This Confirmation evidences a complete and binding
agreement between you and us to enter into the Transaction on the terms set
forth below and replaces any previous agreement between us with respect to the
subject matter hereof. This Confirmation constitutes a "CONFIRMATION" and also
constitutes a "SCHEDULE" as referred to in the ISDA Master Agreement, and
Paragraph 13 of a Credit Support Annex to the Schedule.

1.   This Confirmation shall supplement, form a part of, and be subject to an
     agreement in the form of the ISDA Master Agreement (Multicurrency - Cross
     Border) as published and copyrighted in 1992 by the International Swaps and
     Derivatives Association, Inc. (the "ISDA MASTER AGREEMENT"), as if Party A
     and Party B had executed an agreement in such form on the date hereof, with
     a Schedule as set forth in Item 3 of this Confirmation, and an ISDA Credit
     Support Annex (Bilateral Form - ISDA Agreements Subject to New York Law
     Only version) as published and copyrighted in 1994 by the International
     Swaps and Derivatives Association, Inc., with Paragraph 13 thereof as set
     forth in Annex A hereto (the "CREDIT SUPPORT ANNEX"). For the avoidance of
     doubt, the Transaction described herein shall be the sole Transaction
     governed by such ISDA Master Agreement. In the event of any inconsistency
     among any of the following documents, the relevant document first listed
     shall govern: (i) this Confirmation, exclusive of the provisions set forth
     in Item 3 hereof and Annex A hereto; (ii) the provisions set forth in Item
     3 hereof, which are incorporated by

                                      O-2-1

<PAGE>

     reference into the Schedule; (iii) the Credit Support Annex; (iv) the
     Definitions; and (v) the ISDA Master Agreement.

     Each reference herein to a "Section" (unless specifically referencing the
     Pooling and Servicing Agreement) or to a "Section" "of this Agreement" will
     be construed as a reference to a Section of the ISDA Master Agreement; each
     herein reference to a "Part" will be construed as a reference to the
     provisions herein deemed incorporated in a Schedule to the ISDA Master
     Agreement; each reference herein to a "Paragraph" will be construed as a
     reference to a Paragraph of the Credit Support Annex.

2.   The terms of the particular Transaction to which this Confirmation relates
     are as follows:

<TABLE>
<S>                             <C>
Type of Transaction:            Interest Rate Cap

Notional Amount:                With respect to any Calculation Period, the
                                lesser of: (i) the amount set forth on Schedule
                                I attached hereto for such Calculation Period
                                and(ii) the Class Certificate Principal Balance
                                of the Class A-2A, A-2B, A-2C and A-2D
                                Certificates (as defined in the Pooling and
                                Servicing Agreement) for such Floating Rate
                                Payer Payment Date. The Trustee under the
                                Pooling and Servicing Agreement shall provide at
                                least five (5) business days notice prior to
                                each Floating Rate Payer Payment Date for each
                                Calculation Period to Party A if the Class
                                Certificate Principal Balance of the Class A-2A,
                                A-2B, A-2C and A-2D Certificates is less than
                                the Schedule I attached hereto..

Trade Date:                     January 11, 2007

Effective Date:                 January 24, 2007

Termination Date:               July 25, 2007, subject to adjustment in
                                accordance with the Business Day Convention

Fixed Amounts:

     Fixed Rate Payer:          Party B

     Fixed Amount:              Not applicable

Floating Amounts:

     Floating Rate Payer:       Party A

     Cap Rate:                  With respect to any Calculation Period, the
                                amount set forth for such period on Schedule I
                                attached hereto

     Floating Rate Payer
     Period End Dates:          The 25th calendar day of each month during the
                                Term of this Transaction, commencing February
                                25, 2007, and ending on the Termination Date
                                subject to adjustment in accordance with the
                                Business Day Convention.

     Floating Rate Payer
     Payment Dates:             Early payment shall be applicable. The Floating
                                Rate Payer Payment Date shall be two (2)
                                Business Days prior to each
</TABLE>

                                      O-2-2

<PAGE>

<TABLE>
<S>                             <C>
                                Period End Date, commencing on February 22, 2007

     Floating Rate Option:      USD-LIBOR-BBA; provided, however, for any
                                Calculation Period, if the Floating Rate Option
                                is greater than 10.35%, then the Floating Rate
                                Option for such Calculation Period shall be
                                deemed 10.35%.

     Designated Maturity:       One month

     Floating Rate Day
     Count Fraction:            Actual/360

     Reset Dates:               The first day of each Calculation Period.

     Compounding:               Inapplicable

     Business Days:             New York

     Business Day Convention:   Following

     Calculation Agent:         Party A
</TABLE>

                                      O-2-3

<PAGE>

3.   Provisions Deemed Incorporated in a Schedule to the ISDA Master Agreement:

PART 1. TERMINATION PROVISIONS.

For the purposes of this Agreement:-

(a)  "SPECIFIED ENTITY" will not apply to Party A or Party B for any purpose.

(b)  "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.

(c)  EVENTS OF DEFAULT.

     The statement below that an Event of Default will apply to a specific party
     means that upon the occurrence of such an Event of Default with respect to
     such party, the other party shall have the rights of a Non-defaulting Party
     under Section 6 of this Agreement; conversely, the statement below that
     such event will not apply to a specific party means that the other party
     shall not have such rights.

     (ix) The "FAILURE TO PAY OR DELIVER" provisions of Section 5(a)(i) will
          apply to Party A and will apply to Party B; provided, however, that
          Section 5(a)(i) is hereby amended by replacing the word "third" with
          the word "first"; provided, further, that notwithstanding anything to
          the contrary in Section 5(a)(i), any failure by Party A to comply with
          or perform any obligation to be complied with or performed by Party A
          under the Credit Support Annex shall not constitute an Event of
          Default under Section 5(a)(i) unless (A) a Required Ratings Downgrade
          Event has occurred and been continuing for 30 or more Local Business
          Days and (B) such failure is not remedied on or before the third Local
          Business Day after notice of such failure is given to Party A.

     (x)  The "BREACH OF AGREEMENT" provisions of Section 5(a)(ii) will apply to
          Party A and will not apply to Party B.

     (xi) The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will
          apply to Party A and will not apply to Party B except that Section
          5(a)(iii)(1) will apply to Party B solely in respect of Party B's
          obligations under Paragraph 3(b) of the Credit Support Annex;
          provided, however, that notwithstanding anything to the contrary in
          Section 5(a)(iii)(1), any failure by Party A to comply with or perform
          any obligation to be complied with or performed by Party A under the
          Credit Support Annex shall not constitute an Event of Default under
          Section 5(a)(iii) unless (A) a Required Ratings Downgrade Event has
          occurred and been continuing for 30 or more Local Business Days and
          (B) such failure is not remedied on or before the third Local Business
          Day after notice of such failure is given to Party A.

     (xii) The "MISREPRESENTATION" provisions of Section 5(a)(iv) will apply to
          Party A and will not apply to Party B.

     (xiii) The "DEFAULT UNDER SPECIFIED TRANSACTION" provisions of Section
          5(a)(v) will apply to Party A and will not apply to Party B.

     (xiv) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to
          Party A and will not apply to Party B. For purposes of Section
          5(a)(vi), solely with respect to Party A:

          "Specified Indebtedness" will have the meaning specified in Section
          14, except that such term shall not include insurance contracts
          entered into in the ordinary course of Party A's Credit Support
          Provider's insurance business.

          "Threshold Amount" means with respect to Party A an amount equal to
          three percent (3%) of the Shareholders' Equity of Party A or, if
          applicable, the Eligible Guarantor.

                                      O-2-4

<PAGE>

          "Shareholders' Equity" means with respect to an entity, at any time,
          the sum (as shown in the most recent annual audited financial
          statements of such entity) of (i) its capital stock (including
          preferred stock) outstanding, taken at par value, (ii) its capital
          surplus and (iii) its retained earnings, minus (iv) treasury stock,
          each to be determined in accordance with generally accepted accounting
          principles.

     (xv) The "BANKRUPTCY" provisions of Section 5(a)(vii) will apply to Party A
          and will apply to Party B except that the provisions of Section
          5(a)(vii)(2), (6) (to the extent that such provisions refer to any
          appointment contemplated or effected by the Pooling and Servicing
          Agreement or any appointment to which Party B has not become subject),
          (7) and (9) will not apply to Party B; provided that, with respect to
          Party B only, Section 5(a)(vii)(4) is hereby amended by adding after
          the words "against it" the words "(excluding any proceeding or
          petition instituted or presented by Party A or its Affiliates)", and
          Section 5(a)(vii)(8) is hereby amended by deleting the words "to (7)
          inclusive" and inserting in lieu thereof ", (3), (4) as amended, (5),
          (6) as amended, or (7)".

     (xvi) The "MERGER WITHOUT ASSUMPTION" provisions of Section 5(a)(viii) will
          apply to Party A and will apply to Party B.

(d)  TERMINATION EVENTS.

     The statement below that a Termination Event will apply to a specific party
     means that upon the occurrence of such a Termination Event, if such
     specific party is the Affected Party with respect to a Tax Event, the
     Burdened Party with respect to a Tax Event Upon Merger (except as noted
     below) or the non-Affected Party with respect to a Credit Event Upon
     Merger, as the case may be, such specific party shall have the right to
     designate an Early Termination Date in accordance with Section 6 of this
     Agreement; conversely, the statement below that such an event will not
     apply to a specific party means that such party shall not have such right;
     provided, however, with respect to "Illegality" the statement that such
     event will apply to a specific party means that upon the occurrence of such
     a Termination Event with respect to such party, either party shall have the
     right to designate an Early Termination Date in accordance with Section 6
     of this Agreement.

     (i)  The "ILLEGALITY" provisions of Section 5(b)(i) will apply to Party A
          and will apply to Party B.

     (ii) The "TAX EVENT" provisions of Section 5(b)(ii) will apply to Party A
          except that, for purposes of the application of Section 5(b)(ii) to
          Party A, Section 5(b)(ii) is hereby amended by deleting the words "(x)
          any action taken by a taxing authority, or brought in a court of
          competent jurisdiction, on or after the date on which a Transaction is
          entered into (regardless of whether such action is taken or brought
          with respect to a party to this Agreement) or (y)", and the "TAX
          EVENT" provisions of Section 5(b)(ii) will apply to Party B.

     (iii) The "TAX EVENT UPON MERGER" provisions of Section 5(b)(iii) will
          apply to Party A and will apply to Party B, provided that Party A
          shall not be entitled to designate an Early Termination Date by reason
          of a Tax Event upon Merger in respect of which it is the Affected
          Party.

     (iv) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will not
          apply to Party A and will not apply to Party B.

(e)  The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not apply
     to Party A and will not apply to Party B.

(f)  PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
     Agreement:

     (iii) Market Quotation will apply, provided, however, that, in the event of
          a Derivative Provider Trigger Event, the following provisions will
          apply:

                                      O-2-5

<PAGE>

          (A)  The definition of Market Quotation in Section 14 shall be deleted
               in its entirety and replaced with the following:

               "MARKET QUOTATION" means, with respect to one or more Terminated
               Transactions, a Firm Offer which is (1) made by a Reference
               Market-maker that is an Eligible Replacement, (2) for an amount
               that would be paid to Party B (expressed as a negative number) or
               by Party B (expressed as a positive number) in consideration of
               an agreement between Party B and such Reference Market-maker to
               enter into a Replacement Transaction, and (3) made on the basis
               that Unpaid Amounts in respect of the Terminated Transaction or
               group of Transactions are to be excluded but, without limitation,
               any payment or delivery that would, but for the relevant Early
               Termination Date, have been required (assuming satisfaction of
               each applicable condition precedent) after that Early Termination
               Date is to be included.

          (B)  The definition of Settlement Amount shall be deleted in its
               entirety and replaced with the following:

               "SETTLEMENT AMOUNT" means, with respect to any Early Termination
               Date, an amount (as determined by Party B at the written
               direction of the Depositor) equal to:

               (a)  If a Market Quotation for the relevant Terminated
                    Transaction or group of Terminated Transactions is accepted
                    by Party B at the written direction of the Depositor so as
                    to become legally binding on or before the day falling ten
                    Local Business Days after the day on which the Early
                    Termination Date is designated, or such later day as Party B
                    at the written direction of the Depositor may specify in
                    writing to Party A, but in either case no later than one
                    Local Business Day prior to the Early Termination Date (such
                    day, the "Latest Settlement Amount Determination Day"), the
                    Termination Currency Equivalent of the amount (whether
                    positive or negative) of such Market Quotation;

               (b)  If, on the Latest Settlement Amount Determination Day, no
                    Market Quotation for the relevant Terminated Transaction or
                    group of Terminated Transactions has been accepted by Party
                    B at the written direction of the Depositor so as to become
                    legally binding and one or more Market Quotations from
                    Approved Replacements have been made and remain capable of
                    becoming legally binding upon acceptance, the Settlement
                    Amount shall equal the Termination Currency Equivalent of
                    the amount (whether positive or negative) of the lowest of
                    such Market Quotations (for the avoidance of doubt, the
                    lowest of such Market Quotations shall be the lowest Market
                    Quotation of such Market Quotations expressed as a positive
                    number or, if any of such Market Quotations is expressed as
                    a negative number, the Market Quotation expressed as a
                    negative number with the largest absolute value); or

               (c)  If, on the Latest Settlement Amount Determination Day, no
                    Market Quotation for the relevant Terminated Transaction or
                    group of Terminated Transactions is accepted by Party B so
                    as to become legally binding and no Market Quotation from an
                    Approved Replacement remains capable of becoming legally
                    binding upon acceptance, the Settlement Amount shall equal
                    Party B's Loss (whether positive or negative and without
                    reference to any Unpaid Amounts) for the relevant Terminated
                    Transaction or group of Terminated Transactions.

          (C)  If Party B at the written direction of the Depositor requests
               Party A in writing to obtain Market Quotations, Party A shall use
               its reasonable efforts to do so before the Latest Settlement
               Amount Determination Day.

                                      O-2-6

<PAGE>

          (D)  If the Settlement Amount is a negative number, Section 6(e)(i)(3)
               shall be deleted in its entirety and replaced with the following:

               "(3) Second Method and Market Quotation. If the Second Method and
               Market Quotation apply, (I) Party B shall pay to Party A an
               amount equal to the absolute value of the Settlement Amount in
               respect of the Terminated Transactions, (II) Party B shall pay to
               Party A the Termination Currency Equivalent of the Unpaid Amounts
               owing to Party A and (III) Party A shall pay to Party B the
               Termination Currency Equivalent of the Unpaid Amounts owing to
               Party B; provided, however, that (x) the amounts payable under
               the immediately preceding clauses (II) and (III) shall be subject
               to netting in accordance with Section 2(c) of this Agreement and
               (y) notwithstanding any other provision of this Agreement, any
               amount payable by Party A under the immediately preceding clause
               (III) shall not be netted-off against any amount payable by Party
               B under the immediately preceding clause (I)."

          (E)  At any time on or before the Latest Settlement Amount
               Determination Day at which two or more Market Quotations from
               Approved Replacements remain capable of becoming legally binding
               upon acceptance, Party B shall be entitled to accept only the
               lowest of such Market Quotations (for the avoidance of doubt, the
               lowest of such Market Quotations shall be the lowest Market
               Quotation of such Market Quotations expressed as a positive
               number or, if any of such Market Quotations is expressed as a
               negative number, the Market Quotation expressed as a negative
               number with the largest absolute value).

     (iv) The Second Method will apply.

(g)  "TERMINATION CURRENCY" means USD.

(h)  ADDITIONAL TERMINATION EVENTS. Additional Termination Events will apply as
     provided in Part 5(c).

PART 2. TAX MATTERS.

(a)  TAX REPRESENTATIONS.

     (i)  PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this
          Agreement:

          (A)  Party A makes the following representation(s):

               It is not required by any applicable law, as modified by the
               practice of any relevant governmental revenue authority, of any
               Relevant Jurisdiction to make any deduction or withholding for or
               on account of any Tax from any payment (other than interest under
               Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by
               it to the other party under this Agreement. In making this
               representation, it may rely on: the accuracy of any
               representations made by the other party pursuant to Section 3(f)
               of this Agreement; (ii) the satisfaction of the agreement
               contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and
               the accuracy and effectiveness of any document provided by the
               other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
               Agreement; and (iii) the satisfaction of the agreement of the
               other party contained in Section 4(d) of this Agreement, provided
               that it shall not be a breach of this representation where
               reliance is placed on clause (ii) and the other party does not
               deliver a form or document under Section 4(a)(iii) by reason of
               material prejudice to its legal or commercial position.

          (B)  Party B makes the following representation(s):

               None.

     (ii) PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this
          Agreement:

                                      O-2-7
<PAGE>

          (A)  Party A makes the following representation(s):

               Party A represents that it is a corporation organized under the
               laws of the State of Delaware.

          (B)  Party B makes the following representation(s):

               None.

(b)  TAX PROVISIONS.

     (i)  GROSS UP. Section 2(d)(i)(4) shall not apply to Party B as X, and
          Section 2(d)(ii) shall not apply to Party B as Y, in each case such
          that Party B shall not be required to pay any additional amounts
          referred to therein.

     (ii) INDEMNIFIABLE TAX. The definition of "Indemnifiable Tax" in Section 14
          is deleted in its entirety and replaced with the following:

          "INDEMNIFIABLE TAX" means, in relation to payments by Party A, any Tax
          and, in relation to payments by Party B, no Tax.

PART 3. AGREEMENT TO DELIVER DOCUMENTS.

(a)  For the purpose of Section 4(a)(i), tax forms, documents, or certificates
     to be delivered are:

<TABLE>
<CAPTION>
PARTY REQUIRED TO           FORM/DOCUMENT/                DATE BY WHICH TO
DELIVER DOCUMENT             CERTIFICATE                    BE DELIVERED
-----------------   -----------------------------   ----------------------------
<S>                 <C>                             <C>
Party A             An original properly            (i) upon execution of this
                    completed and executed United   Agreement, (ii) on or before
                    States Internal Revenue         the first payment date under
                    Service Form W-9 including      this Agreement, including
                    applicable attachments (or      any Credit Support Document,
                    any successor thereto) with     (iii) promptly upon the
                    respect to any payments         reasonable demand by Party
                    received or to be received by   B, (iv) prior to the
                    Party A that eliminates U.S.    expiration or obsolescence
                    federal withholding and         of any previously delivered
                    backup withholding Tax on       form, and (v) promptly upon
                    payments to Party A under       the information on any such
                    this Agreement.                 previously delivered form
                                                    becoming inaccurate or
                                                    incorrect.

Party B             (i) Upon execution of this      (i) upon execution of this
                    Agreement, an original          Agreement, (ii) on or before
                    properly completed and          the first payment date under
                    executed United States          this Agreement, including
                    Internal Revenue Service Form   any Credit Support Document,
                    W-9 including applicable        (iii) promptly upon the
                    attachments (or any successor   reasonable demand by Party
                    thereto) with respect to any    A, (iv) prior to the
                    payments received or to be      expiration or obsolescence
                    received by the initial         of any previously delivered
                    beneficial owner of payments    form, and (v) promptly upon
                    to Party B under this           the information on any such
                    Agreement, and (ii)             previously delivered form
                    thereafter, the appropriate     becoming inaccurate or
                    tax certification form (i.e.,   incorrect.
                    IRS Form W-9 or IRS Form
                    W-8BEN, W-8IMY, W-8EXP or
                    W-8ECI, as applicable (or any
                    successor form thereto)) with
                    respect to any payments
                    received or to be received by
                    the beneficial owner of
                    payments to Party B under
                    this Agreement from time to
                    time.
</TABLE>

                                      O-2-8

<PAGE>

(b)  For the purpose of Section 4(a)(ii), other documents to be delivered are:

<TABLE>
<CAPTION>
PARTY REQUIRED                                                      COVERED BY
TO DELIVER           FORM/DOCUMENT/          DATE BY WHICH TO      SECTION 3(D)
DOCUMENT               CERTIFICATE             BE DELIVERED       REPRESENTATION
--------------   ----------------------   ---------------------   --------------
<S>              <C>                      <C>                     <C>
Party A and      Any documents required   Upon the execution      Yes
Party B          by the receiving party   and delivery of this
                 to evidence the          Agreement
                 authority of the
                 delivering party or
                 its Credit Support
                 Provider, if any, for
                 it to execute and
                 deliver the Agreement,
                 this Confirmation, and
                 any Credit Support
                 Documents to which it
                 is a party, and to
                 evidence the authority
                 of the delivering
                 party or its Credit
                 Support Provider to
                 perform its
                 obligations under the
                 Agreement, this
                 Confirmation and any
                 Credit Support
                 Document, as the case
                 may be

Party A and      A certificate of an      Upon the execution      Yes
Party B          authorized officer of    and delivery of this
                 the party, as to the     Agreement
                 incumbency and
                 authority of the
                 respective officers of
                 the party signing the
                 Agreement, this
                 Confirmation, and any
                 relevant Credit
                 Support Document, as
                 the case may be

Party A          Annual Report of Party   Promptly upon           Yes
                 A's Credit Support       becoming publicly
                 Provider containing      available
                 consolidated financial
                 statements certified
                 by independent
                 certified public
                 accountants and
                 prepared in accordance
                 with generally
                 accepted accounting
                 principles in the
                 country in which Party
                 A's Credit Support
                 Provider is organized

Party A          Semi Annual Financial    Promptly upon           Yes
                 Statements of Party      becoming publicly
                 A's Credit Support       available
                 Provider containing
                 unaudited,
                 consolidated financial
                 statements of Party
                 A's Credit Support
                 Provider's Interim
                 Report prepared in
                 accordance with
                 generally accepted
                 accounting principles
                 in the country in
                 which Party A's Credit
                 Support Provider is
                 organized

Party A          A guarantee of Swiss     Upon the execution      No
                 Re                       and delivery of
                                          this Agreement

Party A          An opinion of counsel    Upon the execution      No
                 to Party A's Guarantor   and delivery of this
                                          Agreement
</TABLE>

                                      O-2-9

<PAGE>

PART 4. MISCELLANEOUS.

(a)  ADDRESS FOR NOTICES: For the purposes of Section 12(a) of this Agreement:

     Address for notices or communications to Party A:

     Address:        Swiss Re Financial Products Corporation
                     55 East 52nd Street
                     New York, New York 10055
                     Attention: Head of Operations
                     Facsimile No. (917) 322-7201

     (For all purposes)

     With a copy to: Swiss Re Financial Products Corporation
                     55 East 52nd Street
                     New York, New York 10055
                     Attention: Legal Department
                     Facsimile No.: (212) 317-5474

     Address for notices or communications to Party B:

                     U.S. Bank National Association
                     60 Livingston Avenue,
                     Mail Code EP-MN-WS3D
                     St. Paul, Minnesota 55107-2292
                     Attention: Structured Finance/SURF 2007-BC1

                     with a copy to:

                     Merrill Lynch Mortgage Lending, Inc.
                     650 Third Avenue South
                     Suite 1500
                     St. Paul, MN 55107
                     Attention: Trading Analytics -- SURF 2007-BC1
                     Telephone: 612-336-7300
                     Facsimile: 612-336-7415

                     (For all purposes)

(b)  PROCESS AGENT. For the purpose of Section 13(c):

     Party A appoints as its Process Agent: Not applicable.

     Party B appoints as its Process Agent: Not applicable.

(c)  OFFICES. The provisions of Section 10(a) will apply to this Agreement;
     neither Party A nor Party B has any Offices other than as set forth in the
     Notices Section.

(d)  MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:

     Party A is not a Multibranch Party.

     Party B is not a Multibranch Party.

                                     O-2-10

<PAGE>

(e)  CALCULATION AGENT. The Calculation Agent is Party A; provided, however,
     that if an Event of Default shall have occurred with respect to Party A,
     Party B shall have the right to appoint as Calculation Agent a third party,
     reasonably acceptable to Party A, the cost for which shall be borne by
     Party A.

          (f)  CREDIT SUPPORT DOCUMENT.

     Party A: The Credit Support Annex, and any guarantee in support of Party
              A's obligations under this Agreement.

     Party B: The Credit Support Annex, solely in respect of Party B's
              obligations under Paragraph 3(b) of the Credit Support Annex.

(g)  CREDIT SUPPORT PROVIDER.

     Party A: The guarantor under any guarantee in support of Party A's
              obligations under this Agreement.

     Party B: None.

(h)  GOVERNING LAW. The parties to this Agreement hereby agree that the law of
     the State of New York shall govern their rights and duties in whole,
     without regard to the conflict of law provisions thereof other than New
     York General Obligations Law Sections 5-1401 and 5-1402.

(i)  NETTING OF PAYMENTS. The parties agree that subparagraph (ii) of Section
     2(c) will apply to each Transaction hereunder.

(j)  AFFILIATE. "Affiliate" shall have the meaning assigned thereto in Section
     14; provided, however, that Party B shall be deemed to have no Affiliates
     for purposes of this Agreement, including for purposes of Section 6(b)(ii).

PART 5. OTHERS PROVISIONS.

(a)  DEFINITIONS. Unless otherwise specified in a Confirmation, this Agreement
     and each Transaction under this Agreement are subject to the 2000 ISDA
     Definitions as published and copyrighted in 2000 by the International Swaps
     and Derivatives Association, Inc. (the "DEFINITIONS"), and will be governed
     in all relevant respects by the provisions set forth in the Definitions,
     without regard to any amendment to the Definitions subsequent to the date
     hereof. The provisions of the Definitions are hereby incorporated by
     reference in and shall be deemed a part of this Agreement, except that (i)
     references in the Definitions to a "Swap Transaction" shall be deemed
     references to a "Transaction" for purposes of this Agreement, and (ii)
     references to a "Transaction" in this Agreement shall be deemed references
     to a "Swap Transaction" for purposes of the Definitions. Each term
     capitalized but not defined in this Agreement shall have the meaning
     assigned thereto in the Pooling and Servicing Agreement.

(b)  AMENDMENTS TO ISDA MASTER AGREEMENT.

     (i)  SINGLE AGREEMENT. Section 1(c) is hereby amended by the adding the
          words "including, for the avoidance of doubt, the Credit Support
          Annex" after the words "Master Agreement".

     (ii) CONDITIONS PRECEDENT. Section 2(a)(iii) is hereby amended by adding
          the following at the end thereof:

          Notwithstanding anything to the contrary in Section 2(a)(iii)(1), if
          an Event of Default with respect to Party B or Potential Event of
          Default with respect to Party B has occurred and been continuing for
          more than 30 Local Business Days and no Early Termination Date in
          respect of the Affected

                                     O-2-11

<PAGE>

          Transactions has occurred or been effectively designated by Party A,
          the obligations of Party A under Section 2(a)(i) shall cease to be
          subject to the condition precedent set forth in Section 2(a)(iii)(1)
          with respect to such specific occurrence of such Event of Default or
          such Potential Event of Default (the "SPECIFIC EVENT"); provided,
          however, for the avoidance of doubt, the obligations of Party A under
          Section 2(a)(i) shall be subject to the condition precedent set forth
          in Section 2(a)(iii)(1) (subject to the foregoing) with respect to any
          subsequent occurrence of the same Event of Default with respect to
          Party B or Potential Event of Default with respect to Party B after
          the Specific Event has ceased to be continuing and with respect to any
          occurrence of any other Event of Default with respect to Party B or
          Potential Event of Default with respect to Party B that occurs
          subsequent to the Specific Event.

     (iii) CHANGE OF ACCOUNT. Section 2(b) is hereby amended by the addition of
           the following after the word "delivery" in the first line thereof:

          "to another account in the same legal and tax jurisdiction as the
          original account".

     (iv) REPRESENTATIONS. Section 3 is hereby amended by adding at the end
          thereof the following subsection (g):

          "(g) Relationship Between Parties.

               (1)  Nonreliance. (i) It is not relying on any statement or
                    representation of the other party regarding the Transaction
                    (whether written or oral), other than the representations
                    expressly made in this Agreement or the Confirmation in
                    respect of that Transaction and (ii) it has consulted with
                    its own legal, regulatory, tax, business, investment,
                    financial and accounting advisors to the extent it has
                    deemed necessary, and it has made its own investment,
                    hedging and trading decisions based upon its own judgment
                    and upon any advice from such advisors as it has deemed
                    necessary and not upon any view expressed by the other
                    party.

               (2)  Evaluation and Understanding. (i) It has the capacity to
                    evaluate (internally or through independent professional
                    advice) the Transaction and has made its own decision to
                    enter into the Transaction and (ii) It understands the
                    terms, conditions and risks of the Transaction and is
                    willing and able to accept those terms and conditions and to
                    assume those risks, financially and otherwise.

               (3)  Purpose. It is entering into the Transaction for the
                    purposes of managing its borrowings or investments, hedging
                    its underlying assets or liabilities or in connection with a
                    line of business.

               (4)  Status of Parties. The other party is not acting as an
                    agent, fiduciary or advisor for it in respect of the
                    Transaction.

               (5)  Eligible Contract Participant. It is an "eligible swap
                    participant" as such term is defined in, Section 35.1(b)(2)
                    of the regulations (17 C.F.R. 35) promulgated under, and an
                    "eligible contract participant" as defined in Section
                    1(a)(12) of the Commodity Exchange Act, as amended."

     (v)  TRANSFER TO AVOID TERMINATION EVENT. Section 6(b)(ii) is hereby
          amended by (i) deleting the words "or if a Tax Event Upon Merger
          occurs and the Burdened Party is the Affected Party," and (ii) by
          deleting the words "to transfer" and inserting the words "to effect a
          Permitted Transfer" in lieu thereof.

     (vi) JURISDICTION. Section 13(b) is hereby amended by: (i) deleting in the
          second line of subparagraph (i) thereof the word "non-", (ii) deleting
          "; and" from the end of subparagraph 1 and inserting "." in lieu
          thereof, and (iii) deleting the final paragraph thereof.

                                     O-2-12

<PAGE>

     (vii) LOCAL BUSINESS DAY. The definition of Local Business Day in Section
          14 is hereby amended by the addition of the words "or any Credit
          Support Document" after "Section 2(a)(i)" and the addition of the
          words "or Credit Support Document" after "Confirmation".

(c)  ADDITIONAL TERMINATION EVENTS. The following Additional Termination Events
     will apply:

     (i)  FIRST RATING TRIGGER COLLATERAL. If (A) it is not the case that a
          Moody's Second Trigger Ratings Event has occurred and been continuing
          for 30 or more Local Business Days and (B) Party A has failed to
          comply with or perform any obligation to be complied with or performed
          by Party A in accordance with the Credit Support Annex, then an
          Additional Termination Event shall have occurred with respect to Party
          A and Party A shall be the sole Affected Party with respect to such
          Additional Termination Event.

     (ii) SECOND RATING TRIGGER REPLACEMENT. If (A) a Required Ratings Downgrade
          Event has occurred and been continuing for 30 or more Local Business
          Days and (B) (i) at least one Eligible Replacement has made a Firm
          Offer to be the transferee of all of Party A's rights and obligations
          under this Agreement (and such Firm Offer remains an offer that will
          become legally binding upon such Eligible Replacement upon acceptance
          by the offeree) and/or (ii) an Eligible Guarantor has made a Firm
          Offer to provide an Eligible Guarantee (and such Firm Offer remains an
          offer that will become legally binding upon such Eligible Guarantor
          immediately upon acceptance by the offeree), then an Additional
          Termination Event shall have occurred with respect to Party A and
          Party A shall be the sole Affected Party with respect to such
          Additional Termination Event.

     (iii) RESERVED.

     (iv) PROVISION OF INFORMATION REQUIRED BY REGULATION AB. Party A shall fail
          to comply with the provisions of Part 5(e) upon the occurrence of a
          Swap Disclosure Event. For all purposes of this Agreement, Party A
          shall be the sole Affected Party with respect to such Additional
          Termination Event.

     (v)  OPTIONAL TERMINATION OF THE SECURITIZATION. If, at any time, the
          Terminator purchases the Mortgage Loans pursuant to Section 9.01 of
          the Pooling and Servicing Agreement, then an Additional Termination
          Event shall have occurred and Party B shall be the sole Affected Party
          with respect thereto; provided, however, that notwithstanding Section
          6(b)(iv) of the Master Agreement, only Party B shall have the right to
          designate an Early Termination Date in respect of this Additional
          Termination Event; provided, further, that the Early Termination Date
          shall not be prior to the Optional Termination Date.

(d)  REQUIRED RATINGS DOWNGRADE EVENT. In the event that a "REQUIRED RATINGS
     DOWNGRADE EVENT" from any of the Swap Rating Agencies shall occur and be
     continuing, then Party A shall, as soon as reasonably practicable, at its
     own expense, using commercially reasonable efforts, procure either (A) a
     Permitted Transfer or (B) an Eligible Guarantee from an Eligible Guarantor.

(e)  COMPLIANCE WITH REGULATION AB. (i) For purposes of Item 1115 of Subpart
     229.1100 - Asset Backed Securities (Regulation AB) (17 C.F.R.
     ss.ss.229.1100 - 229.1123) ("Regulation AB") under the Securities Act of
     1933, as amended, and the Securities Exchange Act of 1934, as amended (the
     "Exchange Act"), as amended and interpreted by the Securities and Exchange
     Commission and its staff, if the Depositor or Party B makes a
     determination, acting reasonably and in good faith, that (x) the applicable
     "significance percentage" with respect to this Agreement has been reached,
     and (y) it has a reporting obligation under the Exchange Act (a "Swap
     Disclosure Event"), then Party A shall (or shall cause its Credit Support
     Provider to), within ten (10) calendar days after notice to that effect, at
     its sole expense, take one of the following actions (each subject to
     satisfaction of the Rating Agency Condition): (1) provide (including, if
     permitted by Regulation AB, provision by reference to reports filed
     pursuant to the Exchange Act or otherwise publicly available information):
     (A) the financial data required by Item 301 of Regulation S-K (17 C.F.R.
     Section 229.301), pursuant to Item 1115(b)(1); (B) financial statements
     meeting the requirements of Regulation

                                     O-2-13

<PAGE>

     S-X (17 C.F.R. Sections 210.1-01 through 210.12-29, but excluding 17 C.F.R.
     ss. 210.3-05 and Article 11 of Regulation S-X (17 C.F.R. ss. ss. 210.11-01
     through 210.11-03)), pursuant to Item 1115(b)(2); or (C) such other
     financial information as may at the time be required or permitted to be
     provided in satisfaction of the requirements of Item 1115(b), together with
     accountants consents and/or a procedure letter relating thereto; or (2)
     secure an Approved Replacement that is able to comply with the requirements
     of Item 1115(b) of Regulation AB to replace Party A as party to this
     Agreement, on substantially similar terms, the debt rating of which entity
     (or credit support provider therefor) meets or exceeds the applicable
     requirements of the applicable Rating Agencies.

     (ii) For so long as the aggregate significance percentage is 10% or more,
     Party A shall (or shall cause its Credit Support Provider to) provide any
     updates to the information provided pursuant to clause (i)(1) above to the
     Depositor within five (5) Business Days following availability thereof (but
     in no event more than 45 days after the end of each of Party A's Credit
     Support Provider's fiscal half for any half-year update, and in no event
     more than 90 days after the end of each of Party A's Credit Support
     Provider's fiscal year for any annual update).

     (iii) All information provided pursuant to clauses (i)(1) and (ii) above
     (all such information, "Swap Financial Disclosure") shall be in a form
     suitable for conversion to the format required for filing by the Depositor
     with the Commission via the Electronic Data Gathering and Retrieval System
     (EDGAR). In addition, any such information, if audited, shall be
     accompanied by any necessary auditor's consents or, if such information is
     unaudited, shall be accompanied by an appropriate agreed-upon procedures
     letter from Party A's accountants. If permitted by Regulation AB, any such
     information may be provided by reference to or incorporation by reference
     from reports filed pursuant to the Exchange Act.

     (iv) Third Party Beneficiary. The Depositor shall be an express third party
     beneficiary of this Agreement as if a party hereto to the extent of the
     Depositor's rights explicitly specified in this Part 5(e).

(f)  TRANSFERS.

     (i)  Section 7 is hereby amended to read in its entirety as follows:

          "Except with respect to any Permitted Transfer pursuant to Section
          6(b)(ii), Part 5(d), Part 5(e), or the succeeding sentence, neither
          Party A nor Party B is permitted to assign, novate or transfer
          (whether by way of security or otherwise) as a whole or in part any of
          its rights, obligations or interests under the Agreement or any
          Transaction unless (a) the prior written consent of the other party is
          obtained, and (b) the Rating Agency Condition has been satisfied with
          respect to S&P and DBRS. At any time at which no Relevant Entity has
          credit ratings at least equal to the Approved Ratings Threshold, Party
          A may make a Permitted Transfer."

     (ii) If an Eligible Replacement has made a Firm Offer (which remains an
          offer that will become legally binding upon acceptance by Party B) to
          be the transferee pursuant to a Permitted Transfer, Party B shall, at
          Party A's written request and at Party A's expense, take any
          reasonable steps required to be taken by Party B to effect such
          transfer.

(g)  NON-RECOURSE. Party A acknowledges and agrees that, notwithstanding any
     provision in this Agreement to the contrary, the obligations of Party B
     hereunder are limited recourse obligations of Party B, payable solely from
     the Issuing Entity, in accordance with the priority of payments and other
     terms of the Pooling and Servicing Agreement and that Party A will not have
     any recourse to any of the directors, officers, employees, shareholders or
     affiliates of the Party B with respect to any claims, losses, damages,
     liabilities, indemnities or other obligations in connection with any
     transactions contemplated hereby. In the event that the funds on deposit
     with the Issuing Entity should be insufficient to satisfy all claims
     outstanding and following the realization of all funds on deposit with the
     Issuing Entity, any claims against or obligations of Party B under the ISDA
     Master Agreement or any other confirmation thereunder still outstanding
     shall be extinguished and thereafter not revive. Party B shall not have
     liability for any failure or delay in making a payment hereunder

                                     O-2-14

<PAGE>

     to Party A due to any failure or delay in receiving amounts held by the
     Trustee. This provision will survive the termination of this Agreement.

(h)  TIMING OF PAYMENTS BY PARTY B UPON EARLY TERMINATION. Notwithstanding
     anything to the contrary in Section 6(d)(ii), to the extent that all or a
     portion (in either case, the "Unfunded Amount") of any amount that is
     calculated as being due in respect of any Early Termination Date under
     Section 6(e) from Party B to Party A will be paid by Party B from amounts
     other than any upfront payment paid to Party B by an Eligible Replacement
     that has entered a Replacement Transaction with Party B, then such Unfunded
     Amount shall be due on the next subsequent Distribution Date following the
     date on which the payment would have been payable as determined in
     accordance with Section 6(d)(ii), and on any subsequent Distribution Dates
     until paid in full (or if such Early Termination Date is the final
     Distribution Date, on such final Distribution Date); provided, however,
     that if the date on which the payment would have been payable as determined
     in accordance with Section 6(d)(ii) is a Distribution Date, such payment
     will be payable on such Distribution Date.

(i)  RATING AGENCY NOTIFICATIONS. Notwithstanding any other provision of this
     Agreement, no Early Termination Date shall be effectively designated
     hereunder by Party B and no transfer of any rights or obligations under
     this Agreement shall be made by either party unless each Swap Rating Agency
     has been given prior written notice of such designation or transfer.

(j)  NO SET-OFF. Except as expressly provided for in Section 2(c), Section 6 or
     Part 1(f)(i)(D) hereof, and notwithstanding any other provision of this
     Agreement or any other existing or future agreement, each party irrevocably
     waives any and all rights it may have to set off, net, recoup or otherwise
     withhold or suspend or condition payment or performance of any obligation
     between it and the other party hereunder against any obligation between it
     and the other party under any other agreements. Section 6(e) shall be
     amended by deleting the following sentence: "The amount, if any, payable in
     respect of an Early Termination Date and determined pursuant to this
     Section will be subject to any Set-off."

(k)  AMENDMENT. Notwithstanding any provision to the contrary in this Agreement,
     no amendment of either this Agreement or any Transaction under this
     Agreement shall be permitted by either party unless each of the Swap Rating
     Agencies has been provided prior written notice of the same and such
     amendment satisfies the Rating Agency Condition with respect to S&P and
     DBRS.

(l)  NOTICE OF CERTAIN EVENTS OR CIRCUMSTANCES. Each Party agrees, upon learning
     of the occurrence or existence of any event or condition that constitutes
     (or that with the giving of notice or passage of time or both would
     constitute) an Event of Default or Termination Event with respect to such
     party, promptly to give the other Party and to each Swap Rating Agency
     notice of such event or condition; provided that failure to provide notice
     of such event or condition pursuant to this Part 5(l) shall not constitute
     an Event of Default or a Termination Event.

(m)  PROCEEDINGS. No Relevant Entity shall institute against, or cause any other
     person to institute against, or join any other person in instituting
     against Party B in any bankruptcy, reorganization, arrangement, insolvency
     or liquidation proceedings or other proceedings under any federal or state
     bankruptcy or similar law for a period of one year (or, if longer, the
     applicable preference period) and one day following payment in full of the
     Certificates and any Notes. This provision will survive the termination of
     this Agreement.

(n)  TRUSTEE LIABILITY LIMITATIONS. It is expressly understood and agreed by the
     parties hereto that (a) this Agreement is executed by U.S. Bank National
     Association not in its individual capacity, but solely as Trustee in the
     exercise of the powers and authority conferred and invested in it
     thereunder; (b) each of the representations, undertakings and agreements
     herein made on behalf of the Issuing Entity is made and intended not as
     personal representations of the Cap Trustee but is made and intended for
     the purpose of binding only the Issuing Entity; and (d) under no
     circumstances shall U.S. Bank National Association in its individual
     capacity be personally liable for any payments hereunder or for the breach
     or failure of any obligation, representation, warranty or covenant made or
     undertaken under this Agreement. Nothing herein contained shall be
     construed as creating any liability on U.S. Bank National Association,
     individually or

                                     O-2-15

<PAGE>

     personally, to perform any covenant either expressed or implied contained
     herein, all such liability, if any, being expressly waived by the parties
     who are signatories to this Agreement and by any person claiming by,
     through or under such parties.

(o)  SEVERABILITY. If any term, provision, covenant, or condition of this
     Agreement, or the application thereof to any party or circumstance, shall
     be held to be invalid or unenforceable (in whole or in part) in any
     respect, the remaining terms, provisions, covenants, and conditions hereof
     shall continue in full force and effect as if this Agreement had been
     executed with the invalid or unenforceable portion eliminated, so long as
     this Agreement as so modified continues to express, without material
     change, the original intentions of the parties as to the subject matter of
     this Agreement and the deletion of such portion of this Agreement will not
     substantially impair the respective benefits or expectations of the
     parties; provided, however, that this severability provision shall not be
     applicable if any provision of Section 2, 5, 6, or 13 (or any definition or
     provision in Section 14 to the extent it relates to, or is used in or in
     connection with any such Section) shall be so held to be invalid or
     unenforceable.

     The parties shall endeavor to engage in good faith negotiations to replace
     any invalid or unenforceable term, provision, covenant or condition with a
     valid or enforceable term, provision, covenant or condition, the economic
     effect of which comes as close as possible to that of the invalid or
     unenforceable term, provision, covenant or condition.

(p)  AGENT FOR PARTY B. Party A acknowledges that U.S. Bank National
     Association, may act as Party B's agent to carry out certain functions on
     behalf of Party B in respect of this Confirmation, and that U.S. Bank
     National Association shall be entitled to give notices and to perform and
     satisfy the obligations of Party B hereunder on behalf of Party B.

(q)  ESCROW PAYMENTS. If (whether by reason of the time difference between the
     cities in which payments are to be made or otherwise) it is not possible
     for simultaneous payments to be made on any date on which both parties are
     required to make payments hereunder, either Party may at its option and in
     its sole discretion notify the other Party that payments on that date are
     to be made in escrow. In this case deposit of the payment due earlier on
     that date shall be made by 2:00 pm (local time at the place for the earlier
     payment) on that date with an escrow agent selected by the notifying party,
     accompanied by irrevocable payment instructions (i) to release the
     deposited payment to the intended recipient upon receipt by the escrow
     agent of the required deposit of any corresponding payment payable by the
     other party on the same date accompanied by irrevocable payment
     instructions to the same effect or (ii) if the required deposit of the
     corresponding payment is not made on that same date, to return the payment
     deposited to the party that paid it into escrow. The party that elects to
     have payments made in escrow shall pay all costs of the escrow
     arrangements.

(r)  CONSENT TO RECORDING. Each party hereto consents to the monitoring or
     recording, at any time and from time to time, by the other party of any and
     all communications between trading, marketing, and operations personnel of
     the parties and their Affiliates, waives any further notice of such
     monitoring or recording, and agrees to notify such personnel of such
     monitoring or recording.

(s)  WAIVER OF JURY TRIAL. Each party waives any right it may have to a trial by
     jury in respect of any in respect of any suit, action or proceeding
     relating to this Agreement or any Credit Support Document.

(t)  FORM OF ISDA MASTER AGREEMENT. Party A and Party B hereby agree that the
     text of the body of the ISDA Master Agreement is intended to be the printed
     form of the ISDA Master Agreement (Multicurrency - Crossborder) as
     published and copyrighted in 1992 by the International Swaps and
     Derivatives Association, Inc.

(u)  PAYMENT INSTRUCTIONS. Party A hereby agrees that, unless notified in
     writing by Party B of other payment instructions, any and all amounts
     payable by Party A to Party B under this Agreement shall be paid to the
     account specified in Item 4 of this Confirmation, below.

(v)  ADDITIONAL REPRESENTATIONS.

                                     O-2-16

<PAGE>

     (i)  REPRESENTATIONS OF PARTY A. Party A represents to Party B on the date
          on which Party A enters into each Transaction that:--

          (1)  Party A's obligations under this Agreement rank pari passu with
               all of Party A's other unsecured, unsubordinated obligations
               except those obligations preferred by operation of law.

     (ii) CAPACITY. Party A represents to Party B on the date on which Party A
          enters into this Agreement that it is entering into the Agreement and
          the Transaction as principal and not as agent of any person. Party B
          represents to Party A on the date on which Party B enters into this
          Agreement that it is entering into the Agreement and the Transaction
          in its capacity as Trustee.

(w)  ACKNOWLEDGEMENTS.

     (i)  SUBSTANTIAL FINANCIAL TRANSACTIONS. Each party hereto is hereby
          advised and acknowledges as of the date hereof that the other party
          has engaged in (or refrained from engaging in) substantial financial
          transactions and has taken (or refrained from taking) other material
          actions in reliance upon the entry by the parties into the Transaction
          being entered into on the terms and conditions set forth herein and in
          the Pooling and Servicing Agreement relating to such Transaction, as
          applicable. This paragraph shall be deemed repeated on the trade date
          of each Transaction.

     (ii) BANKRUPTCY CODE. Subject to Part 5(m), without limiting the
          applicability if any, of any other provision of the U.S. Bankruptcy
          Code as amended (the "Bankruptcy Code") (including without limitation
          Sections 362, 546, 556, and 560 thereof and the applicable definitions
          in Section 101 thereof), the parties acknowledge and agree that all
          Transactions entered into hereunder will constitute "forward
          contracts" or "swap agreements" as defined in Section 101 of the
          Bankruptcy Code or "commodity contracts" as defined in Section 761 of
          the Bankruptcy Code, that the rights of the parties under Section 6 of
          this Agreement will constitute contractual rights to liquidate
          Transactions, that any margin or collateral provided under any margin,
          collateral, security, pledge, or similar agreement related hereto will
          constitute a "margin payment" as defined in Section 101 of the
          Bankruptcy Code, and that the parties are entities entitled to the
          rights under, and protections afforded by, Sections 362, 546, 556, and
          560 of the Bankruptcy Code.

(x)  RESERVED.

(y)  RESERVED.

(z)  ADDITIONAL DEFINITIONS.

               As used in this Agreement, the following terms shall have the
     meanings set forth below, unless the context clearly requires otherwise:

          "APPROVED RATINGS THRESHOLD" means each of the S&P Approved Ratings
          Threshold, the Moody's First Trigger Ratings Threshold, and the DBRS
          Approved Ratings Threshold.

          "APPROVED REPLACEMENT" means, with respect to a Market Quotation, an
          entity making such Market Quotation, which entity would satisfy
          conditions (a), (b), and (c) of the definition of Permitted Transfer
          (as determined by Party B in its sole discretion, acting in a
          commercially reasonable manner) if such entity were a Transferee, as
          defined in the definition of Permitted Transfer.

          "DBRS" means Dominion Bond Rating Service, or any successor thereto.

          "DBRS APPROVED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee, or an Eligible Replacement, a
          long-term unsecured and unsubordinated debt

                                     O-2-17

<PAGE>

          rating from DBRS of "AA(low)" and a short-term unsecured and
          unsubordinated debt rating from DBRS of "[R-1(middle)".

          "DBRS REQUIRED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee or an Eligible Replacement, a
          long-term unsecured and unsubordinated debt rating from DBRS of "BBB".

          "DERIVATIVE PROVIDER TRIGGER EVENT" means (i) an Event of Default with
          respect to which Party A is a Defaulting Party, (ii) a Termination
          Event with respect to which Party A is the sole Affected Party or
          (iii) an Additional Termination Event with respect to which Party A is
          the sole Affected Party.

          "ELIGIBLE GUARANTEE" means an unconditional and irrevocable guarantee
          of all present and future obligations (for the avoidance of doubt, not
          limited to payment obligations) of Party A or an Eligible Replacement
          to Party B under this Agreement that is provided by an Eligible
          Guarantor as principal debtor rather than surety and that is directly
          enforceable by Party B, the form and substance of which guarantee are
          subject to the Rating Agency Condition with respect to S&P and DBRS],
          and either (A) a law firm has given a legal opinion confirming that
          none of the guarantor's payments to Party B under such guarantee will
          be subject to Tax collected by withholding or (B) such guarantee
          provides that, in the event that any of such guarantor's payments to
          Party B are subject to Tax collected by withholding, such guarantor is
          required to pay such additional amount as is necessary to ensure that
          the net amount actually received by Party B (free and clear of any Tax
          collected by withholding) will equal the full amount Party B would
          have received had no such withholding been required.

          "ELIGIBLE GUARANTOR" means an entity that (A) has credit ratings from
          S&P at least equal to the S&P Approved Ratings Threshold and from DBRS
          at least equal to the DBRS Approved Ratings Threshold and (B) has
          credit ratings from Moody's at least equal to the Moody's Second
          Trigger Ratings Threshold, provided, for the avoidance of doubt, that
          an Eligible Guarantee of an Eligible Guarantor with credit ratings
          below the Approved Ratings Threshold will not cause a Collateral Event
          (as defined in the Credit Support Annex) not to occur or continue.

          "ELIGIBLE REPLACEMENT" means an entity (i) that (a) has credit ratings
          from S&P at least equal to the S&P Approved Ratings Threshold and from
          DBRS at least equal to the DBRS Approved Ratings Threshold and (b) has
          credit ratings from Moody's at least equal to the Moody's Second
          Trigger Ratings Threshold, provided, for the avoidance of doubt, that
          an Eligible Guarantee of an Eligible Guarantor with credit ratings
          below either the S&P Approved Ratings Threshold or the DBRS Approved
          Ratings Threshold will not cause a Collateral Event (as defined in the
          Credit Support Annex) not to occur or continue, or (ii) the present
          and future obligations (for the avoidance of doubt, not limited to
          payment obligations) of which entity to Party B under this Agreement
          are guaranteed pursuant to an Eligible Guarantee.

          "ESTIMATED SWAP TERMINATION PAYMENT" means, with respect to an Early
          Termination Date, an amount determined by Party A in good faith and in
          a commercially reasonable manner as the maximum payment that could be
          owed by Party B to Party A in respect of such Early Termination Date
          pursuant to Section 6(e) of the ISDA Master Agreement, taking into
          account then current market conditions.

          "FIRM OFFER" means (A) with respect to an Eligible Replacement, a
          quotation from such Eligible Replacement (i) in an amount equal to the
          actual amount payable by or to Party B in consideration of an
          agreement between Party B and such Eligible Replacement to replace
          Party A as the counterparty to this Agreement by way of novation or,
          if such novation is not possible, an agreement between Party B and
          such Eligible Replacement to enter into a Replacement Transaction
          (assuming that all Transactions hereunder become Terminated
          Transactions), and (ii) that constitutes an offer by such Eligible
          Replacement to replace Party A as the counterparty to this Agreement
          or enter a Replacement Transaction that will become legally binding
          upon such Eligible Replacement upon acceptance by Party B, and (B)
          with respect to an Eligible Guarantor, an offer by such Eligible

                                     O-2-18

<PAGE>

          Guarantor to provide an Eligible Guarantee that will become legally
          binding upon such Eligible Guarantor upon acceptance by the offeree.

          "MOODY'S" means Moody's Investors Service, Inc., or any successor
          thereto.

          "MOODY'S FIRST TRIGGER RATINGS EVENT" means that no Relevant Entity
          has credit ratings from Moody's at least equal to the Moody's First
          Trigger Ratings Threshold.

          "MOODY'S FIRST TRIGGER RATINGS THRESHOLD" means, with respect to Party
          A, the guarantor under an Eligible Guarantee or an Eligible
          Replacement, (i) if such entity has a short-term unsecured and
          unsubordinated debt rating from Moody's, a long-term unsecured and
          unsubordinated debt rating or counterparty rating from Moody's of "A2"
          and a short-term unsecured and unsubordinated debt rating from Moody's
          of "Prime-1", or (ii) if such entity does not have a short-term
          unsecured and unsubordinated debt rating or counterparty rating from
          Moody's, a long-term unsecured and unsubordinated debt rating or
          counterparty rating from Moody's of "A1".

          "MOODY'S SECOND TRIGGER RATINGS EVENT" means that no Relevant Entity
          has credit ratings from Moody's at least equal to the Moody's Second
          Trigger Rating Threshold.

          "MOODY'S SECOND TRIGGER RATINGS THRESHOLD" means, with respect to
          Party A, the guarantor under an Eligible Guarantee or an Eligible
          Replacement, (i) if such entity has a short-term unsecured and
          unsubordinated debt rating from Moody's, a long-term unsecured and
          unsubordinated debt rating or counterparty rating from Moody's of "A3"
          and a short-term unsecured and unsubordinated debt rating from Moody's
          of "Prime-2", or (ii) if such entity does not have a short-term
          unsecured and unsubordinated debt rating from Moody's, a long-term
          unsecured and unsubordinated debt rating or counterparty rating from
          Moody's of "A3".

          "PERMITTED TRANSFER" means a transfer by novation by Party A pursuant
          to Section 6(b)(ii), Part 5(d), Part 5(e), or the second sentence of
          Section 7 (as amended herein) to a transferee (the "TRANSFEREE") of
          all, but not less than all, of Party A's rights, liabilities, duties
          and obligations under this Agreement, with respect to which transfer
          each of the following conditions is satisfied: (a) the Transferee is
          an Eligible Replacement; (b) Party A and the Transferee are both
          "dealers in notional principal contracts" within the meaning of
          Treasury regulations section 1.1001-4; (c) as of the date of such
          transfer the Transferee would not be required to withhold or deduct on
          account of Tax from any payments under this Agreement or would be
          required to gross up for such Tax under Section 2(d)(i)(4); (d) an
          Event of Default or Termination Event would not occur as a result of
          such transfer; (e) pursuant to a written instrument (the "TRANSFER
          AGREEMENT"), the Transferee acquires and assumes all rights and
          obligations of Party A under the Agreement and the relevant
          Transaction; (f) Party B shall have determined, in its sole
          discretion, acting in a commercially reasonable manner, that such
          Transfer Agreement is effective to transfer to the Transferee all, but
          not less than all, of Party A's rights and obligations under the
          Agreement and all relevant Transactions; (g) Party A will be
          responsible for any costs or expenses incurred in connection with such
          transfer (including any replacement cost of entering into a
          replacement transaction); (h) either (A) Moody's has been given prior
          written notice of such transfer and the Rating Agency Condition is
          satisfied with respect to S&P and DBRS or (B) each Swap Rating Agency
          has been given prior written notice of such transfer and such transfer
          is in connection with the assignment and assumption of this Agreement
          without modification of its terms, other than party names, dates
          relevant to the effective date of such transfer, tax representations
          (provided that the representations in Part 2(a)(i) are not modified)
          and any other representations regarding the status of the substitute
          counterparty of the type included in Part 5(b)(iv), Part 5(v)(i)(2) or
          Part 5(v)(ii), notice information and account details; and (i) such
          transfer otherwise complies with the terms of the Pooling and
          Servicing Agreement.

          "RATING AGENCY CONDITION" means, with respect to any particular
          proposed act or omission to act hereunder and each Swap Rating Agency
          specified in connection with such proposed act or omission, that the
          party acting or failing to act must consult with each of the specified
          Swap Rating Agencies and receive from each such Swap Rating Agency a
          prior written confirmation that the

                                     O-2-19

<PAGE>

          proposed action or inaction would not cause a downgrade or withdrawal
          of the then-current rating of any Certificates or Notes.

          "RELEVANT ENTITY" means Party A and, to the extent applicable, a
          guarantor under an Eligible Guarantee.

          "REPLACEMENT TRANSACTION" means, with respect to any Terminated
          Transaction or group of Terminated Transactions, a transaction or
          group of transactions that (i) would have the effect of preserving for
          Party B the economic equivalent of any payment or delivery (whether
          the underlying obligation was absolute or contingent and assuming the
          satisfaction of each applicable condition precedent) by the parties
          under Section 2(a)(i) in respect of such Terminated Transaction or
          group of Terminated Transactions that would, but for the occurrence of
          the relevant Early Termination Date, have been required after that
          Date, and (ii) has terms which are substantially the same as this
          Agreement, including, without limitation, rating triggers, Regulation
          AB compliance, and credit support documentation, save for the
          exclusion of provisions relating to Transactions that are not
          Terminated Transaction, as determined by Party B in its sole
          discretion, acting in a commercially reasonable manner.

          "REQUIRED RATINGS DOWNGRADE EVENT" means that no Relevant Entity has
          credit ratings from a Swap Rating Agency at least equal to the
          Required Ratings Threshold for that Swap Rating Agency.

          "REQUIRED RATINGS THRESHOLD" means each of the S&P Required Ratings
          Threshold, the Moody's Second Trigger Ratings Threshold, and the DBRS
          Required Ratings Threshold.

          "S&P" means Standard & Poor's Ratings Services, a division of The
          McGraw-Hill Companies, Inc., or any successor thereto.

          "S&P APPROVED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee or an Eligible Replacement, a
          short-term unsecured and unsubordinated debt rating from S&P of "A-1",
          or, if such entity does not have a short-term unsecured and
          unsubordinated debt rating from S&P, a long-term unsecured and
          unsubordinated debt rating or counterparty rating from S&P of "A+".

          "S&P REQUIRED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee or an Eligible Replacement, a
          long-term unsecured and unsubordinated debt rating or counterparty
          rating from S&P of "BBB+".

          "SWAP RATING AGENCIES" means, with respect to any date of
          determination, each of S&P, Moody's, and DBRS, to the extent that each
          such rating agency is then providing a rating for any of the Specialty
          Underwriting and Residential Finance, Series 2007-BC1 (the
          "Certificates") or any notes backed by the Certificates (the "Notes").

(aa) RETURN OF AMOUNTS RECEIVED BY MLML OR ITS AFFILIATES. Merrill Lynch
     Mortgage Lending, Inc. ("MLML") agrees and acknowledges that amounts paid
     hereunder are not intended to benefit the holder of any class of
     Certificates rated by any Swap Rating Agency if such holder is MLML or any
     of its affiliates. If MLML or any of its affiliates receives any such
     amounts, it will promptly remit (or, if such amounts are received by an
     affiliate of MLML, MLML hereby agrees that it will cause such affiliate to
     promptly remit) such amounts to the Trustee, whereupon such Trustee will
     promptly remit such amounts to Party A. MLML further agrees to provide
     notice to Party A upon any remittance to the Trustee.

               [Remainder of this page intentionally left blank.]

                                     O-2-20

<PAGE>

4.   Account Details and Settlement Information:

Payments to Party A: JPMorgan Chase Bank
                     SWIFT: CHASUS33
                     Account of: Swiss Re Financial Products
                     Account No.: 066-911184
                     ABA# 021000021

Payments to Party B: U.S Bank National Association
                     ABA#: 091000022
                     DDA#: 1731 0332 2058
                     DDA Name: Structured Finance Wire Clearing
                     FFC: 108693001/SURF07-BC1 Cap Contract Account

This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

                                     O-2-21

<PAGE>

We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.

Very truly yours,

SWISS RE FINANCIAL PRODUCTS CORPORATION

C. By:
       ------------------------------
   Name:
         ----------------------------
   Title:
          ---------------------------

Party B, acting through its duly authorized signatory, hereby agrees to, accepts
and confirms the terms of the foregoing as of the date hereof.

U.S. Bank National Association, in its capacity as trustee with respect to
Specialty Underwriting and Residential Finance, Series 2007-BC1 (the "Trustee")

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

Agreed and acknowledged by:

MERRILL LYNCH MORTGAGE LENDING, INC.

D. By:
       ------------------------------
   Name:
         ----------------------------
   Title:
          ---------------------------

                                     O-2-22
<PAGE>

                                   SCHEDULE I

AMORTIZATION SCHEDULE, subject to adjustment in accordance with the Following
Business Day Convention

<TABLE>
<CAPTION>
From and including    To but excluding   Notional Amount (USD)   Cap Rate (%)
------------------   -----------------   ---------------------   ------------
<S>                  <C>                 <C>                     <C>
 January 24, 2007    February 25, 2007       330,392,000.00          7.264
 February 25, 2007     March 25, 2007        327,487,454.00          8.324
  March 25, 2007       April 25, 2007        323,656,425.00          7.504
  April 25, 2007        May 25, 2007         318,902,800.00          7.759
   May 25, 2007        June 25, 2007         313,230,433.00          7.504
   June 25, 2007       July 25, 2007         306,653,827.00          7.760
</TABLE>

                                     O-2-23

<PAGE>

                                     ANNEX A

                    PARAGRAPH 13 OF THE CREDIT SUPPORT ANNEX

                                 SEE EXHIBIT O-4

                                     O-2-24

<PAGE>

                                   EXHIBIT O-3

                  FORM OF SUBORDINATE CERTIFICATE CAP CONTRACT

DATE:               JANUARY 24, 2007

TO:                 U.S. Bank National Association, in its capacity as
                    Trustee with respect to Specialty Underwriting and
                    Residential Finance Trust, Series 2007-BC1 (the
                    "Trustee")

                    60 Livingston Avenue,

                    Mail Code EP-MN-WS3D

                    St. Paul, Minnesota 55107-2292

                    Attention: Structured Finance/SURF 2007-BC1

FROM:               SWISS RE FINANCIAL PRODUCTS CORPORATION

SUBJECT:            Fixed Income Derivatives Confirmation

REFERENCE NUMBER:   1234431

The purpose of this long-form confirmation ("CONFIRMATION") is to confirm the
terms and conditions of the current Transaction entered into on the Trade Date
specified below (the "TRANSACTION") between Swiss Re Financial Products
Corporation ("PARTY A") and U.S. Bank National Association, in its capacity as
Trustee with respect to Specialty Underwriting and Residential Finance, Series
2007-BC1 (the "Trustee") ("PARTY B") created under the Pooling and Servicing
Agreement, dated as of January 1, 2007, among Party A and Party B (the "POOLING
AND SERVICING AGREEMENT"). This Confirmation evidences a complete and binding
agreement between you and us to enter into the Transaction on the terms set
forth below and replaces any previous agreement between us with respect to the
subject matter hereof. This Confirmation constitutes a "CONFIRMATION" and also
constitutes a "SCHEDULE" as referred to in the ISDA Master Agreement, and
Paragraph 13 of a Credit Support Annex to the Schedule.

2.   This Confirmation shall supplement, form a part of, and be subject to an
     agreement in the form of the ISDA Master Agreement (Multicurrency - Cross
     Border) as published and copyrighted in 1992 by the International Swaps and
     Derivatives Association, Inc. (the "ISDA MASTER AGREEMENT"), as if Party A
     and Party B had executed an agreement in such form on the date hereof, with
     a Schedule as set forth in Item 3 of this Confirmation, and an ISDA Credit
     Support Annex (Bilateral Form - ISDA Agreements Subject to New York Law
     Only version) as published and copyrighted in 1994 by the International
     Swaps and Derivatives Association, Inc., with Paragraph 13 thereof as set
     forth in Annex A hereto (the "CREDIT SUPPORT ANNEX"). For the avoidance of
     doubt, the Transaction described herein shall be the sole Transaction
     governed by such ISDA Master Agreement. In the event of any inconsistency
     among any of the following documents, the relevant document first listed
     shall govern: (i) this Confirmation, exclusive of the provisions set forth
     in Item 3 hereof and Annex A hereto; (ii) the provisions set forth in Item
     3 hereof, which are incorporated by reference into the Schedule; (iii) the
     Credit Support Annex; (iv) the Definitions; and (v) the ISDA Master
     Agreement.

                                      O-2-1

<PAGE>

     Each reference herein to a "Section" (unless specifically referencing the
     Pooling and Servicing Agreement) or to a "Section" "of this Agreement" will
     be construed as a reference to a Section of the ISDA Master Agreement; each
     herein reference to a "Part" will be construed as a reference to the
     provisions herein deemed incorporated in a Schedule to the ISDA Master
     Agreement; each reference herein to a "Paragraph" will be construed as a
     reference to a Paragraph of the Credit Support Annex.

2.   The terms of the particular Transaction to which this Confirmation relates
     are as follows:

<TABLE>
<S>                           <C>
Type of Transaction:          Interest Rate Cap

Notional Amount:              With respect to any Calculation Period, the lesser
                              of: (i) the amount set forth on Schedule I
                              attached hereto for such Calculation Period
                              and(ii) the Class Certificate Principal Balance of
                              the Class M-1, M-2, M-3, M-4, M-5,M-6, B-1, B-2
                              and B-3 Certificates (as defined in the Pooling
                              and Servicing Agreement) for such Floating Rate
                              Payer Payment Date. The Trustee under the Pooling
                              and Servicing Agreement shall provide at least
                              five (5) business days notice prior to each
                              Floating Rate Payer Payment Date for each
                              Calculation Period to Party A if the Class
                              Certificate Principal Balance of the Class M-1,
                              M-2, M-3, M-4, M-5,M-6, B-1, B-2 and B-3
                              Certificates is less than the Schedule I attached
                              hereto.

Trade Date:                   January 11, 2007

Effective Date:               January 24, 2007

Termination Date:             July 25, 2007, subject to adjustment in accordance
                              with the Business Day Convention

Fixed Amounts:

   Fixed Rate Payer:          Party B

   Fixed Amount:              Not applicable

Floating Amounts:

   Floating Rate Payer:       Party A

   Cap Rate:                  With respect to any Calculation Period, the amount
                              set forth for such period on Schedule I attached
                              hereto

   Floating Rate Payer        The 25th calendar day of each month during the
   Period End Dates:          Term of this Transaction, commencing February 25,
                              2007, and ending on the Termination Date subject
                              to adjustment in accordance with the Business Day
                              Convention.

   Floating Rate Payer        Early payment shall be applicable. The Floating
   Payment Dates:             Rate Payer Payment Date shall be two (2) Business
                              Days prior to each Period End Date, commencing on
                              February 22, 2007

   Floating Rate Option:      USD-LIBOR-BBA; provided, however, for any
                              Calculation Period, if the Floating Rate Option is
                              greater than 8.93%, then
</TABLE>

                                      O-2-2

<PAGE>

<TABLE>
<S>                           <C>
                              the Floating Rate Option for such Calculation
                              Period shall be deemed 8.93%.

   Designated Maturity:       One month

   Floating Rate Day          Actual/360
   Count Fraction:

   Reset Dates:               The first day of each Calculation Period.

   Compounding:               Inapplicable

   Business Days:             New York

   Business Day Convention:   Following

   Calculation Agent:         Party A
</TABLE>

3.   Provisions Deemed Incorporated in a Schedule to the ISDA Master Agreement:

PART 1. TERMINATION PROVISIONS.

For the purposes of this Agreement:-

(a)  "SPECIFIED ENTITY" will not apply to Party A or Party B for any purpose.

(b)  "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.

(c)  EVENTS OF DEFAULT.

     The statement below that an Event of Default will apply to a specific party
     means that upon the occurrence of such an Event of Default with respect to
     such party, the other party shall have the rights of a Non-defaulting Party
     under Section 6 of this Agreement; conversely, the statement below that
     such event will not apply to a specific party means that the other party
     shall not have such rights.

     (xvii) The "FAILURE TO PAY OR DELIVER" provisions of Section 5(a)(i) will
          apply to Party A and will apply to Party B; provided, however, that
          Section 5(a)(i) is hereby amended by replacing the word "third" with
          the word "first"; provided, further, that notwithstanding anything to
          the contrary in Section 5(a)(i), any failure by Party A to comply with
          or perform any obligation to be complied with or performed by Party A
          under the Credit Support Annex shall not constitute an Event of
          Default under Section 5(a)(i) unless (A) a Required Ratings Downgrade
          Event has occurred and been continuing for 30 or more Local Business
          Days and (B) such failure is not remedied on or before the third Local
          Business Day after notice of such failure is given to Party A.

     (xviii) The "BREACH OF AGREEMENT" provisions of Section 5(a)(ii) will apply
          to Party A and will not apply to Party B.

     (xix) The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will
          apply to Party A and will not apply to Party B except that Section
          5(a)(iii)(1) will apply to Party B solely in respect of Party B's
          obligations under Paragraph 3(b) of the Credit Support Annex;
          provided, however, that notwithstanding anything to the contrary in
          Section 5(a)(iii)(1), any failure by Party A to comply with or perform
          any obligation to be complied with or performed by Party A under the
          Credit Support Annex shall not constitute an Event of Default under
          Section 5(a)(iii) unless (A) a Required Ratings Downgrade Event has
          occurred and been continuing for 30 or more Local Business Days and
          (B) such failure is not remedied on or before the third Local Business
          Day after notice of such failure is given to Party A.

                                      O-2-3

<PAGE>

     (xx) The "MISREPRESENTATION" provisions of Section 5(a)(iv) will apply to
          Party A and will not apply to Party B.

     (xxi) The "DEFAULT UNDER SPECIFIED TRANSACTION" provisions of Section
          5(a)(v) will apply to Party A and will not apply to Party B.

     (xxii) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to
          Party A and will not apply to Party B. For purposes of Section
          5(a)(vi), solely with respect to Party A:

          "Specified Indebtedness" will have the meaning specified in Section
          14, except that such term shall not include insurance contracts
          entered into in the ordinary course of Party A's Credit Support
          Provider's insurance business.

          "Threshold Amount" means with respect to Party A an amount equal to
          three percent (3%) of the Shareholders' Equity of Party A or, if
          applicable, the Eligible Guarantor.

          "Shareholders' Equity" means with respect to an entity, at any time,
          the sum (as shown in the most recent annual audited financial
          statements of such entity) of (i) its capital stock (including
          preferred stock) outstanding, taken at par value, (ii) its capital
          surplus and (iii) its retained earnings, minus (iv) treasury stock,
          each to be determined in accordance with generally accepted accounting
          principles.

     (xxiii) The "BANKRUPTCY" provisions of Section 5(a)(vii) will apply to
          Party A and will apply to Party B except that the provisions of
          Section 5(a)(vii)(2), (6) (to the extent that such provisions refer to
          any appointment contemplated or effected by the Pooling and Servicing
          Agreement or any appointment to which Party B has not become subject),
          (7) and (9) will not apply to Party B; provided that, with respect to
          Party B only, Section 5(a)(vii)(4) is hereby amended by adding after
          the words "against it" the words "(excluding any proceeding or
          petition instituted or presented by Party A or its Affiliates)", and
          Section 5(a)(vii)(8) is hereby amended by deleting the words "to (7)
          inclusive" and inserting in lieu thereof ", (3), (4) as amended, (5),
          (6) as amended, or (7)".

     (xxiv) The "MERGER WITHOUT ASSUMPTION" provisions of Section 5(a)(viii)
          will apply to Party A and will apply to Party B.

(d)  TERMINATION EVENTS.

     The statement below that a Termination Event will apply to a specific party
     means that upon the occurrence of such a Termination Event, if such
     specific party is the Affected Party with respect to a Tax Event, the
     Burdened Party with respect to a Tax Event Upon Merger (except as noted
     below) or the non-Affected Party with respect to a Credit Event Upon
     Merger, as the case may be, such specific party shall have the right to
     designate an Early Termination Date in accordance with Section 6 of this
     Agreement; conversely, the statement below that such an event will not
     apply to a specific party means that such party shall not have such right;
     provided, however, with respect to "Illegality" the statement that such
     event will apply to a specific party means that upon the occurrence of such
     a Termination Event with respect to such party, either party shall have the
     right to designate an Early Termination Date in accordance with Section 6
     of this Agreement.

     (i)  The "ILLEGALITY" provisions of Section 5(b)(i) will apply to Party A
          and will apply to Party B.

     (ii) The "TAX EVENT" provisions of Section 5(b)(ii) will apply to Party A
          except that, for purposes of the application of Section 5(b)(ii) to
          Party A, Section 5(b)(ii) is hereby amended by deleting the words "(x)
          any action taken by a taxing authority, or brought in a court of
          competent jurisdiction, on or after the date on which a Transaction is
          entered into (regardless of whether such action is taken or brought
          with respect to a party to this Agreement) or (y)", and the "TAX
          EVENT" provisions of Section 5(b)(ii) will apply to Party B.

                                      O-2-4

<PAGE>

     (iii) The "TAX EVENT UPON MERGER" provisions of Section 5(b)(iii) will
          apply to Party A and will apply to Party B, provided that Party A
          shall not be entitled to designate an Early Termination Date by reason
          of a Tax Event upon Merger in respect of which it is the Affected
          Party.

     (iv) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will not
          apply to Party A and will not apply to Party B.

(e)  The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not apply
     to Party A and will not apply to Party B.

(f)  PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
     Agreement:

     (v)  Market Quotation will apply, provided, however, that, in the event of
          a Derivative Provider Trigger Event, the following provisions will
          apply:

          (A)  The definition of Market Quotation in Section 14 shall be deleted
               in its entirety and replaced with the following:

               "MARKET QUOTATION" means, with respect to one or more Terminated
               Transactions, a Firm Offer which is (1) made by a Reference
               Market-maker that is an Eligible Replacement, (2) for an amount
               that would be paid to Party B (expressed as a negative number) or
               by Party B (expressed as a positive number) in consideration of
               an agreement between Party B and such Reference Market-maker to
               enter into a Replacement Transaction, and (3) made on the basis
               that Unpaid Amounts in respect of the Terminated Transaction or
               group of Transactions are to be excluded but, without limitation,
               any payment or delivery that would, but for the relevant Early
               Termination Date, have been required (assuming satisfaction of
               each applicable condition precedent) after that Early Termination
               Date is to be included.

          (B)  The definition of Settlement Amount shall be deleted in its
               entirety and replaced with the following:

               "SETTLEMENT AMOUNT" means, with respect to any Early Termination
               Date, an amount (as determined by Party B at the written
               direction of the Depositor) equal to:

               (a)  If a Market Quotation for the relevant Terminated
                    Transaction or group of Terminated Transactions is accepted
                    by Party B at the written direction of the Depositor so as
                    to become legally binding on or before the day falling ten
                    Local Business Days after the day on which the Early
                    Termination Date is designated, or such later day as Party B
                    at the written direction of the Depositor may specify in
                    writing to Party A, but in either case no later than one
                    Local Business Day prior to the Early Termination Date (such
                    day, the "Latest Settlement Amount Determination Day"), the
                    Termination Currency Equivalent of the amount (whether
                    positive or negative) of such Market Quotation;

               (b)  If, on the Latest Settlement Amount Determination Day, no
                    Market Quotation for the relevant Terminated Transaction or
                    group of Terminated Transactions has been accepted by Party
                    B at the written direction of the Depositor so as to become
                    legally binding and one or more Market Quotations from
                    Approved Replacements have been made and remain capable of
                    becoming legally binding upon acceptance, the Settlement
                    Amount shall equal the Termination Currency Equivalent of
                    the amount (whether positive or negative) of the lowest of
                    such Market Quotations (for the avoidance of doubt, the
                    lowest of such Market Quotations shall be the lowest Market
                    Quotation of such Market Quotations expressed as a positive
                    number or, if any of such Market Quotations is expressed as
                    a negative number, the Market Quotation expressed as a
                    negative number with the largest absolute value); or

                                      O-2-5

<PAGE>

               (c)  If, on the Latest Settlement Amount Determination Day, no
                    Market Quotation for the relevant Terminated Transaction or
                    group of Terminated Transactions is accepted by Party B so
                    as to become legally binding and no Market Quotation from an
                    Approved Replacement remains capable of becoming legally
                    binding upon acceptance, the Settlement Amount shall equal
                    Party B's Loss (whether positive or negative and without
                    reference to any Unpaid Amounts) for the relevant Terminated
                    Transaction or group of Terminated Transactions.

          (C)  If Party B at the written direction of the Depositor requests
               Party A in writing to obtain Market Quotations, Party A shall use
               its reasonable efforts to do so before the Latest Settlement
               Amount Determination Day.

          (D)  If the Settlement Amount is a negative number, Section 6(e)(i)(3)
               shall be deleted in its entirety and replaced with the following:

               "(3) Second Method and Market Quotation. If the Second Method and
               Market Quotation apply, (I) Party B shall pay to Party A an
               amount equal to the absolute value of the Settlement Amount in
               respect of the Terminated Transactions, (II) Party B shall pay to
               Party A the Termination Currency Equivalent of the Unpaid Amounts
               owing to Party A and (III) Party A shall pay to Party B the
               Termination Currency Equivalent of the Unpaid Amounts owing to
               Party B; provided, however, that (x) the amounts payable under
               the immediately preceding clauses (II) and (III) shall be subject
               to netting in accordance with Section 2(c) of this Agreement and
               (y) notwithstanding any other provision of this Agreement, any
               amount payable by Party A under the immediately preceding clause
               (III) shall not be netted-off against any amount payable by Party
               B under the immediately preceding clause (I)."

          (E)  At any time on or before the Latest Settlement Amount
               Determination Day at which two or more Market Quotations from
               Approved Replacements remain capable of becoming legally binding
               upon acceptance, Party B shall be entitled to accept only the
               lowest of such Market Quotations (for the avoidance of doubt, the
               lowest of such Market Quotations shall be the lowest Market
               Quotation of such Market Quotations expressed as a positive
               number or, if any of such Market Quotations is expressed as a
               negative number, the Market Quotation expressed as a negative
               number with the largest absolute value).

     (vi) The Second Method will apply.

(g)  "TERMINATION CURRENCY" means USD.

(h)  ADDITIONAL TERMINATION EVENTS. Additional Termination Events will apply as
     provided in Part 5(c).

PART 2. TAX MATTERS.

(a)  TAX REPRESENTATIONS.

     (i)  PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this
          Agreement:

          (A)  Party A makes the following representation(s):

               It is not required by any applicable law, as modified by the
               practice of any relevant governmental revenue authority, of any
               Relevant Jurisdiction to make any deduction or withholding for or
               on account of any Tax from any payment (other than interest under
               Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by
               it to the other party under this Agreement. In making this
               representation, it may rely on: the accuracy of any
               representations made by the other party pursuant to Section 3(f)
               of this Agreement; (ii)

                                      O-2-6

<PAGE>

               the satisfaction of the agreement contained in Section 4(a)(i) or
               4(a)(iii) of this Agreement and the accuracy and effectiveness of
               any document provided by the other party pursuant to Section
               4(a)(i) or 4(a)(iii) of this Agreement; and (iii) the
               satisfaction of the agreement of the other party contained in
               Section 4(d) of this Agreement, provided that it shall not be a
               breach of this representation where reliance is placed on clause
               (ii) and the other party does not deliver a form or document
               under Section 4(a)(iii) by reason of material prejudice to its
               legal or commercial position.

          (B)  Party B makes the following representation(s):

               None.

     (ii) PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this
          Agreement:

          (C)  Party A makes the following representation(s):

               Party A represents that it is a corporation organized under the
               laws of the State of Delaware.

          (B)  Party B makes the following representation(s):

               None.

(b)  TAX PROVISIONS.

     (i)  GROSS UP. Section 2(d)(i)(4) shall not apply to Party B as X, and
          Section 2(d)(ii) shall not apply to Party B as Y, in each case such
          that Party B shall not be required to pay any additional amounts
          referred to therein.

     (ii) INDEMNIFIABLE TAX. The definition of "Indemnifiable Tax" in Section 14
          is deleted in its entirety and replaced with the following:

          "INDEMNIFIABLE TAX" means, in relation to payments by Party A, any Tax
          and, in relation to payments by Party B, no Tax.

PART 3. AGREEMENT TO DELIVER DOCUMENTS.

(a)  For the purpose of Section 4(a)(i), tax forms, documents, or certificates
     to be delivered are:

<TABLE>
<CAPTION>
PARTY REQUIRED TO
DELIVER DOCUMENT    FORM/DOCUMENT/CERTIFICATE                         DATE BY WHICH TO BE DELIVERED
-----------------   -----------------------------------------------   ---------------------------------------------
<S>                 <C>                                               <C>
Party A             An original properly completed and executed       (i) upon execution of this Agreement, (ii) on
                    United States Internal Revenue Service Form W-9   or before the first payment date under this
                    including applicable attachments (or any          Agreement, including any Credit Support
                    successor thereto) with respect to any payments   Document, (iii) promptly upon the reasonable
                    received or to be received by Party A that        demand by Party B, (iv) prior to the
                    eliminates U.S. federal withholding and backup    expiration or obsolescence of any previously
                    withholding Tax on payments to Party A under      delivered form, and (v) promptly upon the
                    this Agreement.                                   information on any such previously delivered
                                                                      form becoming inaccurate or incorrect.

Party B             (i) Upon execution of this Agreement, an          (i) upon execution of this Agreement, (ii) on
                    original properly completed and executed United   or before the first payment date under this
                    States Internal Revenue Service Form              Agreement, including any Credit Support
</TABLE>

                                      O-2-7

<PAGE>

<TABLE>
<S>                 <C>                                                <C>
                    W-9 including applicable attachments (or any       Document, (iii) promptly upon the reasonable
                    successor thereto) with respect to any payments    demand by Party A, (iv) prior to the
                    received or to be received by the initial          expiration or obsolescence of any previously
                    beneficial owner of payments to Party B under      delivered form, and (v) promptly upon the
                    this Agreement, and (ii) thereafter, the           information on any such previously delivered
                    appropriate tax certification form (i.e., IRS      form becoming inaccurate or incorrect.
                    Form W-9 or IRS Form W-8BEN, W-8IMY, W-8EXP or
                    W-8ECI, as applicable (or any successor form
                    thereto)) with respect to any payments received
                    or to be received by the beneficial owner of
                    payments to Party B under this Agreement from
                    time to time.

</TABLE>

                                      O-2-8

<PAGE>

(b)  For the purpose of Section 4(a)(ii), other documents to be delivered are:

<TABLE>
<CAPTION>
                                                                                                                      COVERED BY
PARTY REQUIRED TO                                                                                                     SECTION 3(D)
DELIVER DOCUMENT    FORM/DOCUMENT/CERTIFICATE                         DATE BY WHICH TO BE DELIVERED                   REPRESENTATION
-----------------   -----------------------------------------------   ---------------------------------------------   --------------
<S>                 <C>                                               <C>                                             <C>
Party A and         Any documents required by the receiving party     Upon the execution and delivery of this         Yes
Party B             to evidence the authority of the delivering       Agreement
                    party or its Credit Support Provider, if any,
                    for it to execute and deliver the Agreement,
                    this Confirmation, and any Credit Support
                    Documents to which it is a party, and to
                    evidence the authority of the delivering party
                    or its Credit Support Provider to perform its
                    obligations under the Agreement, this
                    Confirmation and any Credit Support Document,
                    as the case may be

Party A and         A certificate of an authorized officer of the     Upon the execution and delivery of this         Yes
Party B             party, as to the incumbency and authority of      Agreement
                    the respective officers of the party signing
                    the Agreement, this Confirmation, and any
                    relevant Credit Support Document, as the case
                    may be

Party A             Annual Report of Party A's Credit Support         Promptly upon becoming publicly available       Yes
                    Provider containing consolidated financial
                    statements certified by independent certified
                    public accountants and prepared in accordance
                    with generally accepted accounting principles
                    in the country in which Party A's Credit
                    Support Provider is organized

Party A             Semi Annual Financial Statements of Party A's     Promptly upon becoming publicly available       Yes
                    Credit Support Provider containing unaudited,
                    consolidated financial statements of Party A's
                    Credit Support Provider's Interim Report
                    prepared in accordance with generally accepted
                    accounting principles in the country in which
                    Party A's Credit Support Provider is organized

Party A             A guarantee of Swiss Re                           Upon the execution and delivery of this         No
                                                                      Agreement

Party A             An opinion of counsel to Party A's Guarantor      Upon the execution and delivery of this         No
                                                                      Agreement
</TABLE>

                                      O-2-9
<PAGE>

PART 4.  MISCELLANEOUS.

(a)  ADDRESS FOR NOTICES: For the purposes of Section 12(a) of this Agreement:

     Address for notices or communications to Party A:

     Address:        Swiss Re Financial Products Corporation
                     55 East 52nd Street
                     New York, New York 10055
                     Attention: Head of Operations
                     Facsimile No. (917) 322-7201

     (For all purposes)

     With a copy to: Swiss Re Financial Products Corporation
                     55 East 52nd Street
                     New York, New York 10055
                     Attention: Legal Department
                     Facsimile No.: (212) 317-5474

     Address for notices or communications to Party B:

                     U.S. Bank National Association
                     60 Livingston Avenue,
                     Mail Code EP-MN-WS3D
                     St. Paul, Minnesota 55107-2292
                     Attention: Structured Finance/SURF 2007-BC1

                     with a copy to:

                     Merrill Lynch Mortgage Lending, Inc.
                     650 Third Avenue South
                     Suite 1500
                     St. Paul, MN 55107
                     Attention: Trading Analytics -- SURF 2007-BC1
                     Telephone: 612-336-7300
                     Facsimile: 612-336-7415

                     (For all purposes)

(b)  PROCESS AGENT. For the purpose of Section 13(c):

     Party A appoints as its Process Agent: Not applicable.

     Party B appoints as its Process Agent: Not applicable.

(c)  OFFICES. The provisions of Section 10(a) will apply to this Agreement;
     neither Party A nor Party B has any Offices other than as set forth in the
     Notices Section.

(d)  MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:

     Party A is not a Multibranch Party.

     Party B is not a Multibranch Party.

                                     O-2-10

<PAGE>

(e)  CALCULATION AGENT. The Calculation Agent is Party A; provided, however,
     that if an Event of Default shall have occurred with respect to Party A,
     Party B shall have the right to appoint as Calculation Agent a third party,
     reasonably acceptable to Party A, the cost for which shall be borne by
     Party A.

(f)  CREDIT SUPPORT DOCUMENT.

     Party A: The Credit Support Annex, and any guarantee in support of Party
              A's obligations under this Agreement.

     Party B: The Credit Support Annex, solely in respect of Party B's
              obligations under Paragraph 3(b) of the Credit Support Annex.

(g)  CREDIT SUPPORT PROVIDER.

     Party A: The guarantor under any guarantee in support of Party A's
              obligations under this Agreement.

     Party B: None.

(h)  GOVERNING LAW. The parties to this Agreement hereby agree that the law of
     the State of New York shall govern their rights and duties in whole,
     without regard to the conflict of law provisions thereof other than New
     York General Obligations Law Sections 5-1401 and 5-1402.

(i)  NETTING OF PAYMENTS. The parties agree that subparagraph (ii) of Section
     2(c) will apply to each Transaction hereunder.

(j)  AFFILIATE. "Affiliate" shall have the meaning assigned thereto in Section
     14; provided, however, that Party B shall be deemed to have no Affiliates
     for purposes of this Agreement, including for purposes of Section 6(b)(ii).

PART 5. OTHERS PROVISIONS.

(a)  DEFINITIONS. Unless otherwise specified in a Confirmation, this Agreement
     and each Transaction under this Agreement are subject to the 2000 ISDA
     Definitions as published and copyrighted in 2000 by the International Swaps
     and Derivatives Association, Inc. (the "DEFINITIONS"), and will be governed
     in all relevant respects by the provisions set forth in the Definitions,
     without regard to any amendment to the Definitions subsequent to the date
     hereof. The provisions of the Definitions are hereby incorporated by
     reference in and shall be deemed a part of this Agreement, except that (i)
     references in the Definitions to a "Swap Transaction" shall be deemed
     references to a "Transaction" for purposes of this Agreement, and (ii)
     references to a "Transaction" in this Agreement shall be deemed references
     to a "Swap Transaction" for purposes of the Definitions. Each term
     capitalized but not defined in this Agreement shall have the meaning
     assigned thereto in the Pooling and Servicing Agreement.

(b)  AMENDMENTS TO ISDA MASTER AGREEMENT.

     (i)  SINGLE AGREEMENT. Section 1(c) is hereby amended by the adding the
          words "including, for the avoidance of doubt, the Credit Support
          Annex" after the words "Master Agreement".

     (ii) CONDITIONS PRECEDENT. Section 2(a)(iii) is hereby amended by adding
          the following at the end thereof:

          Notwithstanding anything to the contrary in Section 2(a)(iii)(1), if
          an Event of Default with respect to Party B or Potential Event of
          Default with respect to Party B has occurred and been continuing for
          more than 30 Local Business Days and no Early Termination Date in
          respect of the Affected Transactions has occurred or been effectively
          designated by Party A, the obligations of Party A

                                     O-2-11

<PAGE>

          under Section 2(a)(i) shall cease to be subject to the condition
          precedent set forth in Section 2(a)(iii)(1) with respect to such
          specific occurrence of such Event of Default or such Potential Event
          of Default (the "SPECIFIC EVENT"); provided, however, for the
          avoidance of doubt, the obligations of Party A under Section 2(a)(i)
          shall be subject to the condition precedent set forth in Section
          2(a)(iii)(1) (subject to the foregoing) with respect to any subsequent
          occurrence of the same Event of Default with respect to Party B or
          Potential Event of Default with respect to Party B after the Specific
          Event has ceased to be continuing and with respect to any occurrence
          of any other Event of Default with respect to Party B or Potential
          Event of Default with respect to Party B that occurs subsequent to the
          Specific Event.

     (iii) CHANGE OF ACCOUNT. Section 2(b) is hereby amended by the addition of
          the following after the word "delivery" in the first line thereof:

          "to another account in the same legal and tax jurisdiction as the
          original account".

     (iv) REPRESENTATIONS. Section 3 is hereby amended by adding at the end
          thereof the following subsection (g):

          "(g) Relationship Between Parties.

               (1)  Nonreliance. (i) It is not relying on any statement or
                    representation of the other party regarding the Transaction
                    (whether written or oral), other than the representations
                    expressly made in this Agreement or the Confirmation in
                    respect of that Transaction and (ii) it has consulted with
                    its own legal, regulatory, tax, business, investment,
                    financial and accounting advisors to the extent it has
                    deemed necessary, and it has made its own investment,
                    hedging and trading decisions based upon its own judgment
                    and upon any advice from such advisors as it has deemed
                    necessary and not upon any view expressed by the other
                    party.

               (2)  Evaluation and Understanding. (i) It has the capacity to
                    evaluate (internally or through independent professional
                    advice) the Transaction and has made its own decision to
                    enter into the Transaction and (ii) It understands the
                    terms, conditions and risks of the Transaction and is
                    willing and able to accept those terms and conditions and to
                    assume those risks, financially and otherwise.

               (3)  Purpose. It is entering into the Transaction for the
                    purposes of managing its borrowings or investments, hedging
                    its underlying assets or liabilities or in connection with a
                    line of business.

               (4)  Status of Parties. The other party is not acting as an
                    agent, fiduciary or advisor for it in respect of the
                    Transaction.

               (5)  Eligible Contract Participant. It is an "eligible swap
                    participant" as such term is defined in, Section 35.1(b)(2)
                    of the regulations (17 C.F.R. 35) promulgated under, and an
                    "eligible contract participant" as defined in Section
                    1(a)(12) of the Commodity Exchange Act, as amended."

     (v)  TRANSFER TO AVOID TERMINATION EVENT. Section 6(b)(ii) is hereby
          amended by (i) deleting the words "or if a Tax Event Upon Merger
          occurs and the Burdened Party is the Affected Party," and (ii) by
          deleting the words "to transfer" and inserting the words "to effect a
          Permitted Transfer" in lieu thereof.

     (vi) JURISDICTION. Section 13(b) is hereby amended by: (i) deleting in the
          second line of subparagraph (i) thereof the word "non-", (ii) deleting
          "; and" from the end of subparagraph 1 and inserting "." in lieu
          thereof, and (iii) deleting the final paragraph thereof.

                                     O-2-12

<PAGE>

     (vii) LOCAL BUSINESS DAY. The definition of Local Business Day in Section
          14 is hereby amended by the addition of the words "or any Credit
          Support Document" after "Section 2(a)(i)" and the addition of the
          words "or Credit Support Document" after "Confirmation".

(c)  ADDITIONAL TERMINATION EVENTS. The following Additional Termination Events
     will apply:

     (v)  FIRST RATING TRIGGER COLLATERAL. If (A) it is not the case that a
          Moody's Second Trigger Ratings Event has occurred and been continuing
          for 30 or more Local Business Days and (B) Party A has failed to
          comply with or perform any obligation to be complied with or performed
          by Party A in accordance with the Credit Support Annex, then an
          Additional Termination Event shall have occurred with respect to Party
          A and Party A shall be the sole Affected Party with respect to such
          Additional Termination Event.

     (vi) SECOND RATING TRIGGER REPLACEMENT. If (A) a Required Ratings Downgrade
          Event has occurred and been continuing for 30 or more Local Business
          Days and (B) (i) at least one Eligible Replacement has made a Firm
          Offer to be the transferee of all of Party A's rights and obligations
          under this Agreement (and such Firm Offer remains an offer that will
          become legally binding upon such Eligible Replacement upon acceptance
          by the offeree) and/or (ii) an Eligible Guarantor has made a Firm
          Offer to provide an Eligible Guarantee (and such Firm Offer remains an
          offer that will become legally binding upon such Eligible Guarantor
          immediately upon acceptance by the offeree), then an Additional
          Termination Event shall have occurred with respect to Party A and
          Party A shall be the sole Affected Party with respect to such
          Additional Termination Event.

     (iii) RESERVED.

     (iv) PROVISION OF INFORMATION REQUIRED BY REGULATION AB. Party A shall fail
          to comply with the provisions of Part 5(e) upon the occurrence of a
          Swap Disclosure Event. For all purposes of this Agreement, Party A
          shall be the sole Affected Party with respect to such Additional
          Termination Event.

     (v)  OPTIONAL TERMINATION OF THE SECURITIZATION. If, at any time, the
          Terminator purchases the Mortgage Loans pursuant to Section 9.01 of
          the Pooling and Servicing Agreement, then an Additional Termination
          Event shall have occurred and Party B shall be the sole Affected Party
          with respect thereto; provided, however, that notwithstanding Section
          6(b)(iv) of the Master Agreement, only Party B shall have the right to
          designate an Early Termination Date in respect of this Additional
          Termination Event; provided, further, that the Early Termination Date
          shall not be prior to the Optional Termination Date.

(d)  REQUIRED RATINGS DOWNGRADE EVENT. In the event that a "REQUIRED RATINGS
     DOWNGRADE EVENT" from any of the Swap Rating Agencies shall occur and be
     continuing, then Party A shall, as soon as reasonably practicable, at its
     own expense, using commercially reasonable efforts, procure either (A) a
     Permitted Transfer or (B) an Eligible Guarantee from an Eligible Guarantor.

(e)  COMPLIANCE WITH REGULATION AB. (i) For purposes of Item 1115 of Subpart
     229.1100 - Asset Backed Securities (Regulation AB) (17 C.F.R. ss.ss.
     229.1100 - 229.1123) ("Regulation AB") under the Securities Act of 1933, as
     amended, and the Securities Exchange Act of 1934, as amended (the "Exchange
     Act"), as amended and interpreted by the Securities and Exchange Commission
     and its staff, if the Depositor or Party B makes a determination, acting
     reasonably and in good faith, that (x) the applicable "significance
     percentage" with respect to this Agreement has been reached, and (y) it has
     a reporting obligation under the Exchange Act (a "Swap Disclosure Event"),
     then Party A shall (or shall cause its Credit Support Provider to), within
     ten (10) calendar days after notice to that effect, at its sole expense,
     take one of the following actions (each subject to satisfaction of the
     Rating Agency Condition): (1) provide (including, if permitted by
     Regulation AB, provision by reference to reports filed pursuant to the
     Exchange Act or otherwise publicly available information): (A) the
     financial data required by Item 301 of Regulation S-K (17 C.F.R. Section
     229.301), pursuant to Item 1115(b)(1); (B) financial statements meeting the
     requirements of Regulation S-X (17 C.F.R. Sections 210.1-01 through
     210.12-29, but excluding 17 C.F.R. ss. 210.3-05 and Article 11 of

                                     O-2-13

<PAGE>

     Regulation S-X (17 C.F.R. ss.ss. 210.11-01 through 210.11-03)), pursuant
     to Item 1115(b)(2); or (C) such other financial information as may at the
     time be required or permitted to be provided in satisfaction of the
     requirements of Item 1115(b), together with accountants consents and/or a
     procedure letter relating thereto; or (2) secure an Approved Replacement
     that is able to comply with the requirements of Item 1115(b) of Regulation
     AB to replace Party A as party to this Agreement, on substantially similar
     terms, the debt rating of which entity (or credit support provider
     therefor) meets or exceeds the applicable requirements of the applicable
     Rating Agencies.

     (ii) For so long as the aggregate significance percentage is 10% or more,
     Party A shall (or shall cause its Credit Support Provider to) provide any
     updates to the information provided pursuant to clause (i)(1) above to the
     Depositor within five (5) Business Days following availability thereof (but
     in no event more than 45 days after the end of each of Party A's Credit
     Support Provider's fiscal half for any half-year update, and in no event
     more than 90 days after the end of each of Party A's Credit Support
     Provider's fiscal year for any annual update).

     (iii) All information provided pursuant to clauses (i)(1) and (ii) above
     (all such information, "Swap Financial Disclosure") shall be in a form
     suitable for conversion to the format required for filing by the Depositor
     with the Commission via the Electronic Data Gathering and Retrieval System
     (EDGAR). In addition, any such information, if audited, shall be
     accompanied by any necessary auditor's consents or, if such information is
     unaudited, shall be accompanied by an appropriate agreed-upon procedures
     letter from Party A's accountants. If permitted by Regulation AB, any such
     information may be provided by reference to or incorporation by reference
     from reports filed pursuant to the Exchange Act.

     (iv) Third Party Beneficiary. The Depositor shall be an express third party
     beneficiary of this Agreement as if a party hereto to the extent of the
     Depositor's rights explicitly specified in this Part 5(e).

(f)  TRANSFERS.

     (i)  Section 7 is hereby amended to read in its entirety as follows:

          "Except with respect to any Permitted Transfer pursuant to Section
          6(b)(ii), Part 5(d), Part 5(e), or the succeeding sentence, neither
          Party A nor Party B is permitted to assign, novate or transfer
          (whether by way of security or otherwise) as a whole or in part any of
          its rights, obligations or interests under the Agreement or any
          Transaction unless (a) the prior written consent of the other party is
          obtained, and (b) the Rating Agency Condition has been satisfied with
          respect to S&P and DBRS. At any time at which no Relevant Entity has
          credit ratings at least equal to the Approved Ratings Threshold, Party
          A may make a Permitted Transfer."

     (ii) If an Eligible Replacement has made a Firm Offer (which remains an
          offer that will become legally binding upon acceptance by Party B) to
          be the transferee pursuant to a Permitted Transfer, Party B shall, at
          Party A's written request and at Party A's expense, take any
          reasonable steps required to be taken by Party B to effect such
          transfer.

(g)  NON-RECOURSE. Party A acknowledges and agrees that, notwithstanding any
     provision in this Agreement to the contrary, the obligations of Party B
     hereunder are limited recourse obligations of Party B, payable solely from
     the Issuing Entity, in accordance with the priority of payments and other
     terms of the Pooling and Servicing Agreement and that Party A will not have
     any recourse to any of the directors, officers, employees, shareholders or
     affiliates of the Party B with respect to any claims, losses, damages,
     liabilities, indemnities or other obligations in connection with any
     transactions contemplated hereby. In the event that the funds on deposit
     with the Issuing Entity should be insufficient to satisfy all claims
     outstanding and following the realization all funds on deposit with the
     Issuing Entity, any claims against or obligations of Party B under the ISDA
     Master Agreement or any other confirmation thereunder still outstanding
     shall be extinguished and thereafter not revive. Party B shall not have
     liability for any failure or delay in making a payment hereunder to Party A
     due to any failure or delay in receiving amounts held by Trustee. This
     provision will survive the termination of this Agreement.

                                     O-2-14

<PAGE>

(h)  TIMING OF PAYMENTS BY PARTY B UPON EARLY TERMINATION. Notwithstanding
     anything to the contrary in Section 6(d)(ii), to the extent that all or a
     portion (in either case, the "Unfunded Amount") of any amount that is
     calculated as being due in respect of any Early Termination Date under
     Section 6(e) from Party B to Party A will be paid by Party B from amounts
     other than any upfront payment paid to Party B by an Eligible Replacement
     that has entered a Replacement Transaction with Party B, then such Unfunded
     Amount shall be due on the next subsequent Distribution Date following the
     date on which the payment would have been payable as determined in
     accordance with Section 6(d)(ii), and on any subsequent Distribution Dates
     until paid in full (or if such Early Termination Date is the final
     Distribution Date, on such final Distribution Date); provided, however,
     that if the date on which the payment would have been payable as determined
     in accordance with Section 6(d)(ii) is a Distribution Date, such payment
     will be payable on such Distribution Date.

(i)  RATING AGENCY NOTIFICATIONS. Notwithstanding any other provision of this
     Agreement, no Early Termination Date shall be effectively designated
     hereunder by Party B and no transfer of any rights or obligations under
     this Agreement shall be made by either party unless each Swap Rating Agency
     has been given prior written notice of such designation or transfer.

(j)  NO SET-OFF. Except as expressly provided for in Section 2(c), Section 6 or
     Part 1(f)(i)(D) hereof, and notwithstanding any other provision of this
     Agreement or any other existing or future agreement, each party irrevocably
     waives any and all rights it may have to set off, net, recoup or otherwise
     withhold or suspend or condition payment or performance of any obligation
     between it and the other party hereunder against any obligation between it
     and the other party under any other agreements. Section 6(e) shall be
     amended by deleting the following sentence: "The amount, if any, payable in
     respect of an Early Termination Date and determined pursuant to this
     Section will be subject to any Set-off."

(k)  AMENDMENT. Notwithstanding any provision to the contrary in this Agreement,
     no amendment of either this Agreement or any Transaction under this
     Agreement shall be permitted by either party unless each of the Swap Rating
     Agencies has been provided prior written notice of the same and such
     amendment satisfies the Rating Agency Condition with respect to S&P and
     DBRS.

(l)  NOTICE OF CERTAIN EVENTS OR CIRCUMSTANCES. Each Party agrees, upon learning
     of the occurrence or existence of any event or condition that constitutes
     (or that with the giving of notice or passage of time or both would
     constitute) an Event of Default or Termination Event with respect to such
     party, promptly to give the other Party and to each Swap Rating Agency
     notice of such event or condition; provided that failure to provide notice
     of such event or condition pursuant to this Part 5(l) shall not constitute
     an Event of Default or a Termination Event.

(m)  PROCEEDINGS. No Relevant Entity shall institute against, or cause any other
     person to institute against, or join any other person in instituting
     against Party B in any bankruptcy, reorganization, arrangement, insolvency
     or liquidation proceedings or other proceedings under any federal or state
     bankruptcy or similar law for a period of one year (or, if longer, the
     applicable preference period) and one day following payment in full of the
     Certificates and any Notes. This provision will survive the termination of
     this Agreement.

(n)  TRUSTEE LIABILITY LIMITATIONS. It is expressly understood and agreed by the
     parties hereto that (a) this Agreement is executed by U.S. Bank National
     Association not in its individual capacity, but solely as Trustee in the
     exercise of the powers and authority conferred and invested in it
     thereunder; (b) each of the representations, undertakings and agreements
     herein made on behalf of the Issuing Entity is made and intended not as
     personal representations of the Trustee but is made and intended for the
     purpose of binding only the Issuing Entity; and (c) under no circumstances
     shall U.S. Bank National Association in its individual capacity be
     personally liable for any payments hereunder or for the breach or failure
     of any obligation, representation, warranty or covenant made or undertaken
     under this Agreement. Nothing herein contained shall be construed as
     creating any liability on U.S. Bank National Association, individually or
     personally, to perform any covenant either expressed or implied contained
     herein, all such liability, if any, being expressly waived by the parties
     who are signatories to this Agreement and by any person claiming by,
     through or under such parties.

                                     O-2-15

<PAGE>

(o)  SEVERABILITY. If any term, provision, covenant, or condition of this
     Agreement, or the application thereof to any party or circumstance, shall
     be held to be invalid or unenforceable (in whole or in part) in any
     respect, the remaining terms, provisions, covenants, and conditions hereof
     shall continue in full force and effect as if this Agreement had been
     executed with the invalid or unenforceable portion eliminated, so long as
     this Agreement as so modified continues to express, without material
     change, the original intentions of the parties as to the subject matter of
     this Agreement and the deletion of such portion of this Agreement will not
     substantially impair the respective benefits or expectations of the
     parties; provided, however, that this severability provision shall not be
     applicable if any provision of Section 2, 5, 6, or 13 (or any definition or
     provision in Section 14 to the extent it relates to, or is used in or in
     connection with any such Section) shall be so held to be invalid or
     unenforceable.

     The parties shall endeavor to engage in good faith negotiations to replace
     any invalid or unenforceable term, provision, covenant or condition with a
     valid or enforceable term, provision, covenant or condition, the economic
     effect of which comes as close as possible to that of the invalid or
     unenforceable term, provision, covenant or condition.

(p)  AGENT FOR PARTY B. Party A acknowledges that U.S. Bank National
     Association, may act as Party B's agent to carry out certain functions on
     behalf of Party B in respect of this Confirmation, and that U.S. Bank
     National Association shall be entitled to give notices and to perform and
     satisfy the obligations of Party B hereunder on behalf of Party B.

(q)  ESCROW PAYMENTS. If (whether by reason of the time difference between the
     cities in which payments are to be made or otherwise) it is not possible
     for simultaneous payments to be made on any date on which both parties are
     required to make payments hereunder, either Party may at its option and in
     its sole discretion notify the other Party that payments on that date are
     to be made in escrow. In this case deposit of the payment due earlier on
     that date shall be made by 2:00 pm (local time at the place for the earlier
     payment) on that date with an escrow agent selected by the notifying party,
     accompanied by irrevocable payment instructions (i) to release the
     deposited payment to the intended recipient upon receipt by the escrow
     agent of the required deposit of any corresponding payment payable by the
     other party on the same date accompanied by irrevocable payment
     instructions to the same effect or (ii) if the required deposit of the
     corresponding payment is not made on that same date, to return the payment
     deposited to the party that paid it into escrow. The party that elects to
     have payments made in escrow shall pay all costs of the escrow
     arrangements.

(r)  CONSENT TO RECORDING. Each party hereto consents to the monitoring or
     recording, at any time and from time to time, by the other party of any and
     all communications between trading, marketing, and operations personnel of
     the parties and their Affiliates, waives any further notice of such
     monitoring or recording, and agrees to notify such personnel of such
     monitoring or recording.

(s)  WAIVER OF JURY TRIAL. Each party waives any right it may have to a trial by
     jury in respect of any in respect of any suit, action or proceeding
     relating to this Agreement or any Credit Support Document.

(t)  FORM OF ISDA MASTER AGREEMENT. Party A and Party B hereby agree that the
     text of the body of the ISDA Master Agreement is intended to be the printed
     form of the ISDA Master Agreement (Multicurrency - Crossborder) as
     published and copyrighted in 1992 by the International Swaps and
     Derivatives Association, Inc.

(u)  PAYMENT INSTRUCTIONS. Party A hereby agrees that, unless notified in
     writing by Party B of other payment instructions, any and all amounts
     payable by Party A to Party B under this Agreement shall be paid to the
     account specified in Item 4 of this Confirmation, below.

(v)  ADDITIONAL REPRESENTATIONS.

     (i)  REPRESENTATIONS OF PARTY A. Party A represents to Party B on the date
          on which Party A enters into each Transaction that:--

                                     O-2-16

<PAGE>

          (1)  Party A's obligations under this Agreement rank pari passu with
               all of Party A's other unsecured, unsubordinated obligations
               except those obligations preferred by operation of law.

     (ii) CAPACITY. Party A represents to Party B on the date on which Party A
          enters into this Agreement that it is entering into the Agreement and
          the Transaction as principal and not as agent of any person. Party B
          represents to Party A on the date on which Party B enters into this
          Agreement that it is entering into the Agreement and the Transaction
          in its capacity as Cap Trustee.

(w)  ACKNOWLEDGEMENTS.

     (i)  SUBSTANTIAL FINANCIAL TRANSACTIONS. Each party hereto is hereby
          advised and acknowledges as of the date hereof that the other party
          has engaged in (or refrained from engaging in) substantial financial
          transactions and has taken (or refrained from taking) other material
          actions in reliance upon the entry by the parties into the Transaction
          being entered into on the terms and conditions set forth herein and in
          the Pooling and Servicing Agreement relating to such Transaction, as
          applicable. This paragraph shall be deemed repeated on the trade date
          of each Transaction.

     (ii) BANKRUPTCY CODE. Subject to Part 5(m), without limiting the
          applicability if any, of any other provision of the U.S. Bankruptcy
          Code as amended (the "Bankruptcy Code") (including without limitation
          Sections 362, 546, 556, and 560 thereof and the applicable definitions
          in Section 101 thereof), the parties acknowledge and agree that all
          Transactions entered into hereunder will constitute "forward
          contracts" or "swap agreements" as defined in Section 101 of the
          Bankruptcy Code or "commodity contracts" as defined in Section 761 of
          the Bankruptcy Code, that the rights of the parties under Section 6 of
          this Agreement will constitute contractual rights to liquidate
          Transactions, that any margin or collateral provided under any margin,
          collateral, security, pledge, or similar agreement related hereto will
          constitute a "margin payment" as defined in Section 101 of the
          Bankruptcy Code, and that the parties are entities entitled to the
          rights under, and protections afforded by, Sections 362, 546, 556, and
          560 of the Bankruptcy Code.

(x)  RESERVED.

(y)  RESERVED.

(z)  ADDITIONAL DEFINITIONS.

               As used in this Agreement, the following terms shall have the
     meanings set forth below, unless the context clearly requires otherwise:

          "APPROVED RATINGS THRESHOLD" means each of the S&P Approved Ratings
          Threshold, the Moody's First Trigger Ratings Threshold, and the DBRS
          Approved Ratings Threshold.

          "APPROVED REPLACEMENT" means, with respect to a Market Quotation, an
          entity making such Market Quotation, which entity would satisfy
          conditions (a), (b), and (c) of the definition of Permitted Transfer
          (as determined by Party B in its sole discretion, acting in a
          commercially reasonable manner) if such entity were a Transferee, as
          defined in the definition of Permitted Transfer.

          "DBRS" means Dominion Bond Rating Service, or any successor thereto.

          "DBRS APPROVED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee, or an Eligible Replacement, a
          long-term unsecured and unsubordinated debt rating from DBRS of
          "AA(low)" and a short-term unsecured and unsubordinated debt rating
          from DBRS of "[R-1(middle)".

                                     O-2-17

<PAGE>

          "DBRS REQUIRED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee or an Eligible Replacement, a
          long-term unsecured and unsubordinated debt rating from DBRS of "BBB".

          "DERIVATIVE PROVIDER TRIGGER EVENT" means (i) an Event of Default with
          respect to which Party A is a Defaulting Party, (ii) a Termination
          Event with respect to which Party A is the sole Affected Party or
          (iii) an Additional Termination Event with respect to which Party A is
          the sole Affected Party.

          "ELIGIBLE GUARANTEE" means an unconditional and irrevocable guarantee
          of all present and future obligations (for the avoidance of doubt, not
          limited to payment obligations) of Party A or an Eligible Replacement
          to Party B under this Agreement that is provided by an Eligible
          Guarantor as principal debtor rather than surety and that is directly
          enforceable by Party B, the form and substance of which guarantee are
          subject to the Rating Agency Condition with respect to S&P and DBRS],
          and either (A) a law firm has given a legal opinion confirming that
          none of the guarantor's payments to Party B under such guarantee will
          be subject to Tax collected by withholding or (B) such guarantee
          provides that, in the event that any of such guarantor's payments to
          Party B are subject to Tax collected by withholding, such guarantor is
          required to pay such additional amount as is necessary to ensure that
          the net amount actually received by Party B (free and clear of any Tax
          collected by withholding) will equal the full amount Party B would
          have received had no such withholding been required.

          "ELIGIBLE GUARANTOR" means an entity that (A) has credit ratings from
          S&P at least equal to the S&P Approved Ratings Threshold and from DBRS
          at least equal to the DBRS Approved Ratings Threshold and (B) has
          credit ratings from Moody's at least equal to the Moody's Second
          Trigger Ratings Threshold, provided, for the avoidance of doubt, that
          an Eligible Guarantee of an Eligible Guarantor with credit ratings
          below the Approved Ratings Threshold will not cause a Collateral Event
          (as defined in the Credit Support Annex) not to occur or continue.

          "ELIGIBLE REPLACEMENT" means an entity (i) that (a) has credit ratings
          from S&P at least equal to the S&P Approved Ratings Threshold and from
          DBRS at least equal to the DBRS Approved Ratings Threshold and (b) has
          credit ratings from Moody's at least equal to the Moody's Second
          Trigger Ratings Threshold, provided, for the avoidance of doubt, that
          an Eligible Guarantee of an Eligible Guarantor with credit ratings
          below either the S&P Approved Ratings Threshold or the DBRS Approved
          Ratings Threshold will not cause a Collateral Event (as defined in the
          Credit Support Annex) not to occur or continue, or (ii) the present
          and future obligations (for the avoidance of doubt, not limited to
          payment obligations) of which entity to Party B under this Agreement
          are guaranteed pursuant to an Eligible Guarantee.

          "ESTIMATED SWAP TERMINATION PAYMENT" means, with respect to an Early
          Termination Date, an amount determined by Party A in good faith and in
          a commercially reasonable manner as the maximum payment that could be
          owed by Party B to Party A in respect of such Early Termination Date
          pursuant to Section 6(e) of the ISDA Master Agreement, taking into
          account then current market conditions.

          "FIRM OFFER" means (A) with respect to an Eligible Replacement, a
          quotation from such Eligible Replacement (i) in an amount equal to the
          actual amount payable by or to Party B in consideration of an
          agreement between Party B and such Eligible Replacement to replace
          Party A as the counterparty to this Agreement by way of novation or,
          if such novation is not possible, an agreement between Party B and
          such Eligible Replacement to enter into a Replacement Transaction
          (assuming that all Transactions hereunder become Terminated
          Transactions), and (ii) that constitutes an offer by such Eligible
          Replacement to replace Party A as the counterparty to this Agreement
          or enter a Replacement Transaction that will become legally binding
          upon such Eligible Replacement upon acceptance by Party B, and (B)
          with respect to an Eligible Guarantor, an offer by such Eligible
          Guarantor to provide an Eligible Guarantee that will become legally
          binding upon such Eligible Guarantor upon acceptance by the offeree.

          "MOODY'S" means Moody's Investors Service, Inc., or any successor
          thereto.

                                     O-2-18
<PAGE>

          "MOODY'S FIRST TRIGGER RATINGS EVENT" means that no Relevant Entity
          has credit ratings from Moody's at least equal to the Moody's First
          Trigger Ratings Threshold.

          "MOODY'S FIRST TRIGGER RATINGS THRESHOLD" means, with respect to Party
          A, the guarantor under an Eligible Guarantee or an Eligible
          Replacement, (i) if such entity has a short-term unsecured and
          unsubordinated debt rating from Moody's, a long-term unsecured and
          unsubordinated debt rating or counterparty rating from Moody's of "A2"
          and a short-term unsecured and unsubordinated debt rating from Moody's
          of "Prime-1", or (ii) if such entity does not have a short-term
          unsecured and unsubordinated debt rating or counterparty rating from
          Moody's, a long-term unsecured and unsubordinated debt rating or
          counterparty rating from Moody's of "A1".

          "MOODY'S SECOND TRIGGER RATINGS EVENT" means that no Relevant Entity
          has credit ratings from Moody's at least equal to the Moody's Second
          Trigger Rating Threshold.

          "MOODY'S SECOND TRIGGER RATINGS THRESHOLD" means, with respect to
          Party A, the guarantor under an Eligible Guarantee or an Eligible
          Replacement, (i) if such entity has a short-term unsecured and
          unsubordinated debt rating from Moody's, a long-term unsecured and
          unsubordinated debt rating or counterparty rating from Moody's of "A3"
          and a short-term unsecured and unsubordinated debt rating from Moody's
          of "Prime-2", or (ii) if such entity does not have a short-term
          unsecured and unsubordinated debt rating from Moody's, a long-term
          unsecured and unsubordinated debt rating or counterparty rating from
          Moody's of "A3".]

          "PERMITTED TRANSFER" means a transfer by novation by Party A pursuant
          to Section 6(b)(ii), Part 5(d), Part 5(e), or the second sentence of
          Section 7 (as amended herein) to a transferee (the "TRANSFEREE") of
          all, but not less than all, of Party A's rights, liabilities, duties
          and obligations under this Agreement, with respect to which transfer
          each of the following conditions is satisfied: (a) the Transferee is
          an Eligible Replacement; (b) Party A and the Transferee are both
          "dealers in notional principal contracts" within the meaning of
          Treasury regulations section 1.1001-4; (c) as of the date of such
          transfer the Transferee would not be required to withhold or deduct on
          account of Tax from any payments under this Agreement or would be
          required to gross up for such Tax under Section 2(d)(i)(4); (d) an
          Event of Default or Termination Event would not occur as a result of
          such transfer; (e) pursuant to a written instrument (the "TRANSFER
          AGREEMENT"), the Transferee acquires and assumes all rights and
          obligations of Party A under the Agreement and the relevant
          Transaction; (f) Party B shall have determined, in its sole
          discretion, acting in a commercially reasonable manner, that such
          Transfer Agreement is effective to transfer to the Transferee all, but
          not less than all, of Party A's rights and obligations under the
          Agreement and all relevant Transactions; (g) Party A will be
          responsible for any costs or expenses incurred in connection with such
          transfer (including any replacement cost of entering into a
          replacement transaction); (h) either (A) Moody's has been given prior
          written notice of such transfer and the Rating Agency Condition is
          satisfied with respect to S&P and DBRS or (B) each Swap Rating Agency
          has been given prior written notice of such transfer and such transfer
          is in connection with the assignment and assumption of this Agreement
          without modification of its terms, other than party names, dates
          relevant to the effective date of such transfer, tax representations
          (provided that the representations in Part 2(a)(i) are not modified)
          and any other representations regarding the status of the substitute
          counterparty of the type included in Part 5(b)(iv), Part 5(v)(i)(2) or
          Part 5(v)(ii), notice information and account details; and (i) such
          transfer otherwise complies with the terms of the Pooling and
          Servicing Agreement.

          "RATING AGENCY CONDITION" means, with respect to any particular
          proposed act or omission to act hereunder and each Swap Rating Agency
          specified in connection with such proposed act or omission, that the
          party acting or failing to act must consult with each of the specified
          Swap Rating Agencies and receive from each such Swap Rating Agency a
          prior written confirmation that the proposed action or inaction would
          not cause a downgrade or withdrawal of the then-current rating of any
          Certificates or Notes.

          "RELEVANT ENTITY" means Party A and, to the extent applicable, a
          guarantor under an Eligible Guarantee.

                                     O-2-19

<PAGE>

          "REPLACEMENT TRANSACTION" means, with respect to any Terminated
          Transaction or group of Terminated Transactions, a transaction or
          group of transactions that (i) would have the effect of preserving for
          Party B the economic equivalent of any payment or delivery (whether
          the underlying obligation was absolute or contingent and assuming the
          satisfaction of each applicable condition precedent) by the parties
          under Section 2(a)(i) in respect of such Terminated Transaction or
          group of Terminated Transactions that would, but for the occurrence of
          the relevant Early Termination Date, have been required after that
          Date, and (ii) has terms which are substantially the same as this
          Agreement, including, without limitation, rating triggers, Regulation
          AB compliance, and credit support documentation, save for the
          exclusion of provisions relating to Transactions that are not
          Terminated Transaction, as determined by Party B in its sole
          discretion, acting in a commercially reasonable manner.

          "REQUIRED RATINGS DOWNGRADE EVENT" means that no Relevant Entity has
          credit ratings from a Swap Rating Agency at least equal to the
          Required Ratings Threshold for that Swap Rating Agency.

          "REQUIRED RATINGS THRESHOLD" means each of the S&P Required Ratings
          Threshold, the Moody's Second Trigger Ratings Threshold, and the DBRS
          Required Ratings Threshold.

          "S&P" means Standard & Poor's Rating Services, a division of The
          McGraw-Hill Companies, Inc., or any successor thereto.

          "S&P APPROVED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee or an Eligible Replacement, a
          short-term unsecured and unsubordinated debt rating from S&P of "A-1",
          or, if such entity does not have a short-term unsecured and
          unsubordinated debt rating from S&P, a long-term unsecured and
          unsubordinated debt rating or counterparty rating from S&P of "A+".

          "S&P REQUIRED RATINGS THRESHOLD" means, with respect to Party A, the
          guarantor under an Eligible Guarantee or an Eligible Replacement, a
          long-term unsecured and unsubordinated debt rating or counterparty
          rating from S&P of "BBB+".

          "SWAP RATING AGENCIES" means, with respect to any date of
          determination, each of S&P, Moody's, and DBRS, to the extent that each
          such rating agency is then providing a rating for any of the Specialty
          Underwriting and Residential Finance, Series 2007-BC1 (the
          "Certificates") or any notes backed by the Certificates (the "Notes").

(aa) RETURN OF AMOUNTS RECEIVED BY MLML OR ITS AFFILIATES. Merrill Lynch
     Mortgage Lending, Inc. ("MLML") agrees and acknowledges that amounts paid
     hereunder are not intended to benefit the holder of any class of
     Certificates rated by any Swap Rating Agency if such holder is MLML or any
     of its affiliates. If MLML or any of its affiliates receives any such
     amounts, it will promptly remit (or, if such amounts are received by an
     affiliate of MLML, MLML hereby agrees that it will cause such affiliate to
     promptly remit) such amounts to the Trustee, whereupon such Trustee will
     promptly remit such amounts to Party A. MLML further agrees to provide
     notice to Party A upon any remittance to the Trustee.

               [Remainder of this page intentionally left blank.]

                                     O-2-20

<PAGE>

4.   Account Details and Settlement Information:

Payments to Party A:   JPMorgan Chase Bank
                       SWIFT: CHASUS33
                       Account of: Swiss Re Financial Products
                       Account No.: 066-911184
                       ABA# 021000021

Payments to Party B:   U.S Bank National Association
                       ABA#: 091000022
                       DDA#: 1731 0332 2058
                       DDA Name: Structured Finance Wire Clearing
                       FFC: 108693001/SURF07-BC1 Cap Contract Account

This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

                                     O-2-21

<PAGE>

We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.

Very truly yours,

SWISS RE FINANCIAL PRODUCTS
CORPORATION

E.By:
      -------------------------------
Name:
      -------------------------------
Title:
       ------------------------------

Party B, acting through its duly authorized signatory, hereby agrees to, accepts
and confirms the terms of the foregoing as of the date hereof.

U.S. Bank National Association, in its capacity as cap trustee for the trust
created pursuant to the Cap Administration Agreement (the "Cap Trust") with
respect to Specialty Underwriting and Residential Finance, Series 2007-BC1 (the
"Trustee")

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

Agreed and acknowledged by:

MERRILL LYNCH MORTGAGE LENDING, INC.

F.By:
      -------------------------------
Name:
      -------------------------------
Title:
       ------------------------------

                                     O-2-22

<PAGE>

                                   SCHEDULE I

AMORTIZATION SCHEDULE, subject to adjustment in accordance with the Following
Business Day Convention

<TABLE>
<CAPTION>
From and including    To but excluding   Notional Amount (USD)   Cap Rate (%)
------------------   -----------------   ---------------------   ------------
<S>                  <C>                 <C>                     <C>
January 24, 2007     February 25, 2007        164,585,000            6.866
February 25, 2007      March 25, 2007         164,585,000            7.929
 March 25, 2007        April 25, 2007         164,585,000            7.106
 April 25, 2007         May 25, 2007          164,585,000            7.363
  May 25, 2007         June 25, 2007          164,585,000            7.108
  June 25, 2007        July 25, 2007          164,585,000            7.364
</TABLE>

                                     O-2-23

<PAGE>

                                     ANNEX A

                    PARAGRAPH 13 OF THE CREDIT SUPPORT ANNEX

                                 SEE EXHIBIT O-4

                                     O-2-24

<PAGE>

                                   EXHIBIT O-4

                 FORM OF CREDIT SUPPORT ANNEX FOR CAP CONTRACTS

                                    ISDA(R)
                              CREDIT SUPPORT ANNEX
                             to the Schedule to the
                              ISDA Master Agreement
                      dated as of January 24, 2007 between

Swiss Re Financial Products Corporation (hereinafter referred to as "PARTY A" or
                                   "PLEDGOR")
                                       and
   U.S. Bank National Association, in its capacity as Trustee with respect to
Specialty Underwriting and Residential Finance, Series 2007-BC1 (the "Trustee"),
      ("PARTY B") (the "Trustee") (hereinafter referred to as "PARTY B" or
                                "SECURED PARTY").

For the avoidance of doubt, and notwithstanding anything to the contrary that
may be contained in the Agreement, this Credit Support Annex shall relate solely
to the Transaction documented in the Confirmation dated January 24, 2007,
between Party A and Party B, Reference Numbers 1234429, 1234430, 1234431.

II. Paragraph 13. Elections and Variables.

A.   SECURITY INTEREST FOR "OBLIGATIONS". The term "OBLIGATIONS" as used in this
     Annex includes the following additional obligations:

     With respect to Party A: not applicable.

     With respect to Party B: not applicable.

B.   CREDIT SUPPORT OBLIGATIONS.

     1.   DELIVERY AMOUNT, RETURN AMOUNT AND CREDIT SUPPORT AMOUNT.

          a.   "DELIVERY AMOUNT" has the meaning specified in Paragraph 3(a) as
               amended (I) by deleting the words "upon a demand made by the
               Secured Party on or promptly following a Valuation Date" and
               inserting in lieu thereof the words "not later than the close of
               business on each Valuation Date" and (II) by deleting in its
               entirety the sentence beginning "Unless otherwise specified in
               Paragraph 13" and ending "(ii) the Value as of that Valuation
               Date of all Posted Credit Support held by the Secured Party." and
               inserting in lieu thereof the following:

               The "DELIVERY AMOUNT" applicable to the Pledgor for any Valuation
               Date will equal the greatest of

               (1)  the amount by which (a) the S&P Credit Support Amount for
                    such Valuation Date exceeds (b) the S&P Value as of such
                    Valuation Date of all Posted Credit Support held by the
                    Secured Party,

               (2)  the amount by which (a) the DBRS Credit Support Amount for
                    such Valuation Date exceeds (b) the DBRS Value as of such
                    Valuation Date of all Posted Credit Support held by the
                    Secured Party,

                                      O-4-1

<PAGE>

               (3)  the amount by which (a) the Moody's First Trigger Credit
                    Support Amount for such Valuation Date exceeds (b) the
                    Moody's First Trigger Value as of such Valuation Date of all
                    Posted Credit Support held by the Secured Party, and

               (4)  the amount by which (a) the Moody's Second Trigger Credit
                    Support Amount for such Valuation Date exceeds (b) the
                    Moody's Second Trigger Value as of such Valuation Date of
                    all Posted Credit Support held by the Secured Party.

          b.   "RETURN AMOUNT" has the meaning specified in Paragraph 3(b) as
               amended by deleting in its entirety the sentence beginning
               "Unless otherwise specified in Paragraph 13" and ending "(ii) the
               Credit Support Amount." and inserting in lieu thereof the
               following:

               The "RETURN AMOUNT" applicable to the Secured Party for any
               Valuation Date will equal the least of

               (1)  the amount by which (a) the S&P Value as of such Valuation
                    Date of all Posted Credit Support held by the Secured Party
                    exceeds (b) the S&P Credit Support Amount for such Valuation
                    Date,

               (2)  the amount by which (a) the DBRS Value as of such Valuation
                    Date of all Posted Credit Support held by the Secured Party
                    exceeds (b) the DBRS Credit Support Amount for such
                    Valuation Date,

               (3)  the amount by which (a) the Moody's First Trigger Value as
                    of such Valuation Date of all Posted Credit Support held by
                    the Secured Party exceeds (b) the Moody's First Trigger
                    Credit Support Amount for such Valuation Date, and

               (4)  the amount by which (a) the Moody's Second Trigger Value as
                    of such Valuation Date of all Posted Credit Support held by
                    the Secured Party exceeds (b) the Moody's Second Trigger
                    Credit Support Amount for such Valuation Date.

          c.   "CREDIT SUPPORT AMOUNT" shall not apply. For purposes of
               calculating any Delivery Amount or Return Amount for any
               Valuation Date, reference shall be made to the S&P Credit Support
               Amount, the DBRS Credit Support Amount, the Moody's First Trigger
               Credit Support Amount, or the Moody's Second Trigger Credit
               Support Amount, in each case for such Valuation Date, as provided
               in Paragraphs 13(b)(i)(A) and 13(b)(i)(B), above.

     2.   ELIGIBLE COLLATERAL.

          On any date, the items set forth on the schedule of Eligible
          Collateral attached as Schedule A hereto will qualify as "ELIGIBLE
          COLLATERAL" (for the avoidance of doubt, all Eligible Collateral to be
          denominated in USD):

     3.   OTHER ELIGIBLE SUPPORT.

          The following items will qualify as "OTHER ELIGIBLE SUPPORT" for the
          party specified:

          Not applicable.

     4.   THRESHOLD.

          a.   "INDEPENDENT AMOUNT" means zero with respect to Party A and Party
               B.

                                      O-4-2

<PAGE>

          b.   "THRESHOLD" means, with respect to Party A and any Valuation
               Date, zero if (i) a Collateral Event has occurred and has been
               continuing (x) for at least 30 days or (y) since this Annex was
               executed, or (ii) either a S&P Required Ratings Downgrade Event
               or a DBRS Required Ratings Downgrade Event has occurred and is
               continuing; otherwise, infinity.

               "THRESHOLD" means, with respect to Party B and any Valuation
               Date, infinity.

          c.   "MINIMUM TRANSFER AMOUNT" means USD 100,000 with respect to Party
               A and Party B; provided, however, that if the aggregate
               Certificate Principal Balance and note principal balance of
               Certificates and Notes rated by S&P ceases to be more than USD
               50,000,000, the "MINIMUM TRANSFER AMOUNT" shall be USD 50,000.

          d.   ROUNDING: The Delivery Amount will be rounded up to the nearest
               integral multiple of USD 10,000. The Return Amount will be
               rounded down to the nearest integral multiple of USD 1,000.

C.   VALUATION AND TIMING.

     1.   "VALUATION AGENT" means Party A; provided, however, that if an Event
          of Default shall have occurred with respect to which Party A is the
          Defaulting Party, Party B shall have the right to designate as
          Valuation Agent an independent party, reasonably acceptable to Party
          A, the cost for which shall be borne by Party A. All calculations by
          the Valuation Agent must be made in accordance with standard market
          practice, including, in the event of a dispute as to the Value of any
          Eligible Credit Support or Posted Credit Support, by making reference
          to quotations received by the Valuation Agent from one or more Pricing
          Sources.

     2.   "VALUATION DATE" means (A) the first Local Business Day in each week
          on which any of the S&P Credit Support Amount, the DBRS Credit Support
          Amount, the Moody's First Trigger Credit Support Amount or the Moody's
          Second Trigger Credit Support Amount is greater than zero, and (B), if
          no Relevant Entity has a long-term unsubordinated and unsecured debt
          rating of at least BBB+ from S&P, also the last Local Business Day in
          each calendar month.

     3.   "VALUATION TIME" means the close of business in the city of the
          Valuation Agent on the Local Business Day immediately preceding the
          Valuation Date or date of calculation, as applicable; provided that
          the calculations of Value and Exposure will be made as of
          approximately the same time on the same date. The Valuation Agent will
          notify each party (or the other party, if the Valuation Agent is a
          party) of its calculations not later than the Notification Time on the
          applicable Valuation Date (or in the case of Paragraph 6(d), the Local
          Business Day following the day on which such relevant calculations are
          performed)."

     4.   "NOTIFICATION TIME" means 11:00 a.m., New York time, on a Local
          Business Day.

     5.   EXTERNAL VERIFICATION. Notwithstanding anything to the contrary in the
          definitions of Valuation Agent or Valuation Date, at any time at which
          Party A (or, to the extent applicable, its Credit Support Provider)
          does not have a long-term unsubordinated and unsecured debt rating of
          at least "BBB+" from S&P, the Valuation Agent shall (A) calculate the
          Secured Party's Exposure and the S&P Value of Posted Credit Suppport
          on each Valuation Date based on internal marks and (B) verify such
          calculations with external marks monthly by obtaining on the last
          Local Business Day of each calendar month two external marks for each
          Transaction to which this Annex relates and for all Posted Credit
          Suport; such verification of the Secured Party's Exposure shall be
          based on the higher of the two external marks. Each external mark in
          respect of a Transaction shall be obtained from an independent
          Reference Market-maker that would be eligible and willing to enter
          into such Transaction in the absence of the current derivative
          provider, provided that an external mark may not be obtained from the
          same Reference Market-maker more than four times in any 12-month
          period. The Valuation Agent shall obtain these external marks directly
          or through an independent third party, in either case at no cost to
          Party B. The Valuation Agent shall calculate on each

                                      O-4-3

<PAGE>

          Valuation Date (for purposes of this paragraph, the last Local
          Business Day in each calendar month referred to above shall be
          considered a Valuation Date) the Secured Party's Exposure based on the
          greater of the Valuation Agent's internal marks and the external marks
          received. If the S&P Value on any such Valuation Date of all Posted
          Credit Support then held by the Secured Party is less than the S&P
          Credit Support Amount on such Valuation Date (in each case as
          determined pursuant to this paragraph), Party A shall, within three
          Local Business Days of such Valuation Date, Transfer to the Secured
          Party Eligible Credit Support having an S&P Value as of the date of
          Transfer at least equal to such deficiency.

     6.   NOTICE TO S&P. At any time at which Party A (or, to the extent
          applicable, its Credit Support Provider) does not have a long-term
          unsubordinated and unsecured debt rating of at least "BBB+" from S&P,
          the Valuation Agent shall provide to S&P not later than the
          Notification Time on the Local Business Day following each Valuation
          Date its calculations of the Secured Party's Exposure and the S&P
          Value of any Eligible Credit Support or Posted Credit Support for that
          Valuation Date. The Valuation Agent shall also provide to S&P any
          external marks received pursuant to the preceding paragraph.

D.   CONDITIONS PRECEDENT AND SECURED PARTY'S RIGHTS AND REMEDIES. The following
     Termination Events will be a "SPECIFIED CONDITION" for the party specified
     (that party being the Affected Party if the Termination Event occurs with
     respect to that party): With respect to Party A: any Additional Termination
     Event with respect to which Party A is the sole Affected Party. With
     respect to Party B: None.

E.   SUBSTITUTION.

     1.   "SUBSTITUTION DATE" has the meaning specified in Paragraph 4(d)(ii).

     2.   CONSENT. If specified here as applicable, then the Pledgor must obtain
          the Secured Party's consent for any substitution pursuant to Paragraph
          4(d): Inapplicable.

F.   DISPUTE RESOLUTION.

     1.   "RESOLUTION TIME" means 1:00 p.m. New York time on the Local Business
          Day following the date on which the notice of the dispute is given
          under Paragraph 5.

     2.   VALUE. Notwithstanding anything to the contrary in Paragraph 12, for
          the purpose of Paragraphs 5(i)(C) and 5(ii), the S&P Value, the DBRS
          Value, the Moody's First Trigger Value, and the Moody's Second Trigger
          Value, on any date, of Eligible Collateral other than Cash will be
          calculated as follows:

          For Eligible Collateral in the form of securities listed in Paragraph
          13(b)(ii): the sum of (A) the product of (1)(x) the bid price at the
          Valuation Time for such securities on the principal national
          securities exchange on which such securities are listed, or (y) if
          such securities are not listed on a national securities exchange, the
          bid price for such securities quoted at the Valuation Time by any
          principal market maker for such securities selected by the Valuation
          Agent, or (z) if no such bid price is listed or quoted for such date,
          the bid price listed or quoted (as the case may be) at the Valuation
          Time for the day next preceding such date on which such prices were
          available and (2) the applicable Valuation Percentage for such
          Eligible Collateral, and (B) the accrued interest on such securities
          (except to the extent Transferred to the Pledgor pursuant to Paragraph
          6(d)(ii) or included in the applicable price referred to in the
          immediately preceding clause (A)) as of such date.

     3.   ALTERNATIVE. The provisions of Paragraph 5 will apply.

                                      O-4-4

<PAGE>

G.   HOLDING AND USING POSTED COLLATERAL.

     1.   ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS. Party B (or any
          Custodian) will be entitled to hold Posted Collateral pursuant to
          Paragraph 6(b).

          Party B may appoint as Custodian (A) the entity then serving as Cap
          Trustee or (B) any entity other than the entity then serving as Cap
          Trustee if such other entity (or, to the extent applicable, its parent
          company or credit support provider) shall then have a short-term
          unsecured and unsubordinated debt rating from S&P of at least "A-1."

          Initially, the CUSTODIAN for Party B is: Not applicable.

     2.   USE OF POSTED COLLATERAL. The provisions of Paragraph 6(c)(i) will not
          apply to Party B, but the provisions of Paragraph 6(c)(ii) will apply
          to Party B.

H.   DISTRIBUTIONS AND INTEREST AMOUNT.

     1.   INTEREST RATE. The "INTEREST RATE" will be the actual interest rate
          earned on Posted Collateral in the form of Cash that is held by Party
          B or its Custodian.

     2.   TRANSFER OF INTEREST AMOUNT. The Transfer of the Interest Amount will
          be made on the second Local Business Day following the end of each
          calendar month and on any other Local Business Day on which Posted
          Collateral in the form of Cash is Transferred to the Pledgor pursuant
          to Paragraph 3(b); provided, however, that the obligation of Party B
          to Transfer any Interest Amount to Party A shall be limited to the
          extent that Party B has earned and received such funds and such funds
          are available to Party B.

     3.   ALTERNATIVE TO INTEREST AMOUNT. The provisions of Paragraph 6(d)(ii)
          will apply.

I.   ADDITIONAL REPRESENTATION(S). There are no additional representations by
     either party.

J.   OTHER ELIGIBLE SUPPORT AND OTHER POSTED SUPPORT.

     1.   "VALUE" with respect to Other Eligible Support and Other Posted
          Support means: not applicable.

     2.   "TRANSFER" with respect to Other Eligible Support and Other Posted
          Support means: not applicable.

K.   DEMANDS AND NOTICES.All demands, specifications and notices under this
     Annex will be made pursuant to the Notices Section of this Agreement,
     except that any demand, specification or notice shall be given to or made
     at the following addresses, or at such other address as the relevant party
     may from time to time designate by giving notice (in accordance with the
     terms of this paragraph) to the other party:

          If to Party A, at the address specified pursuant to the Notices
          Section of this Agreement.

          If to Party B, at the address specified pursuant to the Notices
          Section of this Agreement.

          If to Party B's Custodian: Same as Party B

L.   ADDRESS FOR TRANSFERS. Each Transfer hereunder shall be made to the address
     specified below or to an address specified in writing from time to time by
     the party to which such Transfer will be made.

          Party A account details: JPMorgan Chase Bank
               SWIFT:              CHASUS33
               Account of:         Swiss Re Financial Products
               Account No.:        066-911184

                                      O-4-5

<PAGE>

               ABA#:               021000021

          Party B's Custodian account details:
               U.S Bank National Association
               ABA#: 091000022
               DDA#: 1731 0332 2058
               DDA Name: Structured Finance Wire Clearing
               FFC: 108693001/SURF07-BC1 Cap Contract Account

M.   OTHER PROVISIONS.

     1.   COLLATERAL ACCOUNT. Party B shall open and maintain a segregated
          account, which shall be an Eligible Account, and hold, record and
          identify all Posted Collateral in such segregated account.

     2.   AGREEMENT AS TO SINGLE SECURED PARTY AND SINGLE PLEDGOR. Party A and
          Party B hereby agree that, notwithstanding anything to the contrary in
          this Annex, (a) the term "Secured Party" as used in this Annex means
          only Party B, (b) the term "Pledgor" as used in this Annex means only
          Party A, (c) only Party A makes the pledge and grant in Paragraph 2,
          the acknowledgement in the final sentence of Paragraph 8(a) and the
          representations in Paragraph 9.

     3.   CALCULATION OF VALUE. Paragraph 4(c) is hereby amended by deleting the
          word "Value" and inserting in lieu thereof "S&P Value, DBRS Value,
          Moody's First Trigger Value, Moody's Second Trigger Value". Paragraph
          4(d)(ii) is hereby amended by (A) deleting the words "a Value" and
          inserting in lieu thereof "an S&P Value, DBRS Value, Moody's First
          Trigger Value, and Moody's Second Trigger Value" and (B) deleting the
          words "the Value" and inserting in lieu thereof "S&P Value, DBRS
          Value, Moody's First Trigger Value, and Moody's Second Trigger Value".
          Paragraph 5 (flush language) is hereby amended by deleting the word
          "Value" and inserting in lieu thereof "S&P Value, DBRS Value, Moody's
          First Trigger Value, or Moody's Second Trigger Value". Paragraph 5(i)
          (flush language) is hereby amended by deleting the word "Value" and
          inserting in lieu thereof "S&P Value, DBRS Value, Moody's First
          Trigger Value, and Moody's Second Trigger Value". Paragraph 5(i)(C) is
          hereby amended by deleting the word "the Value, if" and inserting in
          lieu thereof "any one or more of the S&P Value, DBRS Value, Moody's
          First Trigger Value, or Moody's Second Trigger Value, as may be".
          Paragraph 5(ii) is hereby amended by (1) deleting the first instance
          of the words "the Value" and inserting in lieu thereof "any one or
          more of the S&P Value, DBRS Value, Moody's First Trigger Value, or
          Moody's Second Trigger Value" and (2) deleting the second instance of
          the words "the Value" and inserting in lieu thereof "such disputed S&P
          Value, DBRS Value, Moody's First Trigger Value, or Moody's Second
          Trigger Value". Each of Paragraph 8(b)(iv)(B) and Paragraph 11(a) is
          hereby amended by deleting the word "Value" and inserting in lieu
          thereof "least of the S&P Value, DBRS Value, Moody's First Trigger
          Value, and Moody's Second Trigger Value".

     4.   FORM OF ANNEX. Party A and Party B hereby agree that the text of
          Paragraphs 1 through 12, inclusive, of this Annex is intended to be
          the printed form of ISDA Credit Support Annex (Bilateral Form - ISDA
          Agreements Subject to New York Law Only version) as published and
          copyrighted in 1994 by the International Swaps and Derivatives
          Association, Inc.

     5.   EVENTS OF DEFAULT. Paragraph 7 will not apply to cause any Event of
          Default to exist with respect to Party B except that Paragraph 7(i)
          will apply to Party B solely in respect of Party B's obligations under
          Paragraph 3(b) of the Credit Support Annex. Notwithstanding anything
          to the contrary in Paragraph 7, any failure by Party A to comply with
          or perform any obligation to be complied with or performed by Party A
          under the Credit Support Annex shall only be an Event of Default if
          (A) a Required Ratings Downgrade Event has occurred and been
          continuing for 30 or more Local Business Days, and (B) such failure is
          not remedied on or before the third Local Business Day after notice of
          such failure is given to Party A.

                                      O-4-6

<PAGE>

     6.   EXPENSES. Notwithstanding anything to the contrary in Paragraph 10,
          the Pledgor will be responsible for, and will reimburse the Secured
          Party for, all transfer and other taxes and other costs involved in
          any Transfer of Eligible Collateral.

     7.   WITHHOLDING. Paragraph 6(d)(ii) is hereby amended by inserting
          immediately after "the Interest Amount" in the fourth line thereof the
          words "less any applicable withholding taxes."

     8.   NOTICE OF FAILURE TO POST COLLATERAL. Upon any failure by Party A to
          post collateral as required under this Agreement, Party B shall, no
          later than the next Business Day after the date such collateral was
          required to be posted, give a written notice of such failure to Party
          A and to Depositor. For the avoidance of doubt, notwithstanding
          anything in this Agreement to the contrary, the failure of Party B to
          comply with the requirements of this paragraph shall not constitute an
          Event of Default or Termination Event.

     (ix) ADDITIONAL DEFINITIONS. As used in this Annex:

          "COLLATERAL EVENT" means that no Relevant Entity has credit ratings at
          least equal to the Approved Ratings Threshold.

          "DBRS CREDIT SUPPORT AMOUNT" means, for any Valuation Date, the
          excess, if any, of

          (I)  (A)  for any Valuation Date on which (i) a DBRS Approved Ratings
                    Downgrade Event has occurred and been continuing for at
                    least 30 days, or (ii) a DBRS Required Ratings Downgrade
                    Event has occurred and is continuing, an amount equal to the
                    sum of (1) 100.0% of the Secured Party's Exposure for such
                    Valuation Date and (2) the sum, for each Transaction to
                    which this Annex relates, of the product of the Volatility
                    Buffer for such Transaction and the Notional Amount of such
                    Transaction for the Calculation Period of such Transaction
                    which includes such Valuation Date, or

               (B)  for any other Valuation Date, zero, over

          (II) the Threshold for Party A for such Valuation Date.

          "DBRS VALUE" means, on any date and with respect to any Eligible
          Collateral other than Cash, the product of (A) the bid price obtained
          by the Valuation Agent for such Eligible Collateral and (B) the DBRS
          Valuation Percentage for such Eligible Collateral set forth in
          paragraph 13(b)(ii).

          "DV01" means, with respect to a Transaction and any date of
          determination, the estimated change in the Secured Party's Transaction
          Exposure with respect to such Transaction that would result from a one
          basis point change in the relevant swap curve on such date, as
          determined by the Valuation Agent in good faith and in a commercially
          reasonable manner. The Valuation Agent shall, upon request of Party B,
          provide to Party B a statement showing in reasonable detail such
          calculation.

          "EXPOSURE" has the meaning specified in Paragraph 12, except that
          after the word "Agreement" the words "(assuming, for this purpose
          only, that Part 1(f) of the Schedule is deleted)" shall be inserted.

          "LOCAL BUSINESS DAY" means: any day on which (A) commercial banks are
          open for business (including dealings in foreign exchange and foreign
          currency deposits) in New York and the location of Party A, Party B
          and any Custodian, and (B) in relation to a Transfer of Eligible
          Collateral, any day on which the clearance system agreed between the
          parties for the delivery of Eligible Collateral is open for acceptance
          and execution of settlement instructions (or in the case of a Transfer
          of Cash or other Eligible Collateral for which delivery is
          contemplated by other means a day on which commercial banks are open
          for business (including dealings in foreign exchange and foreign
          deposits) in New York and the location of Party A, Party B and any
          Custodian.

                                      O-4-7

<PAGE>

          "MOODY'S FIRST TRIGGER CREDIT SUPPORT AMOUNT" means, for any Valuation
          Date, the excess, if any, of

          (I)  (A)  for any Valuation Date on which (I) a Moody's First Trigger
                    Ratings Event has occurred and has been continuing (x) for
                    at least 30 Local Business Days or (y) since this Annex was
                    executed and (II) it is not the case that a Moody's Second
                    Trigger Event has occurred and been continuing for at least
                    30 Local Business Days, an amount equal to the greater of
                    (a) zero and (b) the sum of (i) the Secured Party's Exposure
                    for such Valuation Date and (ii) the sum, for each
                    Transaction to which this Annex relates, of the lesser of
                    (x) the product of the Moody's First Trigger DV01 Multiplier
                    and DV01 for such Transaction and such Valuation Date and
                    (y) the product of Moody's First Trigger Notional Amount
                    Multiplier and the Notional Amount for such Transaction for
                    the Calculation Period which includes such Valuation Date;
                    the product of the applicable Moody's First Trigger Factor
                    set forth in Table 1 and the Notional Amount for such
                    Transaction for the Calculation Period which includes such
                    Valuation Date; or

               (B)  for any other Valuation Date, zero, over

          (II) the Threshold for Party A such Valuation Date.

          "MOODY'S FIRST TRIGGER DV01 MULTIPLIER" means 25.

          "MOODY'S FIRST TRIGGER VALUE" means, on any date and with respect to
          any Eligible Collateral other than Cash, the bid price obtained by the
          Valuation Agent multiplied by the Moody's First Trigger Valuation
          Percentage for such Eligible Collateral set forth in Paragraph
          13(b)(ii).

          "MOODY'S FIRST TRIGGER NOTIONAL AMOUNT MULTIPLIER" means 4%.

          "MOODY'S SECOND TRIGGER CREDIT SUPPORT AMOUNT" means, for any
          Valuation Date, the excess, if any, of

          (I)  (A)  for any Valuation Date on which it is the case that a
                    Moody's Second Trigger Ratings Event has occurred and been
                    continuing for at least 30 Local Business Days, an amount
                    equal to the greatest of (a) zero, (b) the aggregate amount
                    of the next payment due to be paid by Party A under each
                    Transaction to which this Annex relates, and (c) the sum of
                    (x) the Secured Party's Exposure for such Valuation Date and
                    (y) the sum, for each Transaction to which this Annex
                    relates, of

                    (1)  if such Transaction is not a Transaction-Specific
                         Hedge, the lesser of (i) the product of the Moody's
                         Second Trigger DV01 Multiplier and DV01 for such
                         Transaction and such Valuation Date and (ii) the
                         product of the Moody's Second Trigger Notional Amount
                         Multiplier and the Notional Amount for such Transaction
                         for the Calculation Period which includes such
                         Valuation Date;

                         the product of the applicable Moody's Second Trigger
                         Factor set forth in Table 2 and the Notional Amount for
                         such Transaction for the Calculation Period which
                         includes such Valuation Date; or

                    (2)  if such Transaction is a Transaction-Specific Hedge,
                         the lesser of (i) the product of the Moody's Second
                         Trigger Transaction-Specific Hedge DV01 Multiplier and
                         DV01 for such

                                      O-4-8

<PAGE>

                         Transaction and such Valuation Date and (ii) the
                         product of the Moody's Second Trigger
                         Transaction-Specific Hedge Notional Amount Multiplier
                         and the Notional Amount for such Transaction for the
                         Calculation Period which includes such Valuation Date;

                         the product of the applicable Moody's Second Trigger
                         Factor set forth in Table 3 and the Notional Amount for
                         such Transaction for the Calculation Period which
                         includes such Valuation Date; or

               (B)  for any other Valuation Date, zero, over

          (II) the Threshold for Party A for such Valuation Date.

          "MOODY'S SECOND TRIGGER DV01 MULTIPLIER" means 60.

          "MOODY'S SECOND TRIGGER TRANSACTION-SPECIFIC HEDGE DV01 MULTIPLIER"
          means 75.

          "MOODY'S SECOND TRIGGER TRANSACTION-SPECIFIC HEDGE NOTIONAL AMOUNT
          MULTIPLIER" means 11%.

          "MOODY'S SECOND TRIGGER VALUE" means, on any date and with respect to
          any Eligible Collateral other than Cash, the bid price obtained by the
          Valuation Agent multiplied by the Moody's Second Trigger Valuation
          Percentage for such Eligible Collateral set forth in Paragraph
          13(b)(ii).

          "MOODY'S SECOND TRIGGER NOTIONAL AMOUNT MULTIPLIER" means 9%.

          "PRICING SOURCES" means the sources of financial information commonly
          known as Bloomberg, Bridge Information Services, Data Resources Inc.,
          Interactive Data Services, International Securities Market
          Association, Merrill Lynch Securities Pricing Service, Muller Data
          Corporation, Reuters, Wood Gundy, Trepp Pricing, JJ Kenny, S&P and
          Telerate.

          "S&P CREDIT SUPPORT AMOUNT" means, for any Valuation Date, the excess,
          if any, of

          (I)  (A)  for any Valuation Date on which (i) a S&P Approved Ratings
                    Downgrade Event has occurred and been continuing for at
                    least 30 days, or (ii) a S&P Required Ratings Downgrade
                    Event has occurred and is continuing, an amount equal to the
                    sum of (1) 100.0% of the Secured Party's Exposure for such
                    Valuation Date and (2) the sum, for each Transaction to
                    which this Annex relates, of the product of the Volatility
                    Buffer for such Transaction and the Notional Amount of such
                    Transaction for the Calculation Period of such Transaction
                    which includes such Valuation Date, or

               (B)  for any other Valuation Date, zero, over

          (II) the Threshold for Party A for such Valuation Date.

          "S&P VALUE" means, on any date and with respect to any Eligible
          Collateral other than Cash, the product of (A) the bid price obtained
          by the Valuation Agent for such Eligible Collateral and (B) the S&P
          Valuation Percentage for such Eligible Collateral set forth in
          paragraph 13(b)(ii).

          "TRANSACTION EXPOSURE" means, for any Transaction, Exposure determined
          as if such Transaction were the only Transaction between the Secured
          Party and the Pledgor.

          "TRANSACTION-SPECIFIC HEDGE" means any Transaction that is an interest
          rate cap, interest rate floor or interest rate swaption, or an
          interest rate swap if (x) the notional amount of the interest rate
          swap is "balance guaranteed" or (y) the notional amount of the
          interest rate swap for any Calculation Period otherwise is not a
          specific dollar amount that is fixed at the inception of the
          Transaction.

                                      O-4-9

<PAGE>

          "VALUATION PERCENTAGE" shall mean, for purposes of determining the S&P
          Value, the DBRS Value, the Moody's First Trigger Value, or the Moody's
          Second Trigger Value with respect to any Eligible Collateral or Posted
          Collateral, the applicable S&P Valuation Percentage, DBRS Valuation
          Percentage, Moody's First Trigger Valuation Percentage, or Moody's
          Second Trigger Valuation Percentage for such Eligible Collateral or
          Posted Collateral, respectively, in each case as set forth in
          Paragraph 13(b)(ii).

          "VALUE" shall mean, in respect of any date, the related S&P Value, the
          related DBRS Value the related Moody's First Trigger Value, and the
          related Moody's Second Trigger Value.

          "VOLATILITY BUFFER" means, for any Transaction, the related percentage
          set forth in the following table.

<TABLE>
<CAPTION>
The higher of the S&P          Remaining       Remaining        Remaining        Remaining
credit rating of (i) Party      Weighted        Weighted        Weighted         Weighted
A and (ii) the Credit           Average         Average          Average          Average
Support Provider of             Maturity        Maturity        Maturity         Maturity
Party A, if applicable       up to 3 years   up to 5 years   up to 10 years   up to 30 years
--------------------------   -------------   -------------   --------------   --------------
<S>                          <C>             <C>             <C>              <C>
At least "A-2"                   2.75%            3.25%           4.00%            4.75%
"A-3"                            3.25%            4.00%           5.00%            6.25%
"BB+" or lower                   3.50%            4.50%           6.75%            7.50%
</TABLE>

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                     O-4-10
<PAGE>

TABLE 1

                          MOODY'S FIRST TRIGGER FACTOR

<TABLE>
<CAPTION>
                                      WEEKLY
REMAINING WEIGHTED AVERAGE LIFE     COLLATERAL
       OF HEDGE IN YEARS              POSTING
-------------------------------     ----------
<S>                                 <C>
            1 or less                  0.25%
More than 1 but not more than 2        0.50%
More than 2 but not more than 3        0.70%
More than 3 but not more than 4        1.00%
More than 4 but not more than 5        1.20%
More than 5 but not more than 6        1.40%
More than 6 but not more than 7        1.60%
More than 7 but not more than 8        1.80%
More than 8 but not more than 9        2.00%
More than 9 but not more than 10       2.20%
More than 10 but not more than 11      2.30%
More than 11 but not more than 12      2.50%
More than 12 but not more than 13      2.70%
More than 13 but not more than 14      2.80%
More than 14 but not more than 15      3.00%
More than 15 but not more than 16      3.20%
More than 16 but not more than 17      3.30%
More than 17 but not more than 18      3.50%
More than 18 but not more than 19      3.60%
More than 19 but not more than 20      3.70%
More than 20 but not more than 21      3.90%
More than 21 but not more than 22      4.00%
More than 22 but not more than 23      4.00%
More than 23 but not more than 24      4.00%
More than 24 but not more than 25      4.00%
More than 25 but not more than 26      4.00%
More than 26 but not more than 27      4.00%
More than 27 but not more than 28      4.00%
More than 28 but not more than 29      4.00%
           More than 29                4.00%
</TABLE>

                                     O-4-11

<PAGE>

TABLE 2

                                   (Reserved)

                                     O-4-12

<PAGE>

TABLE 3

          MOODY'S SECOND TRIGGER FACTOR FOR TRANSACTION-SPECIFIC HEDGES

<TABLE>
<CAPTION>
                                      WEEKLY
REMAINING WEIGHTED AVERAGE LIFE     COLLATERAL
OF HEDGE IN YEARS                     POSTING
-------------------------------     ----------
<S>                                 <C>
            1 or less                  0.75%
More than 1 but not more than 2        1.50%
More than 2 but not more than 3        2.20%
More than 3 but not more than 4        2.90%
More than 4 but not more than 5        3.60%
More than 5 but not more than 6        4.20%
More than 6 but not more than 7        4.80%
More than 7 but not more than 8        5.40%
More than 8 but not more than 9        6.00%
More than 9 but not more than 10       6.60%
More than 10 but not more than 11      7.00%
More than 11 but not more than 12      7.50%
More than 12 but not more than 13      8.00%
More than 13 but not more than 14      8.50%
More than 14 but not more than 15      9.00%
More than 15 but not more than 16      9.50%
More than 16 but not more than 17      9.90%
More than 17 but not more than 18     10.40%
More than 18 but not more than 19     10.80%
More than 19 but not more than 20     11.00%
More than 20 but not more than 21     11.00%
More than 21 but not more than 22     11.00%
More than 22 but not more than 23     11.00%
More than 23 but not more than 24     11.00%
More than 24 but not more than 25     11.00%
More than 25 but not more than 26     11.00%
More than 26 but not more than 27     11.00%
More than 27 but not more than 28     11.00%
More than 28 but not more than 29     11.00%
            More than 29              11.00%
</TABLE>

                                     O-4-13

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Annex by their duly
authorized representatives as of the date of the Agreement.

Swiss Re Financial Products             U.S. Bank National Association, in its
Corporation                             capacity as Trustee with respect to
                                        Specialty Underwriting and Residential
                                        Finance, Series 2007-BC1

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

                                     O-4-14

<PAGE>

                                   SCHEDULE A

                               ELIGIBLE COLLATERAL

<TABLE>
<CAPTION>
                                                           BOTH S&P       MOODY'S          MOODY'S
  ISDA COLLATERAL                                          AND DBRS    FIRST TRIGGER   SECOND TRIGGER
 ASSET DEFINITION                                         VALUATION      VALUATION        VALUATION
    (ICAD) CODE         REMAINING MATURITY IN YEARS      PERCENTAGES     PERCENTAGE      PERCENTAGE
 ----------------    ---------------------------------   -----------   -------------   --------------
<S>                  <C>                                 <C>           <C>             <C>
(A) US-CASH                        N/A                       100%         100%              100%
(B) US-TBILL
    US-TNOTE
    US-TBOND
  (USDollar Fixed
Rate in all cases)
                                 1 or less                   98.6%        100%              100%
                      More than 1 but not more than 2        97.3%        100%               99%
                      More than 2 but not more than 3        95.8%        100%               98%
                      More than 3 but not more than 5        93.8%        100%               97%
                      More than 5 but not more than 7        91.4%        100%               95%
                      More than 7 but not more than 10       90.3%        100%               94%
                     More than 10 but not more than 20       86.9%        100%               89%
                                More than 20                 84.6%        100%               87%
(C) US-GNMA
    US-FNMA
    US-FHLMC
  (USDollar Fixed
Rate in all cases)
                                 1 or less                   98.0%        100%               99%
                      More than 1 but not more than 2        96.8%        100%               98%
                      More than 2 but not more than 3        96.3%        100%               97%
                      More than 3 but not more than 5        92.5%        100%               96%
                      More than 5 but not more than 7        90.3%        100%               94%
                      More than 7 but not more than 10       86.9%        100%               93%
                     More than 10 but not more than 20       81.6%        100%               88%
                                More than 20                 77.9%        100%               86%
</TABLE>

The ISDA Collateral Asset Definition (ICAD) Codes used in this Schedule A are
taken from the Collateral Asset Definitions (First Edition - June 2003) as
published and copyrighted in 2003 by the International Swaps and Derivatives
Association, Inc.

                                     O-4-15

<PAGE>

                                    EXHIBIT P

                                   [RESERVED]

                                       P-1

<PAGE>

                                    EXHIBIT Q

                        FORM OF ASSESSMENT OF COMPLIANCE

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

U.S. Bank National Association
60 Livingston Avenue
Mail Code EP-MN-WS3D
St. Paul, Minnesota 55107-2292
Attention: Structured Finance/SURF 2007-BC1

Wilshire Credit Corporation
14523 SW Millikan Way
Suite 200
Beaverton, Oregon 97005

Moody's Investors Service, Inc.
99 Church Street, 4th Floor
New York, New York 10007

Standard & Poor's, a division of
The McGraw-Hill Companies, Inc.
25 Broadway, 12th Floor
New York, New York 10004

     Re:  Pooling and Servicing Agreement (the "Agreement"), dated as of January
          1, 2007, among Merrill Lynch Mortgage Investors, Inc., as depositor,
          Wilshire Credit Corporation, as servicer, and U.S. Bank National
          Association, as trustee, relating to Specialty Underwriting and
          Residential Finance Trust, Mortgage Loan Asset-Backed Certificates,
          Series 2007-BC1 (the "Trust")

          For the calendar year ending December 31, [2007] or portion thereof,
[U.S. Bank National Association, as Trustee] [Wilshire Credit Corporation, as
Servicer], for the Trust has complied in all material respects with the relevant
Servicing Criteria in Exhibit R of the Agreement.

                                       Q-1

<PAGE>

          All capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Agreement.

Date:
      -------------------------------

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

                                       Q-2
<PAGE>

                                    EXHIBIT R

                       SERVICING CRITERIA TO BE ADDRESSED
                           IN ASSESSMENT OF COMPLIANCE
                          (RMBS unless otherwise noted)

DEFINITIONS                                                       KEY:

PRIMARY SERVICER - transaction party having borrower contact      X - obligation

CUSTODIAN - safe keeper of certain  pool assets
TRUSTEE - fiduciary of the transaction and safe keeper of certain pool assets

WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN THEIR MANAGEMENT ASSERTION THAT THEY ARE ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN THEY ARE RESPONSIBLE FOR IN THE RELATED TRANSACTION
AGREEMENTS.

<TABLE>
<CAPTION>
                                                           WILSHIRE
                                                            CREDIT
REGULATION AB                                            CORPORATION      U.S. BANK         ADDITIONAL
REFERENCE                  SERVICING CRITERIA             (SERVICER)      (TRUSTEE)        INFORMATION
----------------   ----------------------------------   -------------   ------------   -------------------
<S>                <C>                                  <C>             <C>            <C>
                   GENERAL SERVICING  CONSIDERATIONS

1122(d)(1)(i)      Policies and procedures are                X               X        Servicer and
                   instituted to monitor any                                           Trustee each
                   performance or other triggers and                                   responsible only to
                   events of default in accordance                                     the extent that
                   with the transaction agreements.                                    each party, as
                                                                                       applicable, has
                                                                                       actual knowledge or
                                                                                       written notice with
                                                                                       respect to parties
                                                                                       other than itself.

1122(d)(1)(ii)     If any material servicing            IF APPLICABLE        IF
                   activities are outsourced to third       FOR A        APPLICABLE
                   parties, policies and procedures      TRANSACTION        FOR A
                   are instituted to monitor the         PARTICIPANT     TRANSACTION
                   third party's performance and                         PARTICIPANT
                   compliance with such servicing
                   activities.

1122(d)(1)(iii)    Any requirements in the                   N/A             N/A
                   transaction agreements to maintain
                   a back-up servicer for the Pool
                   Assets are maintained.

1122(d)(1)(iv)     A fidelity bond and errors and             X
                   omissions policy is in effect on
                   the party participating in the
                   servicing function throughout the
                   reporting period in the amount of
                   coverage required by and otherwise
                   in accordance with the terms of
                   the transaction agreements.

                   CASH COLLECTION AND ADMINISTRATION

1122(d)(2)(i)      Payments on pool assets are                X               X        Servicer and
                   deposited into the appropriate                                      Trustee each
                   custodial bank                                                      responsible only
</TABLE>

                                       R-1

<PAGE>

<TABLE>
<CAPTION>
                                                           WILSHIRE
                                                            CREDIT
REGULATION AB                                            CORPORATION      U.S. BANK         ADDITIONAL
REFERENCE                  SERVICING CRITERIA             (SERVICER)      (TRUSTEE)        INFORMATION
----------------   ----------------------------------   -------------   ------------   -------------------
<S>                <C>                                  <C>             <C>            <C>
                   accounts and related bank clearing                                  for deposits into
                   accounts no more than two (2)                                       the accounts held
                   business days following receipt,                                    by it.
                   or such other number of days
                   specified in the transaction
                   agreements.

1122(d)(2)(ii)     Disbursements made via wire                X               X        Servicer disburses
                   transfer on behalf of an obligor                                    funds to trustee.
                   or to an investor are made only by                                  Trustee disburses
                   authorized personnel.                                               funds to
                                                                                       Certificateholders.

1122(d)(2)(iii)    Advances of funds or guarantees            X
                   regarding collections, cash flows
                   or distributions, and any interest
                   or other fees charged for such
                   advances, are made, reviewed and
                   approved as specified in the
                   transaction agreements.

1122(d)(2)(iv)     The related accounts for the               X
                   transaction, such as cash reserve
                   accounts or accounts established
                   as a form of over
                   collateralization, are separately
                   maintained (e.g., with respect to
                   commingling of cash) as set forth
                   in the transaction agreements.

1122(d)(2)(v)      Each custodial account is                  X
                   maintained at a federally insured
                   depository institution as set
                   forth in the transaction
                   agreements. For purposes of this
                   criterion, "federally insured
                   depository institution" with
                   respect to a foreign financial
                   institution means a foreign
                   financial institution that meets
                   the requirements of Rule
                   13k-1(b)(1) of the Securities
                   Exchange Act.

1122(d)(2)(vi)     Unissued checks are safeguarded so         X
                   as to prevent unauthorized access.

1122(d)(2)(vii)    Reconciliations are prepared on a          X               X
                   monthly basis for all asset-backed
                   securities related bank accounts,
                   including custodial accounts and
                   related bank clearing accounts.
                   These reconciliations are (A)
                   mathematically accurate; (B)
                   prepared within thirty (30)
                   calendar days after the bank
                   statement cutoff date, or such
                   other number of days specified in
                   the transaction agreements; (C)
                   reviewed and approved by someone
                   other than the person who prepared
                   the reconciliation; and (D)
                   contain explanations for
                   reconciling items. These
                   reconciling items are resolved
                   within ninety (90) calendar days
                   of their original identification,
                   or such other number of days
                   specified in the
</TABLE>

                                       R-2

<PAGE>

<TABLE>
<CAPTION>
                                                           WILSHIRE
                                                            CREDIT
REGULATION AB                                            CORPORATION      U.S. BANK         ADDITIONAL
REFERENCE                  SERVICING CRITERIA             (SERVICER)      (TRUSTEE)        INFORMATION
----------------   ----------------------------------   -------------   ------------   -------------------
<S>                <C>                                  <C>             <C>            <C>
                   transaction agreements.

                   INVESTOR REMITTANCES AND REPORTING

1122(d)(3)(i)      Reports to investors, including            X               X
                   those to be filed with the
                   Commission, are maintained in
                   accordance with the transaction
                   agreements and applicable
                   Commission requirements.
                   Specifically, such reports (A) are
                   prepared in accordance with
                   timeframes and other terms set
                   forth in the transaction
                   agreements; (B) provide
                   information calculated in
                   accordance with the terms
                   specified in the transaction
                   agreements; (C) are filed with the
                   Commission as required by its
                   rules and regulations; and (D)
                   agree with investors' or the
                   trustee's records as to the total
                   unpaid principal balance and
                   number of Pool Assets serviced by
                   the Servicer.

1122(d)(3)(ii)     Amounts due to investors are               X               X        Wilshire remits
                   allocated and remitted in                                           cash and loan level
                   accordance with timeframes,                                         data to trustee
                   distribution priority and other                                     based on timelines
                   terms set forth in the transaction                                  established in the
                   agreements.                                                         Pooling and
                                                                                       Servicing
                                                                                       Agreement. The
                                                                                       trustee is
                                                                                       responsible for the
                                                                                       allocation of funds
                                                                                       to
                                                                                       Certificateholders
                                                                                       using the
                                                                                       appropriate
                                                                                       distribution
                                                                                       priority as
                                                                                       established by the
                                                                                       Pooling and
                                                                                       Servicing Agreement.

1122(d)(3)(iii)    Disbursements made to an investor                          X        Trustee disburses
                   are posted within two (2) business                                  funds to
                   days to the Servicer's investor                                     Certificateholders.
                   records, or such other number of
                   days specified in the transaction
                   agreements.

1122(d)(3)(iv)     Amounts remitted to investors per          X               X        Servicer remits
                   the investor reports agree with                                     funds and provides
                   cancelled checks, or other form of                                  certain investor
                   payment, or custodial bank                                          reports to trustees
                   statements.                                                         within guidelines
                                                                                       and timeframes
                                                                                       established in
                                                                                       Pooling and
                                                                                       Servicing
                                                                                       Agreement.
                                                                                       Trustee disburses
                                                                                       funds to
                                                                                       Certificateholders.

                   POOL ASSET ADMINISTRATION

1122(d)(4)(i)      Collateral or security on pool             X
                   assets is
</TABLE>

                                       R-3

<PAGE>

<TABLE>
<CAPTION>
                                                           WILSHIRE
                                                            CREDIT
REGULATION AB                                            CORPORATION      U.S. BANK         ADDITIONAL
REFERENCE                  SERVICING CRITERIA             (SERVICER)      (TRUSTEE)        INFORMATION
----------------   ----------------------------------   -------------   ------------   -------------------
<S>                <C>                                  <C>             <C>            <C>
                   maintained as required by the
                   transaction agreements or related
                   pool asset documents.

1122(d)(4)(ii)     Pool assets  and related documents         X               X
                   are safeguarded as required by the
                   transaction agreements

1122(d)(4)(iii)    Any additions, removals or                 X               X        Trustee shall only
                   substitutions to the asset pool                                     review, not
                   are made, reviewed and approved in                                  approve, such
                   accordance with any conditions or                                   additions, removals
                   requirements in the transaction                                     or substitutions in
                   agreements.                                                         accordance with the
                                                                                       transaction
                                                                                       agreements.

1122(d)(4)(iv)     Payments on pool assets, including         X
                   any payoffs, made in accordance
                   with the related pool asset
                   documents are posted to the
                   Servicer's obligor records
                   maintained no more than two (2)
                   business days after receipt, or
                   such other number of days
                   specified in the transaction
                   agreements, and allocated to
                   principal, interest or other items
                   (e.g., escrow) in accordance with
                   the related pool asset documents.

1122(d)(4)(v)      The Servicer's records regarding           X
                   the pool assets agree with the
                   Servicer's records with respect to
                   an obligor's unpaid principal
                   balance.

1122(d)(4)(vi)     Changes with respect to the terms          X
                   or status of an obligor's pool
                   assets (e.g., loan modifications
                   or re-agings) are made, reviewed
                   and approved by authorized
                   personnel in accordance with the
                   transaction agreements and related
                   pool asset documents.

1122(d)(4)(vii)    Loss mitigation or recovery                X
                   actions (e.g., forbearance plans,
                   modifications and deeds in lieu of
                   foreclosure, foreclosures and
                   repossessions, as applicable) are
                   initiated, conducted and concluded
                   in accordance with the timeframes
                   or other requirements established
                   by the transaction agreements.

1122(d)(4)(viii)   Records documenting collection             X
                   efforts are maintained during the
                   period a pool asset is delinquent
                   in accordance with the transaction
                   agreements. Such records are
                   maintained on at least a monthly
                   basis, or such other period
                   specified in the transaction
                   agreements, and describe the
                   entity's activities in monitoring
</TABLE>

                                       R-4

<PAGE>

<TABLE>
<CAPTION>
                                                           WILSHIRE
                                                            CREDIT
REGULATION AB                                            CORPORATION      U.S. BANK         ADDITIONAL
REFERENCE                  SERVICING CRITERIA             (SERVICER)      (TRUSTEE)        INFORMATION
----------------   ----------------------------------   -------------   ------------   -------------------
<S>                <C>                                  <C>             <C>            <C>
                   delinquent pool assets including,
                   for example, phone calls, letters
                   and payment rescheduling plans in
                   cases where delinquency is deemed
                   temporary (e.g., illness or
                   unemployment).

1122(d)(4)(ix)     Adjustments to interest rates or           X
                   rates of return for pool assets
                   with variable rates are computed
                   based on the related pool asset
                   documents.

1122(d)(4)(x)      Regarding any funds held in trust          X
                   for an obligor (such as escrow
                   accounts): (A) such funds are
                   analyzed, in accordance with the
                   obligor's pool asset documents, on
                   at least an annual basis, or such
                   other period specified in the
                   transaction agreements; (B)
                   interest on such funds is paid, or
                   credited, to obligors in
                   accordance with applicable pool
                   asset documents and state laws;
                   and (C) such funds are returned to
                   the obligor within thirty (30)
                   calendar days of full repayment of
                   the related pool assets, or such
                   other number of days specified in
                   the transaction agreements.

1122(d)(4)(xi)     Payments made on behalf of an              X
                   obligor (such as tax or insurance
                   payments) are made on or before
                   the related penalty or expiration
                   dates, as indicated on the
                   appropriate bills or notices for
                   such payments, provided that such
                   support has been received by the
                   servicer at least thirty (30)
                   calendar days prior to these
                   dates, or such other number of
                   days specified in the transaction
                   agreements.

1122(d)(4)(xii)    Any late payment penalties in              X
                   connection with any payment to be
                   made on behalf of an obligor are
                   paid from the Servicer's funds and
                   not charged to the obligor, unless
                   the late payment was due to the
                   obligor's error or omission.

1122(d)(4)(xiii)   Disbursements made on behalf of an         X
                   obligor are posted within two (2)
                   business days to the obligor's
                   records maintained by the
                   servicer, or such other number of
                   days specified in the transaction
                   agreements.

1122(d)(4)(xiv)    Delinquencies, charge-offs and             X
                   uncollectible accounts are
                   recognized and recorded in
                   accordance with the transaction
                   agreements.

1122(d)(4)(xv)     Any external enhancement or other                          X
</TABLE>

                                       R-5

<PAGE>

<TABLE>
<CAPTION>
                                                           WILSHIRE
                                                            CREDIT
REGULATION AB                                            CORPORATION      U.S. BANK         ADDITIONAL
REFERENCE                  SERVICING CRITERIA             (SERVICER)      (TRUSTEE)        INFORMATION
----------------   ----------------------------------   -------------   ------------   -------------------
<S>                <C>                                  <C>             <C>            <C>
                   support, identified in Item
                   1114(a)(1) through (3) or Item
                   1115 of Regulation AB, is
                   maintained as set forth in the
                   transaction agreements.
</TABLE>

                                       R-6
<PAGE>

                                    EXHIBIT S

                          SARBANES-OXLEY CERTIFICATIONS

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

U.S. Bank National Association
60 Livingston Avenue
Mail Code EP-MN-WS3D
St. Paul, Minnesota 55107-2292
Attention: Structured Finance/SURF 2007-BC1

     Re: Specialty Underwriting and Residential Finance Trust, Mortgage Loan
         Asset-Backed Certificates, Series 2007-BC1

          I, [identify the certifying individual], certify that:

     1. I, or persons under my supervision, have reviewed the report on Form
10-K and all reports on Form 10-D required to be filed in respect of the period
covered by this report on Form 10-K of [identify the issuing entity] (the
"Exchange Act periodic reports");

     2. Based on my knowledge, the Exchange Act periodic reports 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 with respect to the period covered by
this report;

     3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;

     4. [I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic
reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s); and]

     5. All of the reports on assessment of compliance with servicing criteria
for ABS and their related attestation reports on assessment of compliance with
servicing criteria for asset-backed securities required to be included in this
report in accordance with Item 1122 of Regulation AB and Exchange Act Rules
13a-18 and 15d-18 have been included as an exhibit to this report, except as
otherwise disclosed in this report. Any material instances of noncompliance
described in such reports have been disclosed in this report on Form 10-K.

                                       S-1

<PAGE>

          [In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties [name of
servicer, subservicer, co-servicer, depositor or trustee].]

Date:
      -------------------------------

                                        ----------------------------------------
                                        [Signature]

                                        ----------------------------------------
                                        [Title]

                                       S-2

<PAGE>

                                    EXHIBIT T

                   FORM OF ITEM 1123 CERTIFICATION OF SERVICER

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

U.S. Bank National Association
60 Livingston Avenue
Mail Code EP-MN-WS3D
St. Paul, Minnesota 55107-2292
Attention: Structured Finance/SURF 2007-BC1

Re:  Pooling and Servicing Agreement (the "Agreement"), dated as of January 1,
     2007, among Merrill Lynch Mortgage Investors, Inc., as depositor, Wilshire
     Credit Corporation, as servicer, and U.S. Bank National Association, as
     trustee, relating to Specialty Underwriting and Residential Finance Trust,
     Mortgage Loan Asset-Backed Certificates, Series 2007-BC1

I, [identify name of certifying individual], [title of certifying individual] of
Wilshire Credit Corporation (the "Servicer"), hereby certify that:

          (1) A review of the activities of the Servicer during the preceding
calendar year and of the performance of the Servicer under the Agreement has
been made under my supervision; and

          (2) To the best of my knowledge, based on such review, the Servicer
has fulfilled all its obligations under the Agreement in all material respects
throughout such year or a portion thereof[, or, if there has been a failure to
fulfill any such obligation in any material respect, I have specified below each
such failure known to me and the nature and status thereof].

Date:
      -------------------------------

                                        Wilshire Credit Corporation, as Servicer

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

                                       T-1

<PAGE>

                                   EXHIBIT U-1

                             FORM OF SWAP AGREEMENT

                     SWISS RE FINANCIAL PRODUCTS CORPORATION
                               55 East 52nd Street
                            New York, New York 10055
                    Fax: (917) 322-7201/Phone: (212) 407-7322

DATE:   January 24, 2007

TO:     U.S. Bank National Association, in its capacity as Supplemental Interest
        Trust Ttrustee for the Supplemental Interest Trust with respect to the
        Speciality Underwriting and Residential Finance Trust, Mortgage Loan
        Asset-Backed Certificates, Series 2007-BC1 ("Party B")

FROM:   Swiss Re Financial Products Corporation ("Party A")

RE:     Swap Transaction

Dear Sir or Madam:

          The purpose of this letter agreement (this "Confirmation") is to
confirm the terms and conditions of the transaction entered into between us on
the Trade Date specified below (the "Transaction").

          The definitions and provisions contained in the 2000 ISDA Definitions
as published by the International Swaps and Derivatives Association, Inc. are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern.

          This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of January 24, 2007, as amended and supplemented from time to time (the
"Agreement") between Party A and Party B. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.

1.   The Swap Transaction to which this Confirmation relates is a Rate Swap
     Transaction, the terms of which are as follow:

General Terms

Trade Date:                      January 11, 2007

Effective Date:                  July 25, 2007

Termination Date:                January 25, 2011, subject to adjustment in
                                 accordance with

                                      U-l-1

<PAGE>

                                 the Following Business Day Convention

Notional Amount:                 See Amortization Schedule, Schedule A

Fixed Amounts:
   Fixed Rate Payer:             Party B

   Fixed Rate Payer              The 25th day of each month of each year,
   Period End Dates:             commencing on August 25, 2007 to and including
                                 the Termination Date, with No Adjustment to
                                 Period End Dates.

   Fixed Rate Payer Payment      Early Payment, two (2) Business Day preceding
   Dates:                        each Fixed Rate Payer Period End Date.

   Fixed Rate                    5.00%

   Fixed Rate Day Count          30/360
   Fraction:

Floating Amounts:

   Floating Rate Payer:          Party A

   Floating Rate Payer Period    The 25th day of each month of each year,
   End Dates:                    commencing on August 25, 2007 to and including
                                 the Termination Date, subject to adjustment in
                                 accordance with the Following Business Day
                                 Convention.

   Floating Rate Payer Payment   Early Payment, two (2) Business Day preceding
   Dates:                        each Floating Rate Payer Period End Date.

   Floating Rate Option:         USD-LIBOR-BBA

   Designated Maturity:          One month

   Spread:                       None

   Floating Rate Day Count       Actual/360
   Fraction:

   Reset Dates:                  The first day of each Calculation Period.

   Compounding:                  Inapplicable

   Business Day:                 Any day other than (i) a Saturday or a Sunday,
                                 or (ii) a day on which banking institutions in
                                 (1) the city in which the Corporate Trust
                                 Office of Party B is located or (2) the States
                                 of New York, Colorado or Illinois are closed.

                                      U-1-2

<PAGE>

   Floating Rate Payer Upfront   $785,000. Merrill Lynch Mortgage Lending, Inc.
   Payment:                      shall pay the Floating Rate Payer Upfront
                                 Payment on or prior to January 24, 2007,
                                 subject to adjustment in accordance with the
                                 Following Business Day Convention.

2.   Procedural Terms:

   Calculation Agent:            Party A

   Offices:                      The Office of Party A for the Swap Transaction
                                 is New York

   Account Details:

   Payments to Party A:          JPMorgan Chase Bank
                                 ABA # 021000021
                                 SWIFT: CHASUS33
                                 For the Account of Swiss Re Financial Products
                                 Corporation
                                 Account No.: _____________

   Payments to Party B:          U.S Bank National Association
                                 ABA#: 091000022
                                 DDA#: 1731 0332 2058
                                 DDA Name: Structured Finance Wire Clearing
                                 FFC: 108693002/SURF07-BC1 Swap Contract Account

Please confirm that the foregoing correctly sets forth the terms and conditions
of our agreement by executing this Confirmation and returning it to us by
facsimile to:

                     SWISS RE FINANCIAL PRODUCTS CORPORATION
                      ATTENTION: DERIVATIVES DOCUMENTATION
                    FAX: (917) 322-7201 PHONE: (212) 407-7322

SWISS RE FINANCIAL PRODUCTS CORPORATION

By:
    ---------------------------------
    Authorized Signatory

Accepted and confirmed as of the Trade Date written above:

U.S. Bank National Association, in its capacity as Supplemental Interest Trust
Ttrustee for the Supplemental Interest Trust with respect to the Speciality
Underwriting and Residential Finance Trust, Mortgage Loan Asset-Backed
Certificates, Series 2007-BC1

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

                                      U-1-3

<PAGE>

SCHEDULE A to the Confirmation dated as of January 24, 2007,

Re: Reference Number 1234415

AMORTIZATION SCHEDULE, Floating Rate Payer Period End Dates shall be subject to
adjustment in accordance with the Following Business Day Convention, however,
Fixed Rate Payer Period End Dates will use No Adjustment.

<TABLE>
<CAPTION>
                                             NOTIONAL
FROM AND INCLUDING    TO BUT EXCLUDING     AMOUNT (USD)
------------------   ------------------   --------------
<S>                  <C>                  <C>
July 25, 2007        August 25, 2007      681,867,443.00
August 25, 2007      September 25, 2007   660,419,767.00
September 25, 2007   October 25, 2007     634,281,605.00
October 25, 2007     November 25, 2007    605,641,811.00
November 25, 2007    December 25, 2007    578,828,069.00
December 25, 2007    January 25, 2008     554,711,312.00
January 25, 2008     February 25, 2008    532,884,876.00
February 25, 2008    March 25, 2008       512,832,596.00
March 25, 2008       April 25, 2008       494,192,824.00
April 25, 2008       May 25, 2008         476,621,023.00
May 25, 2008         June 25, 2008        460,158,624.00
June 25, 2008        July 25, 2008        444,634,666.00
July 25, 2008        August 25, 2008      430,134,040.00
August 25, 2008      September 25, 2008   415,417,193.00
September 25, 2008   October 25, 2008     388,086,930.00
October 25, 2008     November 25, 2008    337,724,719.00
November 25, 2008    December 25, 2008    298,526,021.00
December 25, 2008    January 25, 2009     272,883,500.00
January 25, 2009     February 25, 2009    253,915,404.00
February 25, 2009    March 25, 2009       238,571,915.00
March 25, 2009       April 25, 2009       225,950,342.00
April 25, 2009       May 25, 2009         214,223,828.00
May 25, 2009         June 25, 2009        203,243,426.00
June 25, 2009        July 25, 2009        193,174,842.00
July 25, 2009        August 25, 2009      183,950,810.00
August 25, 2009      September 25, 2009   174,680,910.00
September 25, 2009   October 25, 2009     161,696,817.00
October 25, 2009     November 25, 2009    161,696,817.00
November 25, 2009    December 25, 2009    149,742,344.00
December 25, 2009    January 25, 2010     138,643,084.00
January 25, 2010     February 25, 2010    130,115,872.00
February 25, 2010    March 25, 2010       122,875,950.00
March 25, 2010       April 25, 2010       116,459,536.00
April 25, 2010       May 25, 2010         110,482,754.00
May 25, 2010         June 25, 2010        105,084,640.00
June 25, 2010        July 25, 2010        100,226,338.00
July 25, 2010        August 25, 2010       95,795,370.00
August 25, 2010      September 25, 2010    91,649,439.00
September 25, 2010   October 25, 2010      87,657,408.00
October 25, 2010     November 25, 2010     83,855,161.00
</TABLE>

                                      U-1-4

<PAGE>

<TABLE>
<CAPTION>
                                             NOTIONAL
FROM AND INCLUDING    TO BUT EXCLUDING     AMOUNT (USD)
------------------   ------------------   --------------
<S>                  <C>                  <C>
November 25, 2010    December 25, 2010     80,278,539.00
December 25, 2010    January 25, 2011      77,040,196.00
</TABLE>

                                      U-1-5

<PAGE>

                                   EXHIBIT U-2

                 FORM OF CREDIT SUPPORT ANNEX FOR SWAP AGREEMENT

                             ELECTIONS AND VARIABLES
                      TO THE 1994 ISDA CREDIT SUPPORT ANNEX

                                   DATED AS OF

                                January 24, 2007

                                     BETWEEN

<TABLE>
<CAPTION>
COUNTERPARTY                                        SUPPLEMENT INTEREST TRUST
------------                                    --------------------------------
<S>                                       <C>   <C>
Swiss Re Financial Products Corporation   and   U.S. Bank National Association,
("Party A")                                     as Supplemental Interest Trust
                                                Trustee, on behalf of the
                                                Supplemental Interest Trust
                                                relating to the Specialty
                                                Underwriting and Residential
                                                Finance Trust, Series 2007-BC1,
                                                Mortgage Loan Asset-Backed
                                                Certificates, Series 2007-BC1
                                                ("Party B")
</TABLE>

PARAGRAPH 13.

     III. SECURITY INTEREST FOR "OBLIGATIONS".

     The term "OBLIGATIONS" as used in this Annex includes the following
additional obligations: None.

     IV.  CREDIT SUPPORT OBLIGATIONS.

          A.   Delivery Amount, Return Amount and Credit Support Amount.

               1.   "DELIVERY AMOUNT" has the meaning specified in Paragraph
                    3(a), except that the words "upon a demand made by the
                    Secured Party on or promptly following a Valuation Date"
                    shall be deleted and replaced by the words "on each
                    Valuation Date;" provided, that the Delivery Amount shall be
                    calculated, with respect to collateral posting required by
                    each Rating Agency, by using (i) such Rating Agency's
                    Valuation Percentages as provided below to determine Value
                    and (ii) the Credit Support Amount related to such Rating
                    Agency. The Delivery Amount shall be the greatest of such
                    calculated amounts.

               2.   "RETURN AMOUNT" has the meaning specified in Paragraph 3(b);
                    provided, that the Return Amount shall be calculated, with
                    respect to collateral posting

                                      U-2-1

<PAGE>

                    required by each Rating Agency, by using (i) such Rating
                    Agency's Valuation Percentages as provided below to
                    determine Value and (ii) the Credit Support Amount related
                    to such Rating Agency. The Return Amount shall be the least
                    of such calculated amounts.

               3.   "CREDIT SUPPORT AMOUNT" has the meaning specified in
                    Paragraph 13(j)(iv).

          B.   ELIGIBLE CREDIT SUPPORT. The following Valuation Percentages
               shall apply to Eligible Collateral with respect to Party A;
               provided, however, that all Eligible Collateral shall be
               denominated in United States Dollars.(1)

<TABLE>
<CAPTION>
                                                                                                  Moody's
                                                                                   Moody's        Second
                                                                      Fitch     First Trigger     Trigger
                                                   S&P Valuation    Valuation     Valuation      Valuation
Collateral                                           Percentage    Percentage     Percentage    Percentage
----------                                         -------------   ----------   -------------   ----------
<S>                                                <C>             <C>          <C>             <C>
Cash                                                    100%           100%          100%          100%

Fixed-rate negotiable debt obligations issued by
the U.S. Treasury Department having a remaining
maturity on such date of not more than one year        98.5%          97.5%          100%          100%

Fixed-rate negotiable debt obligations issued by
the U.S. Treasury Department having a remaining
maturity on such date of more than one year but
not more than ten years                                89.9%          86.3%          100%           94%

Fixed-rate negotiable debt obligations issued by
the U.S. Treasury Department having a remaining
maturity on such date of more than ten years           83.9%          86.7%          100%           87%

Floating-rate negotiable debt obligations issued
by the U.S. Treasury Department having a
remaining maturity on such date of more than ten
years                                                    (3)            (2)          100%           99%

Fixed-rate U.S. Agency Debentures having a
remaining maturity on such date of not more than
one year                                               98.0%            (2)          100%           99%

Fixed-rate U.S. Agency Debentures having a
remaining maturity on such date of more than one
year but not more than ten years                       86.9%            (2)          100%           93%
</TABLE>

                                      U-2-2

<PAGE>

<TABLE>
<S>                                                <C>             <C>          <C>             <C>
Fixed-rate U.S. Agency Debentures having a
remaining maturity on such date of more than ten
years                                                  77.9%            (2)          100%           86%

Floating-rate U.S. Agency Debentures having a
remaining maturity on such date of more than one
year but not more than ten years                         (3)            (2)          100%           98%
</TABLE>

(1)  With respect to collateral types not listed below, such assets will be
     subject to review by each of S&P, Fitch and Moody's.

(2)  Subject to review by Fitch.

(3)  Subject to review by S&P.

          C.   THRESHOLDS.

               1.   "INDEPENDENT AMOUNT" means with respect to Party A: Zero

                    "INDEPENDENT AMOUNT" means with respect to Party B: Zero

               2.   "THRESHOLD" means with respect to Party A: infinity;
                    provided that the Threshold with respect to Party A shall be
                    zero for so long as no Relevant Entity has the First Trigger
                    Required Ratings or a Collateralization Event is occurring
                    and (i) no Relevant Entity has had the First Trigger
                    Required Ratings since this Annex was executed, or (ii) at
                    least 30 Local Business Days have elapsed since the last
                    time a Relevant Entity had the First Trigger Required
                    Ratings, or (iii) no Relevant Entity has met the Hedge
                    Counterparty Ratings Requirement since this Annex was
                    executed, or (iv) at least 30 calendar days have elapsed
                    since the last time a Collateralization Event occurred or
                    (v) a Ratings Event is occurring.

                    "THRESHOLD" means with respect to Party B: infinity.

               3.   "MINIMUM TRANSFER AMOUNT" means with respect to Party A: USD
                    $100,000; provided, however, that if S&P is rating the
                    Certificates and the aggregate Certificate Principal
                    Balances of the rated Certificates falls below $50,000,000,
                    then the Minimum Transfer Amount shall mean USD $50,000.

               4.   "MINIMUM TRANSFER AMOUNT" means with respect to Party B: USD
                    $100,000 (or if the Posted Collateral is less than $100,000,
                    the aggregate Value of Posted Collateral), provided,
                    however, that if S&P is rating the Certificates and the
                    aggregate Certificate Principal Balances of the rated
                    Certificates falls below $50,000,000, then the Minimum
                    Transfer Amount shall mean USD $50,000 (or if the Posted
                    Collateral is less than $50,000, the aggregate Value of
                    Posted Collateral).

               5.   ROUNDING. The Delivery Amount will be rounded up to the
                    nearest integral multiple of USD $10,000; provided, however,
                    that if S&P is rating the Certificates, the Delivery Amount
                    will be rounded up to the nearest

                                      U-2-3

<PAGE>

                    integral multiple of $1,000. The Return Amount will be
                    rounded down to the nearest integral multiple of USD
                    $10,000; provided, however, that if S&P is rating the
                    Certificates, the Return Amount will be rounded down to the
                    nearest integral multiple of $1,000.

          D.   "EXPOSURE" has the meaning specified in Paragraph 12, except that
               (1) after the word "Agreement" the words "(assuming, for this
               purpose only, that Part 5(q) of the Schedule is deleted)" shall
               be inserted and (2) at the end of such definition, the words
               "with terms substantially the same as those of this Agreement."

     V.   VALUATION AND TIMING.

          A.   "VALUATION AGENT" means Party A in all circumstances.

          B.   "VALUATION DATE" means the first Local Business Day in each week.

          C.   "VALUATION TIME" means the close of business in the city of the
               Valuation Agent on the Local Business Day immediately preceding
               the Valuation Date or date of calculation, as applicable,
               provided that the calculations of Value and Credit Support Amount
               will, as far as practicable, be made as of approximately the same
               time on the same date.

          D.   "NOTIFICATION TIME" means 10:00 a.m., New York time, on a Local
               Business Day.

     VI.  CONDITIONS PRECEDENT AND SECURED PARTY'S RIGHTS AND REMEDIES. None.

     VII. SUBSTITUTION.

          A.   "SUBSTITUTION DATE" has the meaning specified in Paragraph
               4(d)(ii).

          B.   CONSENT. If specified here as applicable, then the Pledgor must
               obtain the Secured Party's consent for any substitution pursuant
               to Paragraph 4(d): Inapplicable.

     VIII. DISPUTE RESOLUTION.

          A.   "RESOLUTION TIME" means 1:00 p.m., New York time on the Local
               Business Day following the date on which the notice is given that
               gives rise to a dispute under Paragraph 5.

          B.   VALUE. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value
               of Eligible Credit Support or Posted Credit Support as of the
               relevant Valuation Date or date of Transfer will be calculated as
               follows:

               1.   with respect to any Eligible Credit Support or Posted Credit
                    Support comprising securities ("Securities") the sum of
                    (a)(x) the last bid price on such date for such Securities
                    on the principal national securities exchange on which such
                    Securities are listed, multiplied by the applicable
                    Valuation Percentage; or (y) where any Securities are not
                    listed on a national securities exchange, the bid price for
                    such Securities quoted as at the close of business on such
                    date by any principal market

                                      U-2-4

<PAGE>

                    maker (which shall not be and shall be independent from the
                    Valuation Agent) for such Securities chosen by the Valuation
                    Agent, multiplied by the applicable Valuation Percentage; or
                    (z) if no such bid price is listed or quoted for such date,
                    the last bid price listed or quoted (as the case may be), as
                    of the day next preceding such date on which such prices
                    were available, multiplied by the applicable Valuation
                    Percentage; plus (b) the accrued interest where applicable
                    on such Securities (except to the extent that such interest
                    shall have been paid to the Pledgor pursuant to Paragraph
                    5(c)(ii) or included in the applicable price) as of such
                    date; and

               2.   with respect to any Cash, the face amount thereof.

          C.   ALTERNATIVE. The provisions of Paragraph 5 will apply.

     IX.  HOLDING AND USING POSTED COLLATERAL.

          A.   ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS:

               A Custodian will be entitled to hold Posted Collateral on behalf
               of Party B pursuant to Paragraph 6(b); provided that:

                    a. Posted Collateral may be held only in the following
               jurisdiction: United States.

                    b. The Custodian for Party B (A) is a commercial bank or
               trust company which is unaffiliated with Party B and organized
               under the laws of the United States or state thereof, having
               assets of at least $500 million and a long term debt or a deposit
               rating of at least (i) Baa2 from Moody's and (ii) A-1 from S&P,
               or is the Supplemental Interest Trust Trustee, and a short term
               rating from Fitch of at least "F1" and (B) shall hold all
               Eligible Credit Support in an Eligible Account segregated from
               the Swap Account and the Interest Rate Cap Account, as defined in
               the related Pooling and Servicing Agreement.

                    Initially, the Custodian for Cash and Securities for Party B
               is: The Supplemental Interest Trust Trustee under the Pooling and
               Servicing Agreement, or any successor trustee thereto.

          B.   USE OF POSTED COLLATERAL. The provisions of Paragraph 6(c)(i)
               will not apply to Party B, but the provisions of Paragraph
               6(c)(ii) will apply to Party B.

          C.   NOTICE. If a party or its Custodian fails to meet the criteria
               for eligibility to hold (or, in the case of a party, to use)
               Posted Collateral set forth in this Paragraph 13(g), such party
               shall promptly notify the other party of such ineligibility.

     X.   DISTRIBUTIONS AND INTEREST AMOUNT.

          A.   INTEREST RATE. The "INTEREST RATE" will be the federal funds
               overnight rate as published by the Board of Governors of the
               Federal Reserve System in H.15 (519) or its

                                      U-2-5

<PAGE>

               successor publication, or such other rate as the parties may
               agree from time to time.

          B.   TRANSFER OF INTEREST AMOUNT. The transfer of the Interest Amount
               will be made on the second Local Business Day following the end
               of each calendar month and on any other Local Business Day on
               which Posted Collateral in the form of Cash is transferred to the
               Pledgor pursuant to Paragraph 3(b), in each case to the extent
               that a Delivery Amount would not be created or increased by that
               transfer, provided that Party B shall not be obliged to so
               transfer any Interest Amount unless and until it has earned and
               received such interest.

          C.   ALTERNATIVE TO INTEREST AMOUNT. The provisions of Paragraph
               6(d)(ii) will apply.

     XI.  ADDRESS FOR TRANSFERS.

          Party A: To be notified to Party B by Party A at the time of the
          request for the transfer.

          Party B: To be notified to Party A by Party B upon request by Party A.

     XII. OTHER PROVISIONS.

          A.   EVENTS OF DEFAULT.

               Subclause (iii) shall be deleted from Paragraph 7.

          B.   COSTS OF TRANSFER ON EXCHANGE.

               Notwithstanding Paragraph 10, the Pledgor will be responsible
               for, and will reimburse the Secured Party for, all transfer and
               other taxes and other costs involved in the transfer of Eligible
               Credit Support either from the Pledgor to the Secured Party or
               from the Secured Party to the Pledgor.

          C.   CUMULATIVE RIGHTS.

               The rights, powers and remedies of the Secured Party under this
               Annex shall be in addition to all rights, powers and remedies
               given to the Secured Party by the Agreement or by virtue of any
               statute or rule of law, all of which rights, powers and remedies
               shall be cumulative and may be exercised successively or
               concurrently without impairing the rights of the Secured Party in
               the Posted Credit Support created pursuant to this Annex.

          D.   RATINGS CRITERIA.

               "CREDIT SUPPORT AMOUNT" shall be the greater of (a) the S&P
               Credit Support Amount, (b) the Fitch Credit Support Amount, and
               (c) the Moody's First Trigger Credit Support Amount, or the
               Moody's Second Trigger Credit Support Amount, as applicable.

          With respect to Fitch:

                                      U-2-6
<PAGE>

          "FITCH CREDIT SUPPORT AMOUNT" means, for any Valuation Date, the
          excess, if any, of:

          (I)  (A)  for any Valuation Date (x) on which a Collateralization
                    Event with respect to Fitch has occurred and been continuing
                    for at least 30 calendar days or (y) on which a Ratings
                    Event with respect to Fitch has occurred and is continuing,
                    an amount equal to the sum of (1) the aggregate Secured
                    Party's Exposure for such Valuation Date with respect to all
                    Transactions and (2) the aggregate of the products of the
                    Volatility Buffer for each Transaction and the Notional
                    Amount of each Transaction for the Calculation Period of
                    each such Transaction which includes such Valuation Date, or

               (B)  for any other Valuation Date, zero, over

          (II) the Threshold for Party A for such Valuation Date.

          "VOLATILITY BUFFER" shall mean the percentage set forth in the
          following table with respect to any Transaction (other than a
          Transaction identified in the related Confirmation as a Timing Hedge):

<TABLE>
<CAPTION>
                                             WEIGHTED AVERAGE LIFE (YEARS)
                ----------------------------------------------------------------------------------------
NOTES' RATING    1     2     3     4     5     6     7     8     9     10    11    12    13    14   >=15
-------------   ---   ---   ---   ---   ---   ---   ---   ---   ---   ---   ---   ---   ---   ---   ----
<S>             <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
USD INTEREST RATE SWAPS
AA- or Better   0.8   1.7   2.5   3.3   4.0   4.7   5.3   5.9   6.5   7.0   7.5   8.0   8.5   9.0    9.5
A+/A            0.6   1.2   1.8   2.3   2.8   3.3   3.8   4.2   4.6   5.0   5.3   5.7   6.0   6.4    6.7
A-/BBB+         0.5   1.0   1.6   2.0   2.5   2.9   3.3   3.6   4.0   4.3   4.7   5.0   5.3   5.6    5.9
</TABLE>

     With respect to Moody's:

          "MOODY'S FIRST TRIGGER CREDIT SUPPORT AMOUNT" means, for any Valuation
          Date, the excess, if any, of

          (1)  (A)  for any Valuation Date on which (I) a First Trigger Failure
                    Condition has occurred and has been continuing (x) for at
                    least 30 Local Business Days or (y) since this Annex was
                    executed and (II) it is not the case that a Moody's Second
                    Trigger Event has occurred and been continuing for at least
                    30 Local Business Days, an amount equal to the greater of
                    (a) zero and (b) the sum of the Secured Party's aggregate
                    Exposure for all Transactions and the aggregate of Moody's
                    Additional Collateralized Amounts for each Transaction.

                    For the purposes of this definition, the "MOODY'S ADDITIONAL
                    COLLATERALIZED AMOUNT" with respect to any Transaction shall
                    mean:

                                     U-2-7

<PAGE>

                    the least of (x) the product of the Moody's First Trigger
                    DV01 Multiplier and DV01 for such Transaction and such
                    Valuation Date (y) the product of Moody's First Trigger
                    Notional Amount Multiplier and the Notional Amount for such
                    Transaction for the Calculation Period which includes such
                    Valuation Date; and (z) the product of the applicable
                    Moody's First Trigger Factor set forth in Table 1 and the
                    Notional Amount for such Transaction for the Calculation
                    Period which includes such Valuation Date; or

               (B)  for any other Valuation Date, zero, over

          (2)  the Threshold for Party A such Valuation Date.

          "FIRST TRIGGER FAILURE CONDITION" means that no Relevant Entity has
          credit ratings from Moody's at least equal to the Moody's First
          Trigger Required Ratings.

          "DV01" means, with respect to a Transaction and any date of
          determination, the sum of the estimated change in the Secured Party's
          Exposure with respect to such Transaction that would result from a one
          basis point change in the relevant swap curve on such date, as
          determined by the Valuation Agent in good faith and in a commercially
          reasonable manner. The Valuation Agent shall, upon request of Party B,
          provide to Party B a statement showing in reasonable detail such
          calculation.

          "MOODY'S FIRST TRIGGER DV01 MULTIPLIER" means (A) if each Local
          Business Day is a Valuation Date, 15, or (B) otherwise, 25.

          "MOODY'S FIRST TRIGGER VALUE" means, on any date and with respect to
          any Eligible Collateral other than Cash, the bid price obtained by the
          Valuation Agent multiplied by the Moody's First Trigger Valuation
          Percentage for such Eligible Collateral set forth in Paragraph
          13(b)(ii).

          "MOODY'S FIRST TRIGGER NOTIONAL AMOUNT MULTIPLIER" means (A) if each
          Local Business Day is a Valuation Date, 2%, or (B) otherwise, 4%.

          "MOODY'S SECOND TRIGGER CREDIT SUPPORT AMOUNT" means, for any
          Valuation Date, the excess, if any, of

          (3)  (A)  for any Valuation Date on which it is the case that a Second
                    Trigger Failure Condition has occurred and been continuing
                    for at least 30 Local Business Days, an amount equal to the
                    greatest of (a) zero, (b) the aggregate amount of the next
                    payments due to be paid by Party A under each Transaction
                    and (c) the sum of the Secured Party's aggregate Exposure
                    and the aggregate of Moody's Additional Collateralized
                    Amounts for each Transaction.

                    For the purposes of this definition, the "MOODY'S ADDITIONAL
                    COLLATERALIZED AMOUNT" with respect to any Transaction shall
                    mean:

                                      U-2-8

<PAGE>

                    if such Transaction is not a Transaction-Specific Hedge,

                    the least of (i) the product of the Moody's Second Trigger
                    DV01 Multiplier and DV01 for such Transaction and such
                    Valuation Date, (ii) the product of the Moody's Second
                    Trigger Notional Amount Multiplier and the Notional Amount
                    for such Transaction for the Calculation Period which
                    includes such Valuation Date, and (iii) the product of the
                    applicable Moody's Second Trigger Factor set forth in Table
                    2 and the Notional Amount for such Transaction for the
                    Calculation Period which includes such Valuation Date; or

                    if such Transaction is a Transaction-Specific Hedge,

                    the least of (i) the product of the Moody's Second Trigger
                    Transaction-Specific Hedge DV01 Multiplier and DV01 for such
                    Transaction and such Valuation Date, (ii) the product of the
                    Moody's Second Trigger Transaction-Specific Hedge Notional
                    Amount Multiplier and the Notional Amount for such
                    Transaction for the Calculation Period which includes such
                    Valuation Date, and (iii) the product of the applicable
                    Moody's Second Trigger Factor set forth in Table 3 and the
                    Notional Amount for such Transaction for the Calculation
                    Period which includes such Valuation Date; or

               (B)  for any other Valuation Date, zero, over

          (4)  the Threshold for Party A for such Valuation Date.

          "TRANSACTION-SPECIFIC HEDGE" means any Transaction that is an interest
          rate cap, interest rate floor or interest rate swaption, or an
          interest rate swap if (x) the notional amount of the interest rate
          swap is "balance guaranteed" or (y) the notional amount of the
          interest rate swap for any Calculation Period otherwise is not a
          specific dollar amount that is fixed at the inception of the
          Transaction.

          "SECOND TRIGGER FAILURE CONDITION" means that no Relevant Entity has
          credit ratings from Moody's at least equal to the Moody's Second
          Trigger Ratings Threshold.

          "MOODY'S SECOND TRIGGER DV01 MULTIPLIER" means (A) if each Local
          Business Day is a Valuation Date, 50, or (B) otherwise, 60.

          "MOODY'S SECOND TRIGGER TRANSACTION-SPECIFIC HEDGE DV01 MULTIPLIER"
          means (A) if each Local Business Day is a Valuation Date, 65, or (B)
          otherwise, 75.

          "MOODY'S SECOND TRIGGER TRANSACTION-SPECIFIC HEDGE NOTIONAL AMOUNT
          MULTIPLIER" means (A) if each Local Business Day is a Valuation Date,
          10%, or (B) otherwise, 11%.

                                     U-2-9

<PAGE>

          "MOODY'S SECOND TRIGGER VALUE" means, on any date and with respect to
          any Eligible Collateral other than Cash, the bid price obtained by the
          Valuation Agent multiplied by the Moody's Second Trigger Valuation
          Percentage for such Eligible Collateral set forth in Paragraph
          13(b)(ii).

          "MOODY'S SECOND TRIGGER NOTIONAL AMOUNT MULTIPLIER" means (A) if each
          Local Business Day is a Valuation Date, 8% or (B) otherwise, 9%.

     With respect to S&P:

          "S&P CREDIT SUPPORT AMOUNT" means, for any Valuation Date, the excess,
          if any, of:

          (I)  (A)  for any Valuation Date (x) on which a Collateralization
                    Event with respect to S&P has occurred and been continuing
                    for at least 30 calendar days or (y) on which a Ratings
                    Event with respect to S&P has occurred and is continuing, an
                    amount equal to the sum of (1) the aggregate Secured Party's
                    Exposure for such Valuation Date with respect to all
                    Transactions and (2) the aggregate of the products of the
                    Volatility Buffer for each Transaction and the Notional
                    Amount of each Transaction for the Calculation Period of
                    each such Transaction which includes such Valuation Date, or

               (B)  for any other Valuation Date, zero, over

          (II) the Threshold for Party A for such Valuation Date.

          "VOLATILITY BUFFER" shall mean the percentage set forth in the
          following table with respect to any Transaction (other than a
          Transaction identified in the related Confirmation as a Timing Hedge):

<TABLE>
<CAPTION>
     Short-term           Remaining          Remaining          Remaining          Remaining
   credit rating      Weighted Average   Weighted Average   Weighted Average   Weighted Average
of Party A's Credit   Life Maturity up   Life Maturity up   Life Maturity up   Life Maturity up
  Support Provider       to 3 years         to 5 years         to 10 years        to 30 years
-------------------   ----------------   ----------------   ----------------   ----------------
<S>                   <C>                <C>                <C>                <C>
At least "A-2"              2.75               3.25               4.00               4.75
"A-3"                       3.25               4.00               5.00               6.25
"BB+" or lower              3.50               4.50               6.75               7.50
</TABLE>

     E.   DEMANDS AND NOTICES.

          All demands, specifications and notices under this Annex will be made
          pursuant to the Notices Section of this Agreement, save that any
          demand, specification or notice:

          1.   shall be given to or made at the following addresses:

               If to Party A:

                                     U-2-10

<PAGE>

                    As set forth in Part 4(a) of the Schedule.

               If to Party B:

                    As set forth in Part 4(a) of the Schedule.

               or at such other address as the relevant party may from time to
               time designate by giving notice (in accordance with the terms of
               this subparagraph) to the other party;

          2.   shall be deemed to be effective at the time such notice is
               actually received unless such notice is received on a day which
               is not a Local Business Day or after the Notification Time on any
               Local Business Day in which event such notice shall be deemed to
               be effective on the next succeeding Local Business Day.

          Pursuant to the Section 4.05 of the Pooling and Servicing Agreement,
          the monthly report to Certificateholders shall be made available to
          Party A in the manner and form specified therein.

     F.   AGREEMENT AS TO SINGLE SECURED PARTY AND PLEDGOR

          Party A and Party B agree that, notwithstanding anything to the
          contrary in the first sentence of this Annex, Paragraph 1(b) or
          Paragraph 2 or the definitions in Paragraph 12, except with respect to
          Party B's obligations under Paragraph 3(b), (a) the term "Secured
          Party" as used in this Annex means only Party B, (b) the term
          "Pledgor" as used in this Annex means only Party A, (c) only Party A
          makes the pledge and grant in Paragraph 2, the acknowledgement in the
          final sentence of Paragraph 8(a) and the representations in Paragraph
          9 and (d) only Party A will be required to make Transfers of Eligible
          Credit Support hereunder. Party A and Party B further agree that,
          notwithstanding anything to the contrary in the recital to this Annex
          or Paragraph 7, this Annex will constitute a Credit Support Document
          only with respect to Party A.

     G.   SUPPLEMENTAL INTEREST TRUST TRUSTEE CAPACITY.

          It is expressly understood and agreed by the parties hereto that (i)
          this Annex is executed and delivered by the Supplemental Interest
          Trust Trustee not individually or personally but solely as
          Supplemental Interest Trust Trustee on behalf of the Supplemental
          Interest Trust, in the exercise of the powers and authority conferred
          and vested in it under the Pooling and Servicing Agreement, (ii) each
          of the representations, undertakings and agreements herein made on the
          part of the Trust is made and intended not as personal
          representations, undertakings and agreements by the Supplemental
          Interest Trust Trustee but is made and intended for the purpose of
          binding only the Trust, (iii) nothing herein contained shall be
          construed as creating any liability on the part of the Supplemental
          Interest Trust Trustee, individually or personally, to perform any
          covenant either expressed or implied contained herein, all such
          liability, if any, being expressly waived by the parties hereto and by
          any Person claiming by, through or under the parties hereto and (iv)
          under no circumstances shall the Supplemental Interest Trust Trustee
          be personally liable for the payment of any indebtedness or expenses
          of the Trust or be liable for the breach or failure of any

                                     U-2-11

<PAGE>

          obligation, representation, warranty or covenant made or undertaken by
          the Trust under this Annex or any other related documents as to all of
          which recourse shall be had solely to the assets of the Trust in
          accordance with the terms of the Pooling and Servicing Agreement.

     H.   EXTERNAL MARKS.

          At such time as the long-term senior debt rating of Party A's Credit
          Support Provider is BBB or lower from S&P, Party A in its capacity as
          Valuation Agent shall get external verification of its calculation of
          Exposure on a monthly basis. This verification shall be at Party A's
          expense and may not be verified by the same entity more than four (4)
          times in any twelve (12)-month period. The external mark should
          reflect the higher of two (2) bids from counterparties that would be
          willing and eligible to provide the swap in the absence of the current
          provider. Such bids and any external marks received by the Valuation
          Agent shall be provided to S&P. The calculation of Exposure should be
          based on the greater of the internal and external marks.

                            [SIGNATURE PAGE FOLLOWS]

                                     U-2-12

<PAGE>

IN WITNESS WHEREOF, the parties have executed this document by their duly
authorized officers with effect from the date specified on the first page
hereof.

SWISS RE FINANCIAL PRODUCTS             U.S. BANK NATIONAL ASSOCIATION, AS
CORPORATION                             SUPPLEMENTAL INTEREST TRUST TRUSTEE, ON
                                        BEHALF OF THE SUPPLEMENTAL INTEREST
                                        TRUST RELATING TO THE SPECIALTY
                                        UNDERWRITING AND RESIDENTIAL FINANCE
                                        TRUST, SERIES 2007-BC1, MORTGAGE LOAN
                                        ASSET-BACKED CERTIFICATES, SERIES
                                        2007-BC1

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

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

                                     U-2-13

<PAGE>

TABLE 1

                          MOODY'S FIRST TRIGGER FACTOR

<TABLE>
<CAPTION>
                                      WEEKLY
REMAINING WEIGHTED                  COLLATERAL
AVERAGE LIFE OF HEDGE IN YEARS        POSTING
------------------------------      ----------
<S>                                 <C>
1 or less                              0.25%
More than 1 but not more than 2        0.50%
More than 2 but not more than 3        0.70%
More than 3 but not more than 4        1.00%
More than 4 but not more than 5        1.20%
More than 5 but not more than 6        1.40%
More than 6 but not more than 7        1.60%
More than 7 but not more than 8        1.80%
More than 8 but not more than 9        2.00%
More than 9 but not more than 10       2.20%
More than 10 but not more than 11      2.30%
More than 11 but not more than 12      2.50%
More than 12 but not more than 13      2.70%
More than 13 but not more than 14      2.80%
More than 14 but not more than 15      3.00%
More than 15 but not more than 16      3.20%
More than 16 but not more than 17      3.30%
More than 17 but not more than 18      3.50%
More than 18 but not more than 19      3.60%
More than 19 but not more than 20      3.70%
</TABLE>

                                     U-2-14

<PAGE>

<TABLE>
<S>                                 <C>
More than 20 but not more than 21      3.90%
More than 21 but not more than 22      4.00%
More than 22 but not more than 23      4.00%
More than 23 but not more than 24      4.00%
More than 24 but not more than 25      4.00%
More than 25 but not more than 26      4.00%
More than 26 but not more than 27      4.00%
More than 27 but not more than 28      4.00%
More than 28 but not more than 29      4.00%
More than 29                           4.00%
</TABLE>

                                     U-2-15

<PAGE>

TABLE 2

Moody's Second Trigger Factor for Interest Rate Swaps with Fixed Notional
Amounts

<TABLE>
<CAPTION>
                                      WEEKLY
REMAINING WEIGHTED                  COLLATERAL
AVERAGE LIFE OF HEDGE IN YEARS        POSTING
------------------------------      ----------
<S>                                 <C>
1 or less                              0.60%
More than 1 but not more than 2        1.20%
More than 2 but not more than 3        1.70%
More than 3 but not more than 4        2.30%
More than 4 but not more than 5        2.80%
More than 5 but not more than 6        3.30%
More than 6 but not more than 7        3.80%
More than 7 but not more than 8        4.30%
More than 8 but not more than 9        4.80%
More than 9 but not more than 10       5.30%
More than 10 but not more than 11      5.60%
More than 11 but not more than 12      6.00%
More than 12 but not more than 13      6.40%
More than 13 but not more than 14      6.80%
More than 14 but not more than 15      7.20%
More than 15 but not more than 16      7.60%
More than 16 but not more than 17      7.90%
More than 17 but not more than 18      8.30%
More than 18 but not more than 19      8.60%
More than 19 but not more than 20      9.00%
</TABLE>

                                     U-2-16

<PAGE>

<TABLE>
<S>                                 <C>
More than 20 but not more than 21      9.00%
More than 21 but not more than 22      9.00%
More than 22 but not more than 23      9.00%
More than 23 but not more than 24      9.00%
More than 24 but not more than 25      9.00%
More than 25 but not more than 26      9.00%
More than 26 but not more than 27      9.00%
More than 27 but not more than 28      9.00%
More than 28 but not more than 29      9.00%
More than 29                           9.00%
</TABLE>

                                     U-2-17

<PAGE>

TABLE 3

          MOODY'S SECOND TRIGGER FACTOR FOR TRANSACTION-SPECIFIC HEDGES

<TABLE>
<CAPTION>
                                      WEEKLY
REMAINING WEIGHTED                  COLLATERAL
AVERAGE LIFE OF HEDGE IN YEARS        POSTING
------------------------------      ----------
<S>                                 <C>
1 or less                              0.75%
More than 1 but not more than 2        1.50%
More than 2 but not more than 3        2.20%
More than 3 but not more than 4        2.90%
More than 4 but not more than 5        3.60%
More than 5 but not more than 6        4.20%
More than 6 but not more than 7        4.80%
More than 7 but not more than 8        5.40%
More than 8 but not more than 9        6.00%
More than 9 but not more than 10       6.60%
More than 10 but not more than 11      7.00%
More than 11 but not more than 12      7.50%
More than 12 but not more than 13      8.00%
More than 13 but not more than 14      8.50%
More than 14 but not more than 15      9.00%
More than 15 but not more than 16      9.50%
More than 16 but not more than 17      9.90%
More than 17 but not more than 18     10.40%
More than 18 but not more than 19     10.80%
More than 19 but not more than 20     11.00%
</TABLE>

                                     U-2-18

<PAGE>

<TABLE>
<S>                                 <C>
More than 20 but not more than 21     11.00%
More than 21 but not more than 22     11.00%
More than 22 but not more than 23     11.00%
More than 23 but not more than 24     11.00%
More than 24 but not more than 25     11.00%
More than 25 but not more than 26     11.00%
More than 26 but not more than 27     11.00%
More than 27 but not more than 28     11.00%
More than 28 but not more than 29     11.00%
More than 29                          11.00%
</TABLE>

                                     U-2-19

<PAGE>

                                   SCHEDULE V

<TABLE>
<CAPTION>
            Item on Form 8-K                         Party Responsible
            ----------------                         -----------------
<S>                                        <C>
*Item 1.01- Entry into a Material          Each party to such agreement
Definitive Agreement

*Item 1.02- Termination of a Material      Each party to such agreement
Definitive Agreement

Item 1.03- Bankruptcy or Receivership      Depositor

Item 2.04- Triggering Events that          Depositor
Accelerate or Increase a Direct
Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement

*Item 3.03- Material Modification to       Depositor
Rights of Security Holders

Item 5.03- Amendments of Articles of       Depositor
Incorporation or Bylaws; Change of
Fiscal Year

Item 6.01- ABS Informational and           Depositor
Computational Material

*Item 6.02- Change of Servicer or          Servicer (as to Trustee)/Trustee
Trustee                                    (as to Servicer)

*Item 6.03- Change in Credit Enhancement   Depositor/Trustee
or External Support

*Item 6.04- Failure to Make a Required     Trustee
Distribution

Item 6.05- Securities Act Updating         Depositor
Disclosure

Item 7.01- Regulation FD Disclosure        Depositor

Item 8.01                                  Depositor

Item 9.01                                  Depositor
</TABLE>

                                       V-1

<PAGE>

                                   SCHEDULE W

<TABLE>
<CAPTION>
            Item on Form 10-D                        Party Responsible
            -----------------                        -----------------
<S>                                        <C>
Item 1: Distribution and Pool              Trustee, Depositor
Performance Information

Plus any information required by 1121      Servicer and Trustee (to the extent
which is NOT included on the monthly       known and required by Regulation AB)
statement to Certificateholders

Item 2: Legal Proceedings per Item 1117    All parties to the Pooling and
of Regulation AB                           Servicing Agreement (as to
                                           themselves), the
                                           Depositor/Servicer/Trustee (to the
                                           extent known) as to the issuing
                                           entity, the Sponsor, 1106(b)
                                           originator, any 1100(d)(1) party

Item 3: Sale of Securities and Use of      Depositor
Proceeds

Item 4: Defaults Upon Senior Securities    Trustee

Item 5: Submission of Matters to a Vote    Trustee
of Security Holders

Item 6: Significant Obligors of Pool       Depositor/Sponsor/Mortgage Loan
Assets                                     Sponsor/ Servicer

Item 7: Significant Enhancement Provider   Depositor/Sponsor
Information

Item 8: Other Information                  Trustee/Servicer/Depositor (to the
                                           extent known) and any other party
                                           responsible for disclosure items on
                                           Form 8-K

Item 9: Exhibits                           Trustee/Depositor/Servicer to the
                                           extent applicable to each
</TABLE>

                                       W-1

<PAGE>

                                   SCHEDULE X

<TABLE>
<CAPTION>
            Item on Form 10-K                        Party Responsible
            -----------------                        -----------------
<S>                                        <C>
Item 1B: Unresolved Staff Comments         Depositor

*Item 9B: Other Information                Depositor and any other party
                                           responsible for disclosure items on
                                           Form 8-K

*Item 15: Exhibits, Financial Statement    Depositor/Servicer.
Schedules

*Additional Item:                          All parties to the Pooling and
                                           Servicing Agreement (as to
                                           themselves), the

Disclosure per Item 1117 of Regulation     Depositor/Servicer/Trustee (to the
AB                                         extent known) as to the issuing
                                           entity, the Sponsor, 1106(b)
                                           originator, any 1100(d)(1) party

*Additional Item:                          All parties to the Pooling and

Disclosure per Item 1119 of Regulation     Servicing Agreement, the Sponsor,
AB                                         originator, significant obligor,
                                           enhancement or support provider

Additional Item:                           Depositor/Sponsor/Mortgage Loan

Disclosure per Item 1112(b) of             Sponsor/Servicer
Regulation AB

Additional Item:                           Depositor/Sponsor
Disclosure per Items 1114(b) and 1115(b)
of Regulation AB
</TABLE>

                                       X-1EX-10.1

 

CONFORMED VERSION

AGENCY AGREEMENT

DATED 5 OCTOBER 2006

POLO RALPH LAUREN CORPORATION

EUR 300,000,000 4.50 per cent. Notes due 2013

ALLEN & OVERY

Allen & Overy LLP

 

 

CONTENTS

	 	 	 	 	 	 	 
	Clause	 	 	 	Page
	 
	 	 	 	 	 	 
	1.

	 	Interpretation
	 	 	1	 
	2.

	 	Definitions
	 	 	1	 
	3.

	 	Appointment of Agents
	 	 	3	 
	4.

	 	Authentication and Delivery of Notes
	 	 	3	 
	5.

	 	Payment to the Fiscal Agent
	 	 	4	 
	6.

	 	Notification of Non-payment by the Issuer
	 	 	4	 
	7.

	 	Duties of the Registrar and the Paying Agents
	 	 	4	 
	8.

	 	Reimbursement of the Paying Agents
	 	 	5	 
	9.

	 	Notice of any Withholding or Deduction
	 	 	5	 
	10.

	 	Duties of the Registrar
	 	 	5	 
	11.

	 	Duties of the Transfer Agent
	 	 	7	 
	12.

	 	Regulations for Transfer of Registered Notes
	 	 	7	 
	13.

	 	Duties to the Fiscal Agent in connection with Optional Redemption and Redemption for	 	 	 	 
	 

	 	Taxation Reasons
	 	 	7	 
	14.

	 	Receipt and Publication of Notices
	 	 	7	 
	15.

	 	Cancellation of Notes
	 	 	8	 
	16.

	 	Issue of Replacement Certificates
	 	 	8	 
	17.

	 	Records and Certificates
	 	 	9	 
	18.

	 	Copies of this Agreement available for inspection
	 	 	9	 
	19.

	 	Commissions and Expenses
	 	 	9	 
	20.

	 	Indemnity
	 	 	10	 
	21.

	 	Repayment by Fiscal Agent
	 	 	10	 
	22.

	 	Conditions of Appointment
	 	 	10	 
	23.

	 	Communication with Agents
	 	 	11	 
	24.

	 	Termination of Appointment
	 	 	11	 
	25.

	 	Meetings of Noteholders
	 	 	13	 
	26.

	 	Consolidation, Merger or Transfer
	 	 	13	 
	27.

	 	Notices
	 	 	14	 
	28.

	 	Taxes and Stamp Duties
	 	 	14	 
	29.

	 	Counterparts
	 	 	15	 
	30.

	 	Descriptive Headings
	 	 	15	 
	31.

	 	Governing Law and Submission to Jurisdiction
	 	 	15	 
	32.

	 	Amendments
	 	 	16	 
	 
	 	 	 	 	 	 
	Schedule

	 	 	 	Page

	 
	 	 	 	 	 	 
	1.

	 	Form of the Global Certificate
	 	 	17	 
	2.

	 	Form of Certificate and Conditions of the Notes
	 	 	23	 
	 

	 	Part 1       Form of Certificate
	 	 	23	 
	 

	 	Part 2       Conditions of the Notes
	 	 	26	 
	3.

	 	Provisions for Meetings of Noteholders
	 	 	39	 
	4.

	 	Registration and Transfer of Notes
	 	 	48	 
	5.

	 	Form of Put Notice
	 	 	50	 
	Signatories	 	 	51	 

 

 

THIS AGREEMENT is dated 5 October 2006 and made

BETWEEN:

(1) POLO RALPH LAUREN CORPORATION (the Issuer);

(2) DEUTSCHE BANK AG, LONDON BRANCH; and

(3) DEUTSCHE BANK LUXEMBOURG S.A.

WHEREAS:

	(A)	 	The Issuer has agreed to issue EUR 300,000,000 4.50 per cent. Notes due 2013 (the Notes
which expression shall include, unless the context otherwise requires, any further Notes
issued pursuant to Condition 14 and forming a single series with the Notes).

	(B)	 	The Notes will be issued in registered form in the denominations of EUR 50,000 and integral
multiples of EUR 1,000 in excess thereof, without coupons.

	(C)	 	The Notes will initially be represented by a Global Certificate.

	(D)	 	The Global Certificate will be in or substantially in the form set out in Schedule 1 and the
definitive Certificates will be in or substantially in the form set out in Part 1 of Schedule
2. The Conditions of the Notes (the Conditions) will be in or substantially in the form set
out in Part 2 of Schedule 2.

NOW IT IS HEREBY AGREED as follows:

	1.	   	INTERPRETATION

	1.1	 	Words and expressions defined in the Conditions and not otherwise defined in this
Agreement shall have the same meanings when used in this Agreement.

	1.2	 	References in this Agreement to principal and/or interest shall include any additional
amounts payable pursuant to Condition 8.

	2.	   	DEFINITIONS

	2.1	 	As used in this Agreement and in the Conditions:

	 	 	Fiscal Agent, Paying Agents, Registrar, Transfer Agent and Agents mean and include each
Fiscal Agent, Paying Agent, Registrar, Transfer Agent and Agent from time to time appointed
to exercise the powers and undertake the duties conferred and imposed upon it by this
Agreement and notified to the Noteholders under clause 21;

	 	 	Outstanding means in relation to the Notes all the Notes issued other than:

	 	(a)	 	those Notes which have been redeemed and cancelled pursuant to Condition 7 or
otherwise pursuant to the Conditions;

	 	(b)	 	those Notes in respect of which the date for redemption under the Conditions
has occurred and the redemption moneys wherefore (including all interest payable
thereon) have been duly paid to the Fiscal Agent in the manner provided in clause 5

1

 

	 	 	 	(and, where appropriate, notice to that effect has been given to the
Noteholders under Condition 12) and remain available for payment against
presentation of the relevant Notes;
	 
	 	(c)	 	those Notes which have been purchased and cancelled under Condition 7;
	 
	 	(d)	 	those Notes which have become void under Condition 9;
	 
	 	(e)	 	those mutilated or defaced Notes which have been surrendered and cancelled and in
respect of which replacements have been issued pursuant to Condition 11; and
	 
	 	(f)	 	(for the purpose only of ascertaining the principal amount of the Notes
outstanding and without prejudice to the status for any other purpose of the relevant
Notes) those Notes which are alleged to have been lost, stolen or destroyed and in
respect of which replacements have been issued pursuant to Condition 11,

	 	 	provided that for each of the following purposes, namely:

	 	(i)	 	the right to attend and vote at any meeting of the Noteholders or any of them;
and
	 
	 	(ii)	 	the determination of how many and which Notes are for the time being
outstanding for the purposes of paragraphs 4, 7 and 9 of Schedule 3;

	 	 	those Notes (if any) which are for the time being held by any person (including, but not
limited to, the Issuer or any of its Subsidiaries) for the benefit of the Issuer or any of
its Subsidiaries shall (unless and until ceasing to be so held) be deemed not to remain
outstanding; and

	 	 	specified office means the offices specified in clause 27 or any other specified offices as
may from time to time be duly notified pursuant to clause 27.

	2.2	(a)     In this Agreement, unless the contrary intention appears, a reference to:

	 	(i)	 	an amendment includes a supplement, restatement or
novation and amended is to be construed accordingly;
	 
	 	(ii)	 	a person includes any individual, company,
unincorporated association, government, state agency, international
organisation or other entity;
	 
	 	(iii)	 	a provision of a law is a reference to that provision as
extended, amended or re-enacted;
	 
	 	(iv)	 	a clause or schedule is a reference to a clause of, or a
Schedule to, this Agreement;
	 
	 	(v)	 	a person includes its successors and assigns;
	 
	 	(vi)	 	a document is a reference to that document as amended
from time to time; and
	 
	 	(vii)	 	a time of day is a reference to London time;

	 	(b)	The headings in this Agreement do not affect its interpretation;

2

 

	 	(c)	 	All references in this Agreement to costs or charges or expenses shall
include any value added tax or similar tax charged or chargeable in respect
thereof; and

	 	(d)	 	All references in this Agreement to Notes shall, unless the context otherwise
requires, include the Global Certificate and the definitive Certificates.

	3.	 	APPOINTMENT OF AGENTS
	 
	3.1	 	The Issuer appoints, on the terms and subject to the conditions of this Agreement:

	 	(a)	 	Deutsche Bank AG, London Branch as fiscal and principal paying agent (in such
capacity, the Fiscal Agent) and as transfer agent (in such capacity, the Transfer
Agent) in respect of the Notes; and
	 
	 	(b)	 	Deutsche Bank Luxembourg S.A. as paying agent and as registrar (in such
capacity, the Registrar) (together with the Fiscal Agent, the Paying Agents) for the
payment of principal of, and interest on, the Notes;

	 	 	in each case acting at its specified office.

	3.2	 	The Fiscal Agent, the other Paying Agent, the Transfer Agent and the Registrar are together
referred to as the Agents.

	3.3	 	The obligations of the Agents hereunder are several and not joint.

	4.	 	AUTHENTICATION AND DELIVERY OF NOTES

	4.1	 	If the Global Certificate is to be exchanged in accordance with its terms for definitive
Certificates, the Issuer undertakes that it will deliver to, or to the order of, the Fiscal
Agent, as soon as reasonably practicable and in any event not later than 15 days before the
relevant exchange is due to take place, definitive Certificates in an aggregate principal
amount of EUR 300,000,000 or such lesser amount as is the principal amount of Notes
represented by the Global Certificate to be issued in exchange for the Global Certificate.
Each definitive Certificate so delivered shall be duly executed on behalf of the Issuer.

	4.2	 	The Issuer authorises and instructs (a) the Registrar to authenticate the Global Certificate
and (b) the Registrar to authenticate the definitive Certificates delivered pursuant to
subclause 4.1.

	4.3	 	If the Global Certificate becomes exchangeable for definitive Certificates in accordance with
its terms, the Registrar shall authenticate and deliver to each person designated by the
relevant Clearing System a definitive Certificate in accordance with the terms of this
Agreement and the Global Certificate.

	4.4	 	The Fiscal Agent and the Registrar shall cause all Notes delivered to and held by them under
this Agreement to be maintained in safe custody and shall ensure that the definitive
Certificates are issued only in accordance with the terms of the Global Certificate and this
Agreement.

	4.5	 	The Global Certificate shall be deposited with, and registered in the name of, a nominee for
a common depositary for Euroclear Bank S.A./N.V., as operator of the Euroclear System and
Clearstream Banking societe anonyme (together, the Clearing Systems).

	4.6	 	If the Issuer is required to deliver definitive Certificates pursuant to the terms of the
Global Certificate, the Issuer shall promptly arrange for a stock of
definitive Certificates

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	 	 	(unauthenticated and with the names of the registered holders left blank but executed
on behalf of the Issuer and otherwise complete) to be made available to the Registrar.

	5.	 	PAYMENT TO THE FISCAL AGENT

	5.1	 	The Issuer shall, not later than 10.00 a.m. (New York City time) on each date on which any
payment of principal and/or interest in respect of any of the Notes becomes due under the
Conditions, transfer to an account specified by the Fiscal Agent such amount of Euro as shall
be sufficient for the purposes of the payment of principal and/or interest in same day funds.

	5.2	 	The Issuer shall ensure that, not later than the second London Business Day immediately
preceding the date on which any payment is to be made to the Fiscal Agent pursuant to
subclause 5.1, the Fiscal Agent shall receive a copy of an irrevocable payment instruction by
fax or SWIFT to the bank through which the payment is to be made. For the purposes of this
subclause 5.2, London Business Day means a day on which banks are open for business in London.

	5.3	 	If the amounts to be received by the Fiscal Agent under subclause 5.1 will be, or the amounts
actually received by it are, insufficient to satisfy all claims in respect of all payments
then falling due in respect of the Notes, the Fiscal Agent shall not be obliged to pay any
such claims until the Fiscal Agent has (i) received the full amount of all such payments, and
(ii) been able to identify and confirm receipt of funds.

	6.	 	NOTIFICATION OF NON-PAYMENT BY THE ISSUER

	 	 	The Fiscal Agent shall notify each of the other Paying Agents and the Registrar forthwith:

	 	(a)	 	if it has not by the relevant date specified in subclause 5.1 received
unconditionally the full amount in Euro required for the payment; and
	 
	 	(b)	 	if it receives unconditionally the full amount of any sum payable in respect
of the Notes after such date.

	 	 	The Fiscal Agent shall, at the expense of the Issuer, forthwith upon receipt of any amount
as described in subclause 6(b), cause notice of that receipt to be published under
Condition 12.

	7.	 	DUTIES OF THE REGISTRAR AND THE PAYING AGENTS

	7.1	 	Subject to the payments to the Fiscal Agent provided for by clause 5 being duly made, the
Paying Agents shall act as paying agents of the Issuer and shall pay or cause to be paid on
behalf of the Issuer, on and after each date on which any payment becomes due and payable, the
amounts of principal and interest payable in respect of each Note under the Conditions and the
provisions of this Agreement and, in the case of a payment of principal following receipt of
the Note at the specified office of the relevant Paying Agent.

	7.2	 	If default is made by the Issuer in respect of any payment, unless and until the full amount
of the payment has been made under the terms of this Agreement (except as to the time of
making the same) or other arrangements satisfactory to the Fiscal Agent have been made,
neither the Fiscal Agent nor any of the other Paying Agents shall be bound to act as paying
agents.

	7.3	 	Without prejudice to subclauses 7.1 and 7.2, if the Fiscal Agent pays any amounts to the
holders of Notes or to any other Paying Agent at a time when it has not received payment in

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	 	 	full in respect of the Notes in accordance with subclause 5.1 (the excess of the amounts so
paid over the amounts so received being the Shortfall), the Issuer will, in addition to
paying amounts due under subclause 5.1, pay to the Fiscal Agent on demand interest (at a
rate which represents the Fiscal Agent’s cost of funding the Shortfall) on the Shortfall
(or the unreimbursed portion thereof) until the receipt in full by the Fiscal Agent of the
Shortfall.

	7.4	 	Whilst the Notes are represented by the Global Certificate, all payments due in respect of
the Notes shall be made to, or to the order of, the holder of the Global Certificate, subject
to and in accordance with the provisions of the Global Certificate. On the occasion of each
payment, the Paying Agent to which the Global Certificate was presented for the purpose of
making the payment shall cause the appropriate Schedule to the Global Certificate to be
annotated so as to evidence the amounts and dates of the payments of principal and/or interest
as applicable.

	7.5	 	If on presentation of a Note the amount payable in respect of the Note is not paid in full
(otherwise than as a result of withholding or deduction for or on account of any Taxes as
permitted by the Conditions) the Paying Agent to whom the Note is presented shall procure that
the Note is enfaced with a memorandum of the amount paid and the date of payment.

	8.	    	REIMBURSEMENT OF THE PAYING AGENTS

	 	 	The Fiscal Agent shall charge the account referred to in clause 5 for all payments
made by it under this Agreement and will credit or transfer to the respective accounts of
the other Paying Agents the amount of all payments made by them under the Conditions
immediately upon notification from them, subject in each case to any applicable laws or
regulations.

	9.	    	NOTICE OF ANY WITHHOLDING OR DEDUCTION

	9.1	 	If the Issuer is, in respect of any payment in respect of the Notes, compelled to withhold
or deduct any amount for or on account of any Taxes as contemplated by Condition 8, the Issuer
shall give notice to the Fiscal Agent as soon as it becomes aware of the requirement to make
the withholding or deduction and shall give to the Fiscal Agent such information as the Fiscal
Agent shall require to enable it to comply with the requirement.

	9.2	 	All payments by the Issuer under this Agreement shall be made free and clear of, and without
withholding or deduction for, any taxes, duties, assessments or governmental charges of
whatsoever nature imposed, levied, collected, withheld or assessed by any government having
power to tax, unless such withholding or deduction is required by law. In that event, the
Issuer shall pay such additional amounts as shall be necessary in order that the net amounts
received by the Agent after such withholding or deduction shall equal the respective amount
which would otherwise have been receivable by the Agent if no such withholding or deduction
had been made.

	10.	 	DUTIES OF THE REGISTRAR

	10.1	 	The Registrar shall so long as any Note is outstanding:

	 	(a)	 	maintain at its specified office a register (the Register) of the holders of
the Registered Notes which shall show (i) the principal amounts and the serial numbers
of the Notes, (ii) the dates of issue of all Notes, (iii) all subsequent transfers and
changes of ownership of Notes, (iv) the names and addresses of the holders of the
Notes, (v) all cancellations of Notes, whether because of their purchase by the Issuer
or any Subsidiary of the Issuer, their replacement or otherwise, and (vi) all
replacements of Notes (subject, where appropriate, in the case of (v), to the
Registrar

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	 	 	 	having been notified as provided in this Agreement), and subject to applicable laws
and regulations at all reasonable times during office hours make such copy of the
Register available to the Fiscal Agent, Transfer Agent, Paying Agent, Issuer, any
person authorised by the Issuer or any Noteholder for inspection;
	 
	 	(b)	 	register all transfers of Notes;
	 
	 	(c)	 	receive any document in relation to or affecting the title to any of the Notes
including all forms of transfer, forms of exchange, probates, letters of administration
and powers of attorney;
	 
	 	(d)	 	maintain proper records of the details of all documents received by itself or
the Transfer Agent;
	 
	 	(e)	 	prepare all such lists of holders of the Notes as may be required by the Issuer
or the Fiscal Agent or any person authorised by either of them;
	 
	 	(f)	 	subject to applicable laws and regulations at all reasonable times during
office hours make the Register available to the Issuer or any person authorised by it
or the holder of any Note for inspection and for the taking of copies or extracts;
	 
	 	(g)	 	notify the Fiscal Agent upon its request not less than seven days before each
due date for the payment of interest of the names and addresses of all registered
holders of the Notes at the close of business on the relevant Record Date and the
amounts of their holdings in order to enable the Fiscal Agent to make or arrange for
due payment to the holders of the amounts of interest payable in respect of the Notes
or, as the case may be, the amounts required to redeem the Notes;
	 
	 	(h)	 	comply with the proper and reasonable requests of the Issuer with respect to
the maintenance of the Register and give to the Fiscal Agent and the Transfer Agent
such information as may be reasonably required by them for the proper performance of
their duties;
	 
	 	(i)	 	forthwith, and in any event within three business days of the relevant request
(or such longer period as may be required to comply with any applicable fiscal or
other regulations), authenticate and issue, upon receipt by it of, or receipt by it of
notification from any Transfer Agent of delivery to it of, Notes for transfer, duly
dated and completed Notes in the name of the registered holders and deliver the Notes
at its specified office or at the specified office of the Transfer Agent or (at the
risk of the relevant registered holders) send the Notes to such address as the
registered holders may request; and
	 
	 	(j)	 	accept Notes delivered to it with a request for transfer of all or part of the
Note, and shall, if appropriate, charge to the holder of a Note presented for transfer
the costs or expenses (if any) of delivering Notes issued on such transfer other than
by regular mail. Holders of the Notes shall be responsible for payment of any stamp
duty, tax or other governmental charge that may be imposed in relation to the
transfer, and for the avoidance of doubt, none of the Agents shall have any
responsibility in connection therewith.

	10.2	 	The Issuer shall deliver to the Registrar for the performance of its duties under this
Agreement from time to time so long as any Note is outstanding, sufficient duly executed
Notes as may be required for the performance of the Registrar’s duties.

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	10.3	 	Notes shall be dated:

	 	(a)	 	in the case of the Global Certificate issued on the date of closing, with that date; or
	 
	 	(b)	 	in the case of a Note issued upon transfer, with the date of registration in
the Register of the transfer; or
	 
	 	(c)	 	in the case of a Note issued to the transferor upon transfer in part of a
Note, with the same date as the date of the Note transferred; or
	 
	 	(d)	 	in the case of a Note issued pursuant to clause 16 with the same date as the
date of the lost, stolen, mutilated, defaced or destroyed Note in replacement of which
it is issued.

	11.	 	DUTIES OF THE TRANSFER AGENT

	11.1	 	The Transfer Agent shall perform the duties set out in this Agreement and the Conditions and,
in performing those duties, shall comply with the Conditions and the provisions of this
Agreement.

	11.2	 	The Transfer Agent shall:

	 	(a)	 	accept Notes delivered to it with a request for transfer of all or part of the
Note, and shall, in each case, give to the Registrar all relevant details to enable it
to issue Notes in accordance with each request; and

	 	(b)	 	if appropriate, charge to the holder of a Note presented for transfer the costs
or expenses (if any) of the Registrar in delivering Notes issued on such transfer other
than by regular mail. Holders of the Notes shall be responsible for payment of any
stamp duty, tax or other governmental charge that may be imposed in relation to the
transfer, and for the avoidance of doubt, none of the Agents shall have any
responsibility in connection therewith.

	12.	 	REGULATIONS FOR TRANSFER OF REGISTERED NOTES

	 	 	Subject as provided below, the Issuer may from time to time agree with the Transfer Agent
reasonable regulations to govern the transfer and registration of Notes. The initial
regulations, which shall apply until amended under this clause, are set out in Schedule 4.
The Transfer Agent agrees to comply with the regulations as amended from time to time.

	13.	 	DUTIES TO THE FISCAL AGENT IN CONNECTION WITH OPTIONAL REDEMPTION AND
REDEMPTION FOR TAXATION REASONS

	 	 	If the Issuer decides to redeem all of the Notes for the time being outstanding under
Condition 7(2) and/or 7(3), it shall give notice of the decision to redeem to the Fiscal
Agent in accordance with the Conditions.

	14.	 	RECEIPT AND PUBLICATION OF NOTICES

	14.1	 	Forthwith upon the receipt by the Fiscal Agent of a demand or notice from any Noteholder
under Condition 10 the Fiscal Agent shall forward a copy of the demand or notice to the
Issuer.

	14.2	 	On behalf of and at the request and expense of the Issuer, the Fiscal Agent shall cause to be
published all notices required to be given by the Issuer under the Conditions.

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	14.3	 	The Fiscal Agent shall, at the request and expense of the Issuer, notify in
writing the holders of Notes in respect of all notices required to be so given under the
Conditions.

	15.	 	CANCELLATION OF NOTES

	15.1	 	All Notes which are surrendered in connection with redemption or transfer shall be cancelled
by the Agent to which they are surrendered. Each of the Agents shall give to the Fiscal Agent
details of all payments made by it and shall deliver all cancelled Notes to the Fiscal Agent
(or as the Fiscal Agent may specify). Where Notes are purchased by or on behalf of the Issuer
or any of its Subsidiaries, the Issuer shall procure that the Notes are promptly cancelled and
delivered to the Fiscal Agent or its authorised agent.

	15.2	 	The Fiscal Agent or its authorised agent shall (unless otherwise instructed by the Issuer in
writing and save as provided in subclause 17.1) destroy all cancelled Notes and furnish the
Issuer with a certificate of destruction containing written particulars of the serial numbers
of the Notes so destroyed.

	16.	 	ISSUE OF REPLACEMENT CERTIFICATES

	16.1	 	The Issuer shall cause a sufficient quantity of additional forms of Certificates to be
available, upon request, to the Registrar for the purpose of issuing replacement Certificates
as provided below.

	16.2	 	The Fiscal Agent and the Registrar shall, subject to and in accordance with Condition 11 and
the following provisions of this clause, cause to be authenticated (in the case only of
replacement Certificates) and delivered any replacement Certificates which the Issuer may
determine to issue in place of Certificates which have been lost, stolen, mutilated, defaced
or destroyed.

	16.3	 	The Fiscal Agent or, as the case may be, the Registrar shall obtain verification, in the case
of an allegedly lost, stolen or destroyed Certificate in respect of which the serial number is
known, that the Certificate has not previously been redeemed or paid. Neither the Fiscal Agent
nor the Registrar shall issue a replacement Certificate unless and until the applicant has:

	 	(a)	 	paid such expenses and costs as may be incurred in connection with the replacement;
	 
	 	(b)	 	furnished it with such evidence and indemnity as the Issuer may reasonably
require; and
	 
	 	(c)	 	in the case of a mutilated or defaced Certificate, surrendered it to the Fiscal
Agent or, as the case may be, the Registrar.

	16.4	 	The Fiscal Agent or, as the case may be, the Registrar shall cancel mutilated or defaced
Certificates in respect of which replacement Certificates have been issued pursuant to this
clause and all Certificates which are so cancelled shall be delivered by the Registrar to the
Fiscal Agent (or as it may specify). The Fiscal Agent shall furnish the Issuer with a
certificate stating the serial numbers of the Certificates received by it and cancelled
pursuant to this clause and shall, unless otherwise requested by the Issuer, destroy all those
Certificates and furnish the Issuer with a destruction certificate containing the information
specified in subclause 15.2.

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	16.5	 	The Fiscal Agent or, as the case may be, the Registrar shall, on issuing any
replacement Certificate, forthwith inform the Issuer, the other Paying Agents and the
Registrar and the Transfer Agent of the serial number of the replacement Certificate issued
and (if known) of the serial number of the Certificate in place of which the replacement
Certificate has been issued.

	16.6	 	Whenever a Certificate for which a replacement Certificate has been issued and the serial
number of which is known is presented to a Paying Agent for payment or to a Transfer Agent for
transfer, the relevant Agent shall immediately send notice to the Issuer and (if it is not
itself the Fiscal Agent) the Fiscal Agent.

	17.	 	RECORDS AND CERTIFICATES

	17.1	 	The Fiscal Agent shall keep a full and complete record of all Certificates and of their
redemption, purchase by or on behalf of the Issuer or any of its Subsidiaries, cancellation or
payment (as the case may be) and of all replacement Certificates issued in substitution for
lost, stolen, mutilated, defaced or destroyed Certificates. The Fiscal Agent shall at all
reasonable times make the records available to the Issuer.

	17.2	 	The Fiscal Agent shall give to the Issuer, as soon as possible and in any event within four
months after the date of redemption, purchase, payment or replacement of a Certificate (as the
case may be), a certificate stating (a) the aggregate principal amount of Certificates which
have been redeemed, (b) the serial numbers of those Certificates, (c) the aggregate amount of
interest paid (and the due dates of the payments) on the Global Certificate and/or on the
Certificates, (d) the aggregate principal amounts of Notes (if any) which have been purchased
by or on behalf of the Issuer or any of its Subsidiaries and cancelled (subject to delivery of
the Certificates to the Fiscal Agent) and the serial numbers of such Certificates and (e) the
aggregate principal amounts of Certificates which have been surrendered and replaced and the
serial numbers of those Certificates.

	18.	 	COPIES OF THIS AGREEMENT AVAILABLE FOR INSPECTION

	 	 	The Paying Agents shall hold copies of this Agreement and any other documents
expressed to be held by them in the Prospectus dated 4 October 2006 issued by the Issuer in
relation to the Certificates available for inspection. For this purpose, the Issuer shall
furnish the Paying Agents with sufficient copies of such documents.

	19.	 	COMMISSIONS AND EXPENSES

	19.1	 	The Issuer shall pay to the Fiscal Agent such commissions and fees in respect of the services
of the Agents under this Agreement as shall be agreed between the Issuer and the Fiscal Agent.
The Issuer shall not be concerned with the apportionment of payment among the Agents other
than such agents that may be appointed from time to time by the Issuer that are not part of
the Deutsche Bank group of companies.

	19.2	 	The Issuer shall also pay to the Fiscal Agent an amount equal to any value added tax which
may be payable in respect of the commissions or fees together with all reasonable expenses
incurred by the Agents in connection with their services under this Agreement.

	19.3	 	The Fiscal Agent shall arrange for payment of the commissions and fees due to the other
Agents and arrange for the reimbursement of their expenses promptly after receipt of the
relevant moneys from the Issuer.

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	19.4	 	At the request of the Fiscal Agent, the parties to this Agreement may from time
to time during the continuance of this Agreement review the commissions and fees agreed
initially pursuant to subclause 19.1 with a view to determining whether the parties can
mutually agree upon any changes to the commissions or fees.

	20.	 	INDEMNITY

	20.1	 	The Issuer undertakes to indemnify each of the Agents and their directors, officers,
employees and controlling persons against all losses, liabilities, costs, claims, actions,
damages, expenses or demands which any of them may incur or which may be made against any of
them as a result of or in connection with the appointment of or the exercise of the powers and
duties by any Agent under this Agreement except as may result from the wilful default, fraud,
gross negligence or bad faith of such Agents and their respective directors, officers,
employees and controlling persons.

	20.2	 	The Agents undertake to indemnify each of the Issuer and its directors, officers, employees
and controlling persons against all losses, liabilities, costs, claims, actions, damages,
expenses or demands which any of them may incur or which may be made against any of them as a
result of or in connection with the appointment of or the exercise of the powers and duties by
the Issuer under this Agreement except as may result from the wilful default, fraud, gross
negligence or bad faith of the Issuer and its directors, officers, employees and controlling
persons.

	20.3	 	Except in the case of its wilful default, gross negligence or bad faith, the Fiscal Agent
shall not be liable for any act or omission under this Agreement or if any Note shall be lost,
stolen, destroyed or damaged.

	20.4	 	Notwithstanding any of the foregoing subclauses 20.1 and 20.2, under no circumstances shall
the Issuer or any of the Agents be liable for any consequential or special loss (being loss of
business, goodwill, opportunity or profit), howsoever caused or arising.

	20.5	 	The indemnities in this clause 20 shall survive the termination or expiry of this Agreement.

	21.	 	REPAYMENT BY FISCAL AGENT

	 	 	Sums paid by or by arrangement with the Issuer to the Fiscal Agent pursuant to the
terms of this Agreement shall not be required to be repaid to the Issuer unless and until
any Note becomes void under the provisions of Condition 9 but in that event the Fiscal Agent
shall forthwith repay to the Issuer sums equivalent to the amounts which would otherwise
have been payable in respect of the relevant Note.

	22.	 	CONDITIONS OF APPOINTMENT

	22.1	 	Subject as provided in subclause 22.3, the Fiscal Agent shall be entitled to deal with
money paid to it by the Issuer for the purposes of this Agreement in the same manner as other
money paid to a banker by its customers and shall not be liable to account to the Issuer for
any interest or other amounts in respect of the money. No money held by any Agent need be
segregated except as required by law.

	22.2	 	Subject as provided in subclause 22.1, in acting under this Agreement and in connection with
the Notes, the Agents shall act solely as agents of the Issuer and will not assume any
obligations towards or relationship of agency or trust for or with any of the owners or
holders of the Notes.

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	22.3	 	No Agent shall exercise any right of set-off or lien against the Issuer or any holders
of Notes in respect of any moneys payable to or by it under the terms of this Agreement.

	22.4	 	Except as otherwise permitted in the Conditions or as ordered by a court of competent
jurisdiction or required by law or otherwise instructed by the Issuer, each of the Agents
shall be entitled to treat the registered holder of any Note as the absolute owner for all
purposes (whether or not the Note shall be overdue and notwithstanding any notice of ownership
or other writing on the Note or any notice of previous loss or theft of the Note).

	22.5	 	Each of the Agents shall be obliged to perform such duties and only such duties as are set
out in this Agreement and the Notes and no implied duties or obligations shall be read into
this Agreement or the Notes against the Agents.

	22.6	 	The Fiscal Agent may consult with legal and other professional advisers and the opinion of
the advisers shall be full and complete protection in respect of action taken, omitted or
suffered under this Agreement in good faith and in accordance with the opinion of the
advisers.

	22.7	 	Each of the Agents shall be protected and shall incur no liability for or in respect of
action taken, omitted or suffered in reliance upon any instruction, request or order from the
Issuer, or any notice, resolution, direction, consent, certificate, affidavit,
statement, facsimile or document which it reasonably believes to be genuine and to have been
delivered, signed or sent by the proper party or parties or upon written instructions from the
Issuer.

	22.8	 	Any of the Agents and their affiliates, their officers, directors, employees or controlling
persons may become the owner of, or acquire any interest in, Notes with the same rights that
it or he would have if the Agent concerned were not appointed under this Agreement, and may
engage or be interested in any financial or other transaction with the Issuer, and may act on,
or as depositary, trustee or agent for, any committee or body of holders of Notes or other
obligations of the Issuer, as freely as if the Agent were not appointed under this Agreement.

	22.9	 	The Agents shall not be under any obligation to take any action under this Agreement which
any of them expects may result in any cost, expense or liability accruing to it, the payment
of which within a reasonable time is not, in its opinion, assured to it.

	23.	 	COMMUNICATION WITH AGENTS

	 	 	A copy of all communications relating to the subject matter of this Agreement between
the Issuer and any of the Agents other than the Fiscal Agent shall be sent to the Fiscal
Agent.

	24.	 	TERMINATION OF APPOINTMENT

	24.1	 	The Issuer may terminate the appointment of any Agent at any time and/or appoint
additional or other Agents by giving to the Agent whose appointment is concerned and, where
appropriate, the Fiscal Agent at least 60 days’ prior written notice to that effect, provided
that, so long as any of the Notes is outstanding, (a) in the case of a Paying Agent, the
notice shall not expire less than 45 days before any due date for the payment of interest and
(b) notice shall be given under Condition 12 at least 30 days before the removal or
appointment of an Agent.

	24.2	 	Notwithstanding the provisions of subclause 24.1, if at any time (i) an Agent becomes
incapable of acting, or is adjudged bankrupt or insolvent, or files a voluntary petition in
bankruptcy or makes an assignment for the benefit of its creditors or consents to the

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	 	 	appointment of an administrator, liquidator or administrative or other receiver of all
or any substantial part of its property, or if an administrator, liquidator or
administrative or other receiver of it or of all or a substantial part of its property is
appointed, or it admits in writing its inability to pay or meet its debts as they may
mature or suspends payment of its debts, or if an order of any court is entered approving
any petition filed by or against it under the provisions of any applicable bankruptcy or
insolvency law or if a public officer takes charge or control of the Agent or of its
property or affairs for the purpose of rehabilitation, administration or liquidation, the
Issuer may forthwith without notice terminate the appointment of the Agent, in which event
notice shall be given to the Noteholders under Condition 12 as soon as is practicable.

	24.3	 	The termination of the appointment of an Agent under this Agreement shall not entitle the
Agent to any amount by way of compensation but shall be without prejudice to any amount then
accrued due.

	24.4	 	All or any of the Agents may resign their respective appointments under this Agreement at any
time by giving to the Issuer and, where appropriate, the Fiscal Agent at least 90 days’ prior
written notice to that effect, provided that, so long as any of the Notes is outstanding, the
notice shall not, in the case of a Paying Agent, expire less than 45 days before any due date
for the payment of interest. Following receipt of a notice of resignation from a Paying Agent,
the Issuer shall promptly, and in any event not less than 30 days before the resignation takes
effect, give notice to the Noteholders under Condition 12. If the Fiscal Agent shall resign or
be removed pursuant to subclauses 24.1 or 24.2 above or in accordance
with this subclause 24.4, the Issuer shall promptly and in any event within 30 days of
receipt of the notice of resignation appoint a successor (being a leading bank acting through
its office in London). If the Issuer fails to appoint a successor within such period, the
Fiscal Agent may select a leading bank acting through its office in London to act as Fiscal
Agent hereunder and the Issuer shall appoint that bank as the successor Fiscal Agent.

	24.5	 	Notwithstanding the provisions of subclauses 24.1, 24.2 and 24.4, so long as any of the Notes
is outstanding, the termination of the appointment of an Agent (whether by the Issuer or by
the resignation of the Agent) shall not be effective unless upon the expiry of the relevant
notice there is:

	 	(a)	 	a Fiscal Agent;
	 
	 	(b)	 	a Paying Agent (which may be the Fiscal Agent) in Luxembourg so long as the
Notes are admitted to trading on the Luxembourg Stock Exchange;
	 
	 	(c)	 	so long as such a paying agent exists, a Paying Agent in a Member State of the
European Union that is not obliged to withhold or deduct tax pursuant to European
Council Directive 2003/48/EC or any law implementing or complying with, or introduced
in order to conform to, such Directive;
	 
	 	(d)	 	a Paying Agent in a jurisdiction within Continental Europe; and
	 
	 	(e)	 	a Registrar and a transfer agent.

	24.6	 	Any successor Agent shall execute and deliver to its predecessor, the Issuer and, where
appropriate, the Fiscal Agent an instrument accepting the appointment under this Agreement,
and the successor Agent, without any further act, deed or conveyance, shall become vested with
all the authority, rights, powers, trusts, immunities, duties and obligations of the
predecessor with like effect as if originally named as an Agent.

12

 

	24.7	 	If the appointment of an Agent (other than the Agent Bank) under this Agreement is
terminated (whether by the Issuer or by the resignation of the relevant Agent), such Agent
shall on the date on which the termination takes effect deliver to its successor Agent (or,
if none, the Fiscal Agent) all Notes surrendered to it but not yet destroyed and all records
concerning the Notes maintained by it (except such documents and records as it is obliged by
law or regulation to retain or not to release) and pay to its successor Agent (or, if none,
to the Fiscal Agent) the amounts (if any) held by it in respect of Notes which have become
due and payable but which have not been presented for payment, but shall have no other
duties or responsibilities under this Agreement.

	24.8	 	If the Fiscal Agent or any of the other Agents shall change its specified office, it shall
give to the Issuer and, where appropriate, the Fiscal Agent not less than 45 days’ prior
written notice to that effect giving the address of the new specified office. As soon as
practicable thereafter and in any event at least 30 days before the change, the Fiscal Agent
shall give to the Noteholders on behalf of and at the expense of the Issuer notice of the
change and the address of the new specified office under Condition 12.

	24.9	 	A corporation into which any Agent for the time being may be merged or converted or a
corporation with which the Agent may be consolidated or a corporation resulting from a merger,
conversion or consolidation to which the Agent shall be a party, any corporation to which such
Agent shall sell or otherwise transfer all or substantially all of its assets or any
corporation to which such Agent shall sell or otherwise transfer all or substantially all of
its corporate trust business, shall, to the extent permitted by applicable law, be the
successor Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties to this Agreement. Notice of any merger,
conversion or consolidation shall forthwith be given to the Issuer and, where appropriate, the
Fiscal Agent.

	25.	 	MEETINGS OF NOTEHOLDERS

	 	 	The provisions of Schedule 3 shall apply to meetings of the Noteholders and shall have
effect in the same manner as if set out in this Agreement provided that, so long as any of
the Notes are represented by the Global Certificate, the expression Noteholders shall
include the persons for the time being shown in the records of Euroclear Bank S.A./N.V. as
operator of the Euroclear System (Euroclear) and/or Clearstream Banking, societe anonyme
(Clearstream, Luxembourg), as the holders of a particular principal amount of such Notes
(each an Accountholder) (in which regard a certificate or other document issued by
Euroclear or Clearstream, Luxembourg as to the principal amount of such Notes standing to
the account of any person shall be conclusive and binding) for all purposes other than with
respect to the payment of principal and interest on such Notes, the right to which shall be
vested as against the Issuer solely in the Relevant Nominee and the expressions holder and
holders shall be construed accordingly.

	26.	 	CONSOLIDATION, MERGER OR TRANSFER

	 	 	The Issuer may without the consent of the Noteholders, merge or consolidate with any
other corporation or dispose of all or substantially all of its assets to any other
corporation, provided that the successor corporation assumes all obligations of the Issuer
under the Notes and this Agreement and certain other conditions set forth in the
Conditions are met.

13

 

	27.	 	NOTICES
	 
	 	 	Any notice required to be given under this Agreement to any of the parties shall be in
English and shall be delivered in person, sent by pre-paid post (first class if inland,
first class airmail if overseas) or by facsimile addressed to:

	 	 	 	 	 	 	 
	 	 	The Issuer:	 	Polo Ralph Lauren Corporation
	 	 	 	 	650 Madison Avenue
	 	 	 	 	New York NY 10022
	 	 	 	 	USA
	 
	 	 	 	 	 	 
	 

	 	 	 	Facsimile No:	 	+ 1 212 813-7705
	 
	 	 	 	 	 	 
	 
	 	 	 	Attention:	 	Tracey T. Travis
	 

	 	 	 	 	 	Senior Vice President and Chief
	 
	 	 	 	 	 	Financial Officer
	 
	 	 	 	 	 	 
	 	 	The Fiscal Agent:	 	Deutsche Bank AG, London Branch
	 	 	 	 	Winchester House
	 	 	 	 	1 Great Winchester Street
	 	 	 	 	London EC2N 2DB
	 	 	 	 	United Kingdom
	 
	 	 	 	 	 	 
	 

	 	 	 	Facsimile No:
	 	+44 207 547 6149
	 

	 	 	 	Attention:
	 	Trust & Securities Services
	 
	 	 	 	 	 	 
	 	 	The Paying Agent and Registrar:	 	Deutsche Bank Luxembourg S.A.
	 	 	 	 	2 Boulevard Konrad Adenauer
	 	 	 	 	L-1115 Luxembourg
	 	 	 	 	Luxembourg
	 
	 	 	 	 	 	 
	 

	 	 	 	Facsimile No:
	 	+ 352 021 223319
	 

	 	 	 	Attention:
	 	Trust & Securities Services

	 	 	or such other address of which notice in writing has been given to the other parties
to this Agreement under the provisions of this clause.
	 
	 	 	Any such notice shall take effect, if delivered in person, at the time of delivery, if
sent by post, three days in the case of inland post or seven days in the case of overseas
post after despatch, and, in the case of facsimile, 24 hours after the time of despatch,
provided that in the case of a notice given by facsimile transmission such notice shall
forthwith be confirmed by post. The failure of the addressee to receive such confirmation
shall not invalidate the relevant notice given by facsimile.
	 
	28.	 	TAXES AND STAMP DUTIES
	 
	 	 	The Issuer agrees to pay any and all stamp and other taxes or duties which may be payable
in connection with the execution, delivery, performance and enforcement of this Agreement
by the Agents.

14

 

	29.	 	COUNTERPARTS
	 
	 	 	This Agreement may be executed in any number of counterparts, all of which, taken together,
shall constitute one and the same agreement and any party may enter into this Agreement by
executing a counterpart.
	 
	30.	 	DESCRIPTIVE HEADINGS
	 
	 	 	The descriptive headings in this Agreement are for convenience of reference only and shall
not define or limit the provisions of this Agreement.
	 
	31.	 	GOVERNING LAW AND SUBMISSION TO JURISDICTION
	 
	31.1	 	This Agreement is governed by, and shall be construed in accordance with, the laws of the
State of New York, without regard to principles of conflicts of laws.
	 
	31.2	 	Each of the Issuer and the Agents irrevocably consents to the non-exclusive jurisdiction of
the
State or Federal courts sitting in the Borough of Manhattan, The City of New York (New
York Courts) to adjudicate any disputes which may arise out of or in connection with this
Agreement and that accordingly any action or proceedings (together referred to as
Proceedings) arising out of or in connection with this Agreement may be brought in such
New York Courts.
	 
	31.3	 	The Issuer and the Paying Agents agree to waive, to the fullest extent permitted by
applicable
law, any right any of them may have to a trial by jury in any legal proceeding directly or
indirectly arising out of or relating to this Agreement or any Note (whether based on
contract,
tort or any other theory). Each of the Issuer and each of the Paying Agents, (a) certifies
that
no representative, agent or attorney or any other party has represented, expressly or
otherwise,
that such other party would not, in the event of Proceedings, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties to this Agreement have been
induced to enter in this Agreement by, among other things, the mutual waivers and
certifications in this section.
	 
	31.4	 	The Issuer hereby agrees that the process by which any Proceedings in the New York Courts
are begun may be served on it by being delivered to it c/o Tracey T. Travis, 650 Madison
Avenue, New York, New York 10022 and agrees further that service of process upon such
person shall be deemed in every respect effective service of process in any such proceedings.
If the appointment of the person appointed to receive process on behalf of the Issuer ceases to
be effective, the Issuer shall forthwith appoint a further person in the State of New York to
accept service of process on its behalf and notify the name and address of such person to the
Fiscal Agent, on behalf of the Agents, and, failing such appointment within fifteen days, the
Fiscal Agent shall be entitled to appoint such a person by written notice addressed and
delivered to the Issuer.
	 
	31.5	 	To the extent that the Issuer or the Paying Agents have or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process with respect to itself or
its
property, the Issuer and the Paying Agents hereby irrevocably waive such immunity in
respect of its obligations under this Agreement, and in the case of the Issuer, under any
Note
or Coupon.

15

 

	32.	 	AMENDMENTS
	 
	 	 	This Agreement may be amended by all of the parties, without the consent of any
Noteholder, either:

	 	(a)	 	for the purpose of curing any ambiguity or of curing, correcting or
supplementing any
manifest or proven error or any other defective provision contained in this
Agreement; or
	 
	 	(b)	 	in any other manner which the parties may mutually deem necessary or
desirable and
which shall not be inconsistent with the Conditions and shall not be materially
prejudicial to the interests of the Noteholders.

SIGNED by each of the parties (or their duly authorised representatives) on the date which
appears first on page 1.

16

 

SCHEDULE 1

FORM OF THE GLOBAL CERTIFICATE

POLO RALPH LAUREN CORPORATION

GLOBAL CERTIFICATE

THIS GLOBAL CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE SECURITIES ACT). NEITHER THIS GLOBAL CERTIFICATE NOR ANY PORTION HEREOF
MAY BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO ANY U.S. PERSON UNLESS AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.

Polo Ralph Lauren Corporation (the Issuer) hereby certifies that Deutsche Bank AG, London Branch
is, at the date hereof, entered in the Register as the holder of the aggregate nominal amount of
EUR 300,000,000 (THREE HUNDRED MILLION EUROS) of a duly authorised issue of Notes (the Notes)
described, and having the provisions specified, in the attached Conditions (the Conditions).

Words and expressions defined or set out in the Conditions shall have the same meaning when used
in this Global Certificate.

This Global Certificate is issued subject to, and with the benefit of, the Conditions and an
Agency Agreement (the Agency Agreement which expression shall be construed as a reference to that
agreement as the same may be amended, supplemented, novated or restated from time to time) dated 5
October 2006 and made between, inter alios, the Issuer, Deutsche Bank Luxembourg S.A. (the
Registrar) and the other Agents named in it.

Subject to and in accordance with the Conditions, the registered holder of this Global Certificate
is entitled to receive on 4 October 2013 and/or on such earlier date(s) as all or any of the Notes
represented by this Global Certificate may become due and repayable in accordance with the
Conditions, the amount payable under the Conditions in respect of the Notes on each such date and
interest on the nominal amount of the Notes from time to time represented by this Global
Certificate calculated and payable as provided in the Conditions together with any other sums
payable under the Conditions, all in accordance with the Conditions.

On any redemption of payment of interest being made in respect of, or purchase and cancellation
of, any of the Notes represented by this Global Certificate details of such redemption, payment or
purchase and cancellation (as the case may be) shall be entered by the Registrar in the Register.
Upon any such redemption or purchase and cancellation, the nominal amount of the Notes held by the
registered holder hereof shall be reduced by the nominal amount of the Notes so redeemed or
purchased and cancelled. The nominal amount of the Notes held by the registered holder hereof
following any such redemption or purchase and cancellation or any transfer or exchange as referred
to below shall be that amount most recently entered in the Register.

Notes represented by this Global Certificate are transferable only in accordance with, and subject
to, the provisions of this Global Certificate and of Condition 2 and the rules and operating
procedures of Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, societe anonyme
(Clearstream, Luxembourg).

This Global Certificate may be exchanged in whole but not in part (free of charge) for definitive
Certificates (Certificates) in the form set out in Part 1 of Schedule 2 to the Agency Agreement
(on

17

 

the basis that all the appropriate details have been included on the face of such
definitive Certificates and the Conditions have been endorsed on or attached to such Certificates)
only upon the occurrence of any of the following events:

	(a)	 	principal or interest in respect of any Note is not paid when due and payable in accordance
with the Conditions;
	 
	(b)	 	if this Global Certificate is registered in the name of a nominee for a common depositary for
Euroclear and Clearstream, Luxembourg, the Issuer has been notified that both Euroclear and
Clearstream, Luxembourg have been closed for business for a continuous period of 14 days
(other than by reason of holiday, statutory or otherwise) or have announced an intention
permanently to cease business or have in fact done so and no successor clearing system is
available.

The Issuer will promptly give notice to Noteholders in accordance with Condition 12 upon the
occurrence of any such event. In the event of the occurrence of any such event, Euroclear and/or
Clearstream, Luxembourg, as the case may be, acting on the instructions of any holder of an
interest in this Global Certificate may give notice to the Registrar requesting exchange. Any
exchange shall occur no later than 10 days after the date of receipt of the relevant notice by the
Registrar.

Exchanges will be made upon presentation of this Global Certificate at the office of the Registrar
at 2 Boulevard Konrad Adenauer, L-1115 Luxembourg, Luxembourg by the holder of it on any day
(other than a Saturday or Sunday) on which banks are open for general business in Luxembourg. The
aggregate nominal amount of Certificates issued upon an exchange of this Global Certificate will
be equal to the aggregate nominal amount of this Global Certificate.

On an exchange in whole of this Global Certificate, this Global Certificate shall be surrendered
to the Registrar.

On any exchange or transfer following which either (i) Notes represented by this Global
Certificate are no longer to be so represented or (ii) Notes not so represented are to be so
represented details of the transfer shall be entered by the Registrar in the Register, following
which the nominal amount of this Global Certificate and the Note held by the registered holder of
this Global Certificate shall be increased or reduced (as the case may be) by the nominal amount
so transferred.

Until the exchange of the whole of this Global Certificate, the registered holder of this Global
Certificate shall in all respects (except as otherwise provided in this Global Certificate and in
the Conditions) be entitled to the same benefits as if he were the registered holder of the
Certificates represented by this Global Certificate.

In the event that this Global Certificate (or any part of it) has become due and repayable in
accordance with the Conditions or that the Maturity Date has occurred and, in either case, payment
in full of the amount due has not been made to the registered holder of this Global Certificate in
accordance with the provisions set out above then holders of interests in this Global Certificate
will become entitled to proceed directly against the Issuer on the basis of statement of account
provided by Euroclear and Clearstream, Luxembourg, as the case may be provided nothing herein
shall prevent the Issuer or any Agent from giving effect to any written certification, proxy or
other authorisation furnished by the depositary or impair, as between the Clearing Systems and
their agent members, the operation of customary practices of such depositary governing the
exercise of the rights of a holder of a beneficial interest in this Global Certificate.

18

 

This Global Certificate is not a document of title. Entitlements are determined by entry in
the Register and only the duly registered holder from time to time is entitled to payment in
respect of this Global Certificate.

For so long as all of the Notes are represented by this Global Certificate and this Global
Certificate is held on behalf of a clearing system, each person (other than another clearing
system) who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg (as
the case may be) as the holder of a particular aggregate principal amount of such Notes (each an
Accountholder) (in which regard any certificate or other document issued by Euroclear or
Clearstream, Luxembourg (as the case may be) as to the aggregate principal amount of such Notes
standing to the account by any person shall, in the absence of manifest error, be conclusive and
binding for all purposes) shall be treated as the holder of such aggregate principal amount of
such Notes (and the expression “Noteholders” and references to “holding of Notes” and to “holder
of Notes” shall be construed accordingly) for all purposes other than with respect to payments on
such Notes, the right to which shall be vested, as against the Issuer, solely in the nominee for
the relevant clearing system (the Relevant Nominee) in accordance with and subject to the terms of
this Global Certificate. Each Accountholder must look solely to Euroclear or Clearstream,
Luxembourg, as the case may be, for its share of each payment made to the Relevant Nominee.

Payments of principal and interest in respect of Notes represented by this Global Certificate will
be made upon presentation or, if no further payment falls to be made in respect of the Notes,
against presentation and surrender of this Global Certificate to or to the order of the Registrar
or such other Agent as shall have been notified to the holder of this Global Certificate for such
purpose.

Distributions of amounts with respect to book-entry interests in this Global Certificate will be
credited, to the extent received by the Registrar, to the cash accounts of Euroclear or
Clearstream, Luxembourg participants in accordance with the relevant system’s rules and
procedures.

A record of each payment made will be endorsed on the appropriate schedule to this Global
Certificate by or on behalf of the Registrar and shall be prima facie evidence that payment has
been made.

So long as all the Notes are represented by this Global Certificate and this Global Certificate is
held on behalf of a clearing system, notices to Noteholders may be given by delivery of the
relevant notice to that clearing system for communication by it to entitled Accountholders in
substitution for notification as required by the Conditions.

The Registrar will not register title to the Notes in a name other than that of the Relevant
Nominee for a period of 15 calendar days preceding the due date for any payment of principal or
interest in respect of the Notes.

Transfers of book-entry interests in the Notes will be effected through the records of Euroclear
and Clearstream, Luxembourg and their respective participants in accordance with the rules and
procedures of Euroclear and Clearstream, Luxembourg and their respective direct and indirect
participants.

This Global Certificate is governed by, and shall be construed in accordance with, New York
law. This Global Certificate shall not be valid unless authenticated by the Registrar.

19

 

IN WITNESS whereof the Issuer has caused this Global Certificate to be duly executed on its behalf.

POLO RALPH LAUREN CORPORATION

By

Authenticated without recourse

warranty or liability by

DEUTSCHE BANK

LUXEMBOURG S.A.

By:

20

 

- FORM OF TRANSFER -

FOR VALUE RECEIVED the undersigned, being the registered holder of this Global Certificate, hereby
sell(s), assign(s) and transfer(s) to

 

 

 

 

 

(Please print or type name and address (including postal code) of transferee)

EUR [ ] in principal amount outstanding of the EUR 300,000,000 4.50 per cent. Notes due 2013 of
Polo Ralph Lauren Corporation (the Notes) and all rights thereunder, hereby irrevocably
constituting and appointing Deutsche Bank Luxembourg S.A., in its capacity as registrar in relation
to the Notes (or any successor to Deutsche Bank Luxembourg S.A., in its capacity as such) to effect
the relevant transfer by means of appropriate entries in the register kept by it.

	 	 	 	 	 	 	 
	 

	 	Signature(s)
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Date:                                         

	 	 	 	N.B.: 1. This form of transfer must be accompanied by such documents, evidence and
information as may be required pursuant to the Conditions and must be executed
under the hand of the transferor or, if the transferor is a corporation, either
under its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers must be
delivered with this form of transfer.
	 
	 	2.	 	The name of the person by or on whose behalf this form of transfer is signed must
correspond with the name of the registered holder as it appears on the front of
this Global Certificate.

[Attached to the Global Certificate]

[Terms and Conditions as set out in Part 2 of Schedule 2]

[At the foot of the Terms and Conditions:]

21

 

FISCAL AGENT

Deutsche Bank AG, London Branch

Winchester House

1 Great Winchester Street

London EC2N 2DB

PAYING AGENT AND REGISTRAR

Deutsche Bank Luxembourg S.A.

2 Boulevard Konrad Adenauer

L-l115 Luxembourg

Luxembourg

22

 

SCHEDULE 2

FORM OF CERTIFICATE AND CONDITIONS OF THE NOTES

PART I

FORM OF CERTIFICATE

Polo Ralph Lauren Corporation (the Issuer) hereby certifies that [ ] is/are, at the date of this
Note, entered in the Register as the holder(s) of the aggregate nominal amount of [ ] of a duly
authorised issue of EUR 300,000,000 4.50 per cent. Notes due 2013 by the Issuer (the Notes)
described, and having the provisions specified, in the attached Conditions (the Conditions).
References in this Note to the Conditions shall be to the Terms and Conditions attached to this
Note.

Words and expressions defined or set out in the Conditions shall have the same meaning when used
in this Note.

This Note is issued subject to, and with the benefit of, the Conditions and an Agency Agreement
(the Agency Agreement, which expression shall be construed as a reference to that agreement as the
same may be amended, supplemented, novated or restated from time to time) dated 5 October 2006 and
made between, inter alios, the Issuer, Deutsche Bank Luxembourg S.A. (the Registrar) and the other
parties named in it.

Subject to and in accordance with the Conditions, the registered holder(s) of this Note is/are
entitled to receive on the 4 October 2013 and/or on such earlier date(s) as this Note may become
due and repayable in accordance with the Conditions, the amount payable under the Conditions in
respect of this Note on each such due date and interest (in any) on this Note calculated and
payable as provided in the Conditions together with any other sums payable under the Conditions,
all in accordance with the Conditions.

This Note is not a document of title. Entitlements are determined by entry in the Register and
only the duly registered holder from time to time is entitled to payment in respect of this Note.

This Note shall not be valid unless authenticated by the Registrar.

IN WITNESS whereof the Issuer has caused this Note to be duly executed on its behalf.

POLO RALPH LAUREN CORPORATION

By:

Authenticated without recourse,

warranty or liability by

DEUTSCHE BANK

LUXEMBOURG S.A.

By:

23

 

FORM OF TRANSFER

FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) to

 

 

 

 

 

(Please print or type name and address (including postal code) of transferee)

EUR [ ] nominal amount of this Note and all rights hereunder, hereby irrevocably
constituting and appointing [REGISTRAR] as attorney to transfer such principal amount of this
Note in the register maintained by POLO RALPH LAUREN CORPORATION with full power of substitution.

	 	 	 	 	 	 	 
	 

	 	Signature(s)
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Date:                                         

NOTE:

	2.	 	This form of transfer must be accompanied by such documents, evidence and information as
may be required pursuant to the Conditions and must be executed under the hand of the
transferor or, if the transferor is a corporation, either under its common seal or under
the hand
of two of its officers duly authorised in writing and, in such latter case, the document so
authorising such officers must be delivered with this form of transfer.
	 
	3.	 	The signature(s) on this form of transfer must correspond with the name(s) as it/they
appear(s) on the face of this Note in every particular, without alteration or enlargement
or any change whatever.

(Reverse of Note)

CONDITIONS OF THE NOTES

(as set out in Part 2 of this Schedule 2)

FISCAL AGENT

Deutsche Bank AG, London Branch

Winchester House

1 Great Winchester Street

London EC2N 2DB

24

 

PAYING AGENT AND REGISTRAR

Deutsche Bank Luxembourg S.A.

2 Boulevard Konrad Adenauer

L-l115 Luxembourg

Luxembourg

and/or such other or further Fiscal Agent, Paying Agents and/or Registrar and/or specified
offices as may from time to time be appointed by the Issuer and notice of which has been given to
the Noteholders.

25

 

PART 2

CONDITIONS OF THE NOTES

The following is the text of the Conditions of the Notes which (subject to
modification and except for the paragraphs in italics) will be endorsed on Certificates
issued in respect of the Notes:

The EUR
300,000,000 4.50 per cent. Notes due 2013 (the Notes, which expression shall in these
Conditions, unless the context otherwise requires, include any further notes issued pursuant to
Condition 14 and forming a single series with the Notes) of Polo Ralph Lauren Corporation (the
Issuer) are issued subject to and with the benefit of an agency agreement dated 5 October 2006
(such agreement as amended and/or supplemented and/or restated from
time to time, the Agency
Agreement) made between the Issuer, and Deutsche Bank AG, London Branch (in its capacity as
principal paying agent only, the Principal Paying Agent, and in its collective capacity as fiscal
agent and principal paying agent, the Fiscal Agent, and in its capacity as transfer agent, the
Transfer Agent) and Deutsche Bank Luxembourg S.A. (as Luxembourg paying agent and, in its capacity
as registrar, the Registrar, being together with the Fiscal Agent and the Transfer Agent, the
Paying Agents).

The statements in these Conditions include summaries of, and are subject to, the detailed
provisions of and definitions in the Agency Agreement. Copies of the Agency Agreement are available
for inspection during normal business hours at the specified office of each of the Paying Agents.
The holders of the Notes (the Noteholders) are entitled to the benefit of, are bound by, and are
deemed to have notice of, all the provisions of the Agency Agreement applicable to them. References
in these Conditions to the Fiscal Agent, the Registrar, the Transfer Agent and the Paying Agents
shall include any successor appointed under the Agency Agreement.

The
owners shown in the records of Euroclear Bank S.A.IN.V.
(Euroclear) and Clearstream
Banking, société anonyme (Clearstream, Luxembourg) of book-entry interests in Notes are entitled to
the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Agency
Agreement applicable to them.

	1.	 	FORM, DENOMINATION AND TITLE
	 
	(1)	 	Form and denomination
	 
	 	 	The Notes are in registered form, serially numbered, in denominations of EUR 50,000 each and
integral multiples of EUR 1,000 in excess thereof (referred to as the principal amount of a
Note). A note certificate (each a Certificate) will be issued to each Noteholder in respect of
its registered holding of Notes. Each Certificate will be numbered serially with an identifying
number which will be recorded on the relevant Certificate and in the register of Noteholders
which the Issuer will procure to be kept by the Registrar.
	 
	 	 	The Notes are not issuable in bearer form.
	 
	(2)	 	Title
	 
	 	 	Title to the Notes passes only by registration in the register of Noteholders. The holder of
any Note will (except as otherwise required by law) be treated as its absolute owner for all
purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any
interest or any writing on, or the theft or loss of, the Certificate issued in respect of it) and
no person will be liable for so treating the holder. In these
Conditions Noteholder and (in
relation to a Note) holder means the person in whose name a Note is registered in the register of
Noteholders.
	 
	 	 	For a description of the procedures for transferring title to book-entry interests in the Notes,
see the Agency Agreement and Condition 2.
	 
	2.	 	TRANSFERS OF NOTES AND ISSUE OF CERTIFICATES
	 
	(1)	 	Transfers
	 
	 	 	A Note may be transferred by depositing the Certificate issued in respect of that Note, with
the form of transfer on the back duly completed and signed, at the specified office of the
Registrar or any of the Transfer Agents.

26

 

	(2)	 	Delivery of new Certificates
	 
	 	 	Each new Certificate to be issued upon transfer of Notes will, within five business days of
receipt by the Registrar or the relevant Transfer Agent of the duly completed form of transfer
endorsed on the relevant Certificate, be mailed by uninsured mail at the risk of the holder
entitled to the Note to the address specified in the form of transfer. For the purposes of this
Condition, business day shall mean a day on which banks are open for business in the city in
which the specified office of the Transfer Agent with whom a Certificate is deposited in
connection with a transfer is located.
	 
	 	 	Except in the limited circumstances described herein (see “Summary of Provisions Relating to the
Notes while in Global Form”), owners of interests in the Notes will not be entitled to receive
physical delivery of Certificates. Issues of Certificates upon transfer of Notes are subject to
compliance by the transferor and transferee with the certification procedures described above and
in the Agency Agreement.
	 
	 	 	Where some but not all of the Notes in respect of which a Certificate is issued are to be
transferred, a new Certificate in respect of the Notes not so transferred will, within five
business days of receipt by the Registrar or the relevant Transfer Agent of the original
Certificate, be mailed by uninsured mail at the risk of the holder of the Notes not so
transferred to the address of such holder appearing on the register of Noteholders or as
specified in the form of transfer.
	 
	(3)	 	Formalities free of charge
	 
	 	 	Registration of transfer of Notes will be effected without charge by or on behalf of the
Issuer or any Paying Agent but upon payment (or the giving of such indemnity as the Issuer or any
Transfer Agent may reasonably require) in respect of any tax or other governmental charges which
may be imposed in relation to such transfer.
	 
	(4)	 	Closed Periods
	 
	 	 	No Noteholder may require the transfer of a Note to be registered during the period of
15 days ending on the due date for any payment of principal or interest on that Note.
	 
	(5)	 	Regulations
	 
	 	 	All transfers of Notes and entries on the register of Noteholders will be made subject to
the detailed regulations concerning transfer of Notes scheduled to the Agency Agreement. The
regulations may be changed by the Issuer with the prior written approval of the Registrar. A copy
of the current regulations will be mailed (free of charge) by the Registrar to any Noteholder who
requests one.
	 
	3.	 	STATUS OF THE NOTES
	 
	 	 	The Notes will constitute direct, unconditional and (subject as provided under Condition 4)
unsecured obligations of the Issuer and will at all times rank pari passu among themselves and
(subject to such obligations as are mandatorily preferred by law) with all other present and
future unsecured and unsubordinated obligations of the Issuer. Neither the Agency Agreement nor
the Notes will limit other unsecured indebtedness or securities which may be incurred or issued
by the Issuer and its subsidiaries. The Agency Agreement and the Notes will contain only the
financial or similar restrictions on the Issuer and its Subsidiaries (as defined below) described
in Condition 4 and Condition 15.
	 
	4.	 	COVENANTS OF THE ISSUER
	 
	 	 	The Issuer will not pledge, mortgage, encumber or otherwise grant, or permit any of its
Subsidiaries to pledge, mortgage, encumber or otherwise grant, a security interest in any
properties or assets owned by the Issuer or any of its Subsidiaries to secure Debt without

27

 

	 	 	securing the Notes equally and ratably with all Debt, secured by such security interest, unless
after giving effect thereto, the aggregate amount of all such other secured Debt plus all
Attributable Debt (as defined below) of the Issuer and its Subsidiaries in respect of Sale and
Leaseback Transactions (as defined below) would not exceed 10 per cent of Consolidated Net
Assets of the Issuer (Excluded Debt). The term Debt is defined to mean indebtedness for money
borrowed evidenced by bonds, notes, debentures or other debt securities and which is reflected as
a liability on the consolidated balance sheet, at the date of issuance, of the Issuer and its
Subsidiaries in accordance with generally accepted accounting principles as in effect in the
United States on the date of the Agency Agreement. The term
Consolidated Net Assets means the
total assets appearing on the most recently prepared consolidated balance sheet of the Issuer and
its Subsidiaries as at the end of the most recently completed fiscal quarter of the Issuer,
prepared in accordance with generally accepted accounting principles in the United States, less
all current liabilities (due within one year) as shown on such balance sheet.
	 
	 	 	Sale and leaseback transactions by the Issuer or any Subsidiary of any Principal Property (as
defined below), except for temporary leases for a term of not more than three years and except
for leases between the Issuer and Subsidiary or between Subsidiaries
(Sale and Leaseback
Transactions), are prohibited unless (i) the Issuer or such Subsidiary would be entitled to
issue, assume or guarantee Debt secured by the property involved at least equal in amount to the
Attributable Debt in respect of such transaction without equally and ratably securing the Notes
(provided that such Attributable Debt shall thereupon be deemed to be Debt subject to the
provisions of the preceding paragraph), (ii) an amount in cash equal to such Attributable Debt is
applied to the retirement (other than any mandatory retirement) of long-term non-subordinated
Debt of the Issuer or long-term Debt of a Subsidiary or (iii) an amount in cash equal to such
Attributable Debt is applied, within twelve months of the consummation of the Sale and Leaseback
Transaction, to the purchase or acquisition (or, in the case of real property, the construction)
of property or assets. Attributable Debt is defined as the present value (discounted at an
appropriate rate) of the obligation of a lessee for rental payments during the remaining term of
any lease.
	 
	 	 	The term Subsidiary is defined to mean any corporation which is consolidated in the Issuer’s
accounts and any corporation of which at least a majority of the outstanding stock having voting
power under ordinary circumstances to elect a majority of the board of directors of said
corporation shall at the time be owned by the Issuer or by the Issuer and one or more
Subsidiaries or by one or more Subsidiaries. The term Principal
Property is defined to mean any
office or facility which is owned by the Issuer or any Subsidiary, unless the Board of Directors
of the Issuer (or any duly authorized committee thereof) by resolution declares that such office
or facility, together with all other offices and facilities previously so declared, is not of
material importance to the total business conducted by the Issuer and its Subsidiaries as an
entirety.
	 
	5.	 	INTEREST
	 
	(1)	 	Interest Rate and Interest Payment Dates
	 
	 	 	The Notes bear interest from and including 5 October 2006 at the rate of 4.50 per cent per
annum, payable annually in arrear on 4 October (each an Interest
Payment Date). The first payment
of interest shall be in respect of the period from and including 5 October 2006 to, but
excluding, 4 October 2007, and shall be made on 4 October 2007.
	 
	(2)	 	Interest Accrual
	 
	 	 	Each Note will cease to bear interest from and including its due date for redemption unless, upon
due presentation, payment of the principal in respect of the Note is improperly withheld or
refused or unless default is otherwise made in respect of payment. In such event, interest will
continue to accrue until whichever is the earlier of:

(a) the date on which all amounts due in respect of such Note have been paid; and

(b) five days after the date on which the full amount of the moneys payable in respect of
such Notes has been received by the Fiscal Agent or the Registrar, as the case may be, and
notice to that effect has been given to the Noteholders in accordance with Condition 12.

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	(3)	 	Calculation of Broken Interest
	 
	 	 	When interest is required to be calculated in respect of a period of less than a full year,
it shall be calculated on the basis of (a) the actual number of days in the period from and
including the date from which interest begins to accrue (the
Accrual Date), but excluding the
date on which it falls due divided by (b) the actual number of days from and including the
Accrual Date, but excluding the next following Interest Payment Date.
	 
	6.	 	PAYMENTS
	 
	(1)	 	Payments in respect of Notes
	 
	 	 	Payment of principal and interest will be made by transfer to the registered account of the
Noteholder or by Euro cheque drawn on a bank that processes payments in Euro mailed to the
registered address of the Noteholder if it does not have a registered account. Payments of
principal and payments of interest due otherwise than on an Interest Payment Date will only be
made against surrender of the relevant Certificate at the specified office of any of the Agents.
Interest on Notes due on an Interest Payment Date will be paid to the holder shown on the
register of Noteholders at the close of business on the date (the
record date) being the
fifteenth day before the due date for the payment of interest.
	 
	 	 	For the purposes of this Condition 6, a Noteholder’s registered account means the Euro account
maintained by or on behalf of it with a bank that processes payments in Euro, details of which
appear on the register of Noteholders at the close of business, in the case of principal, on the
second business day (as defined below) before the due date for payment and, in the case of
interest, on the relevant record date, and a Noteholder’s registered address means its address
appearing on the register of Noteholders at that time.
	 
	(2)	 	Payments subject to Applicable Laws
	 
	 	 	Payments in respect of principal and interest on Notes are subject in all cases to any fiscal
or other laws and regulations applicable in the place of payment, but without prejudice to
the provisions of Condition 8.
	 
	(3)	 	No commissions
	 
	 	 	No commissions or expenses shall be charged to the Noteholders in respect of any payments
made in accordance with this Condition 6.
	 
	(4)	 	Payment on Business Days
	 
	 	 	Where payment is to be made by transfer to a registered account, payment instructions (for value
the due date or, if that is not a Business Day (as defined below), for value the first following
day which is a Business Day) will be initiated and, where payment is to be made by cheque, the
cheque will be mailed, on the Business Day preceding the due date for payment or, in the case of
a payment of principal or a payment of interest due otherwise than on an Interest Payment Date,
if later, on the Business Day on which the relevant Certificate is surrendered at the specified
office of a Paying Agent.
	 
	 	 	Noteholders will not be entitled to any interest or other payment for any delay after the due
date in receiving the amount due if the due date is not a Business Day, if the Noteholder is late
in surrendering its Certificate (if required to do so) or if a cheque mailed in accordance with
this Condition 6 arrives after the due date for payment.
	 
	 	 	In this Condition 6, Business Day means a day (other than a Saturday or Sunday) on which
commercial banks are open for business in London, and a day on which the TARGET System is open
and, in the case of presentation of a Note Certificate, in the place in which the Note
Certificate is presented.

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	(5)	 	Partial Payments
	 
	 	 	If the amount of principal or interest which is due on the Notes is not paid in full, the
Registrar will annotate the register of Noteholders with a record of the amount of principal,
premium (if any) or interest in fact paid.
	 
	(6)	 	Paying Agents
	 
	 	 	The names of the initial Paying Agents and their initial specified offices are set out at
the end of these Conditions. The Issuer reserves the right at any time to vary or terminate the
appointment of any Paying Agent and to appoint additional or other Paying Agents provided that:

(a) there will at all times be a Fiscal Agent;

(b) there will at all times be a Paying Agent (which may be the Fiscal Agent) having a
specified office in a European city which, so long as the Notes are listed on the Luxembourg
Stock Exchange, shall be Luxembourg;

(c) the Issuer undertakes that it will, so long as such a paying agent exists, ensure that it
maintains a Paying Agent in a Member State of the European Union that is not obliged to
withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any law
implementing or complying with, or introduced in order to conform to, such Directive;

(d) there will at all times be a Paying Agent in a jurisdiction within continental Europe; and

(e) there will at all times be a Registrar and a transfer agent.

	 	 	Notice of any termination or appointment, and of any changes in specified offices will be
given to the Noteholders promptly by the Issuer in accordance with Condition 12.
	 
	7.	 	REDEMPTION AND PURCHASE
	 
	(1)	 	Redemption at Maturity
	 
	 	 	Unless previously redeemed, called or purchased and cancelled as provided below, the Issuer
will redeem the Notes at their principal amount on 4 October 2013.
	 
	(2)	 	Issuer’s Call Option
	 
	 	 	The Notes will be redeemable, in whole but not in part at the Issuer’s option, at any time
at a redemption price equal to the greater of (i) 100 per cent of the principal amount of such
Notes or (ii) as determined by the Quotation Agent (as defined below), the sum of the present
values of the remaining scheduled payments of principal and interest thereon (not including any
portion of such payments of interest accrued as of the date of redemption) discounted to the
redemption date on an annual basis (based on the actual number of days elapsed divided by 365
(or, if any of those days elapsed fall in a leap year, the sum of (x) the number of those days
falling in a leap year divided by 366 and (y) the number of those days falling in a non-leap year
divided by 365)) at the Reference Dealer Rate (as defined below), plus in each case, accrued
interest thereon to the date of redemption.
	 
	 	 	For the purposes of this Condition 7(2),
	 
	 	 	Business Day means, in relation to any place, a day on which commercial banks and foreign
exchange markets settle payments in that place.
	 
	 	 	Quotation Agent means the Reference Dealer (as defined below).

	 
	 	 	
Reference Dealer means the Principal Paying Agent or its successor.
	 
	 	 	Reference Dealer Rate means with respect to the Reference Dealer and any redemption date, the
midmarket annual yield to maturity, as determined by the Reference Dealer, of the

30

 

	 	 	DBR 3.75 per cent. Notes due 4 July 2013 or, if that security is no longer outstanding, a similar
security in the reasonable judgment of the Reference Dealer, at 11:00 a.m. (London time) on the
third business day in London preceding such redemption date quoted in writing to the Fiscal Agent
by such Reference Dealer.
	 
	 	 	Notice of any redemption will be given to the Noteholders at least 30 days but not more than 60
days before the redemption date.
	 
	 	 	Unless the Issuer defaults in payment of the redemption price, on and after the redemption date,
interest will cease to accrue on the Notes called for redemption.
	 
	(3)	 	Redemption for Taxation Reasons
	 
	 	 	If, in the written opinion of independent counsel chosen by the Issuer, there is a substantial
probability that the Issuer has or will become obligated to pay additional interest on the Notes
as described below in Condition 8, as a result of any of the following events occurring on or
after 5 October 2006 (a) any change in, or amendment to, the laws (or any regulations or rulings
promulgated thereunder) of the United States or any political subdivision or taxing authority
thereof or therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, (b) any action taken by a
taxing authority of the United States or any political subdivision thereof or therein affecting
taxation, which action is generally applied or is taken with respect to the Issuer, (c) a
decision rendered by a court of competent jurisdiction in the United States or any political
subdivision thereof or therein, whether or not such decision was rendered with respect to the
Issuer, (d) a private letter ruling or technical advice memorandum issued by the National Office
of the United States Internal Revenue Service on substantially the same facts as those affecting
the Issuer or (e) any change, amendment, application, interpretation or execution of the laws of
the United States (or any regulations or rulings promulgated thereunder) shall have been
officially proposed, which change, amendment, action, application, interpretation or execution
would have effect after 5 October 2006 and the Issuer determines that such obligation cannot be
avoided by the use of reasonable measures then available to the Issuer, then the Issuer may, at
its option, upon not less than 30 nor more than 60 days’ prior notice to the holders for the time
being of the Notes, redeem the Notes in whole, but not in part, at a redemption price equal to
100 per cent of the principal amount thereof plus accrued interest, if any, to the date fixed
for redemption, provided that no such notice of redemption shall be given earlier than 90 days
prior to the earliest date on which the Issuer would be obligated to pay such additional interest
if a payment in respect to the Notes were due on such date and, at the time such notification of
redemption is given, such obligation to pay such additional interest remains in effect. Prior to
the publication of any notice of redemption pursuant to this paragraph, the Issuer shall deliver
to the Fiscal Agent (i) a certificate stating that the Issuer is entitled to effect such
redemption and that the conditions precedent to the right of the Issuer to so redeem have
occurred and (ii) an opinion of independent counsel chosen by the Issuer to the effect that there
is a substantial probability that the Issuer has or will become obligated to pay additional
interest on the Notes.
	 
	(4)	 	Noteholder Put
	 
	 	 	If a Put Event (as defined below) occurs, each Noteholder shall have the option (unless, prior to
the giving of the Put Event Notice (as defined below), the Issuer shall have given notice under
Condition 7(2) or 7(3)) to require the Issuer to redeem or, at the Issuer’s option, purchase (or
procure the purchase of) any or all of the Notes at their principal amount together with interest
accrued up to but excluding the Put Date (as defined below). Such
option (the Put Option) shall
operate as set out below.
	 
	 	 	If a Put Event occurs then, within 21 days of the end of the Change of Control Period (as defined
below), the Issuer shall give notice (a Put Event Notice) to the Noteholders in accordance with
Condition 12 specifying the nature of the Put Event and the procedure for exercising the Put
Option.

31

 

To exercise the Put Option if the relevant Notes are held outside of Euroclear and
Clearstream, Luxembourg, the Noteholder must within 30 days
after a Put Event (the Put Period)
deliver the Certificate in respect of such Notes at the specified office of any Paying Agent at any
time during normal business hours of such Paying Agent falling within the Put Period, accompanied
by a duly signed and completed notice of exercise in the then-current form obtainable from the
specified office of any Paying Agent (a Put Notice) and in which the Noteholder must specify the
registered account of such Noteholder (or, if payment is required to be made by cheque, the
registered address of such Noteholder (as per Condition 6(1)) to which payment is to be made under
this Condition 7(4). The Issuer shall at its option redeem or purchase (or procure the purchase of)
the relevant Notes on the date that is seven days (or, if that day is not a Business Day, the first
Business Day following the seven day period) after the expiration of the Put Period (the Put Date)
unless the Notes have been previously redeemed or purchased and cancelled. Payment in respect of
any Certificate so delivered will be made on the Put Date by transfer for value on the Put Date to
the registered account of such Noteholder (or if a registered address is specified for payment by
cheque, by cheque sent by first class post to such specified registered address). A Put Notice,
once given, shall be irrevocable.

To exercise the Put Option, if the relevant Notes are held through Euroclear or Clearstream,
Luxembourg the Noteholder must, within the Put Period, give notice to the Registrar of such
exercise in accordance with the standard procedures of Euroclear and Clearstream, Luxembourg (which
may include notice being given on such Noteholder’s instruction by Euroclear and Clearstream,
Luxembourg or any common depositary for them to the Registrar by electronic means) in a form
acceptable to Euroclear and Clearstream, Luxembourg from time to time.

A Put Event will be deemed to occur if:

(i) an offer to acquire capital stock of the Issuer (Shares), whether expressed as a tender
offer, merger proposal, legal offer, an invitation to tender, a scheme with regard to such
acquisition or in any other way, is made in circumstances where such offer is available to all
holders of Shares or all holders of Shares other than any holder of Shares who is the person
making such offer (or any Affiliate of such person or Related Person with respect to such person)
or who is excluded from the offer by reason of being connected with one or more specific
jurisdictions and, such offer having become or been declared unconditional in all respects, the
Issuer becomes aware that the right to cast more than 50 per cent of the votes which may
ordinarily be cast at a general meeting of holders of Shares has or will become beneficially
owned (within the meaning of Rule 13d-3 of the U.S. Securities Exchange Act of 1934, as amended
(the Exchange Act)) by the offer or and/or its Affiliates or Related Persons (the Relevant Person)
or an event occurs which has a like or similar effect (such event being a Change of Control)
provided that a Change of Control shall be deemed not to have occurred if all or substantially
all of the shareholders of the Relevant Person are, or immediately prior to the event which would
otherwise have constituted a Change of Control were, the shareholders of the Issuer with the same
pro rata interests in the share capital of the Relevant Person as such shareholders have, or as
the case may be, had, in the share capital of the Issuer,

where for the purposes of this Condition 7(4)(i) only:

shareholders means any shareholders along with any persons acting as a “group” for purposes
of Section 13(d) of the Exchange Act, or any successor provision thereto, along with any
Affiliates or Related Persons;

Affiliate of any person means any other person directly or indirectly controlling or
controlled by or under direct or indirect common control of such person;

control means the power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise, and
controlling and controlled have correlative meanings;

32

 

Related Person of any person means any other person owning 5 per cent or more of the
outstanding capital stock or other equity interest or combined voting power of such person; and

(ii) on the date (the Relevant Announcement Date) that is the earlier of (x) the date of the first
public announcement of the relevant Change of Control and (y) the date of the earliest Relevant
Potential Change of Control Announcement (if any), the Notes carry from any of Fitch Ratings Ltd.
(Fitch), Moody’s Investors Service Limited (Moody’s) or Standard & Poor’s Rating Services, a
division of The McGraw-Hill Companies, Inc. (S&P) or any of their respective successors or any
other rating agency (each a Substitute Rating Agency) of international standing, specified by the
Issuer (each, a rating agency):

(A) an investment grade credit rating (Baa3/BBB-, or equivalent, or better), and such rating from
any rating agency is within the Change of Control Period either downgraded to a non-investment
grade credit rating (Ba1/BB+, or equivalent, or worse) or withdrawn and is not within the Change
of Control Period subsequently (in the case of a downgrade) upgraded or (in the case of a
withdrawal) reinstated to an investment grade credit rating by such rating agency; or

(B) a non-investment grade credit rating (Ba1/BB+, or equivalent, or worse), and such rating from
any rating agency is within the Change of Control Period downgraded by one or more notches (for
illustration, Ba1/BB+ to Ba2/BB being one notch) or withdrawn and
is not within the Change of Control Period subsequently (in the case of a downgrade) upgraded or
(in the case of a withdrawal) reinstated to its earlier credit rating or better by such rating
agency; or

(C) no credit rating, and no rating agency assigns within the Change of Control Period an
investment grade credit rating to the Notes,

provided that if on the Relevant Announcement Date the Notes carry a credit rating from more than
one rating agency, at least one of which is investment grade, then sub-paragraph (A) will apply;
and provided further that in making the relevant decision(s) referred to in (ii) above, the
relevant rating agency announces publicly or confirms (having been so requested in writing by the
Issuer) in writing to the Issuer that such decision(s) resulted, in whole or in part, from the
occurrence of the Change of Control.

If the rating designations employed by any of Fitch, Moody’s or S&P are changed from those which
are described in paragraph (ii) of the definition of “Put Event” above, or if a rating is procured
from a Substitute Rating Agency, the Issuer shall determine the rating designations of Fitch,
Moody’s or S&P or such Substitute Rating Agency (as appropriate) as are most equivalent to the
prior rating designations of Fitch, Moody’s or S&P and this Condition 7(4) shall be read
accordingly.

For the purposes of this Condition 7(4):

Change of Control Period means the period commencing on the Relevant Announcement Date and ending
90 days after the Change of Control (or such longer period for which the Notes are under
consideration (such consideration having been announced publicly within the period ending 90 days
after the Change of Control) for rating review or, as the case may be, rating by a rating agency,
such period not to exceed 60 days after the public announcement of such consideration); and

Relevant Potential Change of Control Announcement means any public announcement or statement by the
Issuer, any actual or potential bidder or any adviser thereto relating to any potential Change of
Control where within 180 days following the date of such announcement or statement, a Change of
Control occurs.

The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of the
Exchange Act of 1934 and any other securities laws or regulations in connection with

33

 

the repurchase of Notes as a result of a Change of Control. To the extent that the
provisions of any securities laws or regulations conflict with the Change of Control
provisions of the Notes, the Issuer will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the Change of
Control provisions of these Notes by virtue of such compliance.

(5) Purchases

The Issuer or any of its Subsidiaries may at any time purchase Notes in any manner and at
any price. If purchases are made by tender, tenders must be available to all Noteholders alike.

(6) Cancellations

All Notes which are (a) redeemed or (b) purchased by or on behalf of the Issuer or any of its
Subsidiaries will forthwith be cancelled, and accordingly may not be reissued or resold.

(7) Notices Final

Upon the expiry of any notice as is referred to in paragraph (2) above the Issuer shall be
bound to redeem the Notes to which the notice refers in accordance with the terms of such
paragraph.

8. PAYMENT OF ADDITIONAL INTEREST

The Issuer will, subject to the exceptions and limitations set forth below, pay as additional
interest to a Noteholder that is a United States Alien (as defined below) such amounts as may be
necessary so that every net payment on such Note after deduction or withholding for or on account
of any present or future tax, assessment or other governmental charge of whatever nature imposed
upon or as a result of such payment by the United States (or any political subdivision or taxing
authority thereof or therein), will not be less than the amount provided for in such Note to be
then due and payable. However, the Issuer, as the case may be, will not be required to make any
payment of additional interest for or on account of:

(a) any tax, assessment or other governmental charge that would not have been imposed but for (i)
the existence of any present or former connection between such holder (or between a fiduciary,
settlor or beneficiary of, or a person holding a power over, such holder, if such holder is an
estate or a trust, or a member or shareholder of such holder, if such holder is a partnership or
corporation) and the United States, including, without limitation, such holder (or such
fiduciary, settlor, beneficiary, person holding a power, member or shareholder) being or having
been a citizen or resident or treated as a resident thereof or being or having been engaged in
trade or business or present therein or having or having had a permanent establishment therein,
or (ii) the presentation by the holder of a Note for payment more than 15 days after the date on
which such payment became due and payable or on which payment thereof was duly provided for,
whichever occurs later;

(b) any estate, inheritance, gift, sales, transfer, personal property or any similar tax,
assessment or other governmental charge;

(c) any tax, assessment or other governmental charge that would not have been imposed but for
such holder’s past or present status as a personal holding company, foreign personal holding
company, controlled foreign corporation, passive foreign investment company (including a
qualified election fund) or foreign private foundation or other tax exempt organization with
respect to the United States or as a corporation that accumulates earnings to avoid United States
Federal income tax;

(d) any tax, assessment or other governmental charge that is payable otherwise than by
deduction or withholding from a payment on a Note;

34

 

(e) any tax, assessment or other governmental charge required to be deducted or withheld by
any Paying Agent from any payment on a Note, if such payment can be made without such deduction
or withholding by any other Paying Agent;

(f) any tax, assessment or other governmental charge that would not have been imposed but for the
holder’s failure to comply with any applicable certification, information, documentation or other
reporting requirement concerning the nationality, residence, identity or connection with the
United States of the holder or beneficial owner of a Note if, without regard to any tax treaty,
such compliance is required by statute or regulation of the United States as a precondition to
relief or exemption from such tax, assessment or other governmental charge;

(g) any tax, assessment or other governmental charge imposed by reason of the holder (i) owning or having owned, directly or indirectly, actually or constructively, 10 per cent or
more of the total combined voting power of all classes of stock of the Issuer entitled to vote,
(ii) receiving interest described in Section 881(c)(3)(A) of the United States Internal Revenue
Code or (iii) being a controlled foreign corporation with respect to the United States that is
related to the Issuer by actual or constructive stock ownership; or

(h) any combination of items (a), (b), (c), (d), (e), (f) and (g);

nor shall such additional interest be paid with respect to any payment on a Note to a holder that
is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent
a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner would not have been entitled to the additional interest had such beneficiary,
settlor, member or beneficial owner been the holder of such Note.

For purposes of the foregoing, the holding of or the receipt of any payment with respect to a Note
shall not constitute a connection between the holder (or between a fiduciary, settlor, beneficiary,
member or shareholder of, or a person having power over, such holder if such holder is an estate, a
trust, a partnership or a corporation) and the United States.

The term United States Alien means any person who, for United States Federal income tax purposes,
is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a
foreign estate or trust, or a foreign partnership one or more of the members of which is, for
United States Federal income tax purposes, a foreign corporation, a non-resident alien individual
or a non-resident alien fiduciary of a foreign estate or trust.

9. PRESCRIPTION

Under New York’s statute of limitations, any legal action upon the Notes must be commenced within
six years after the payment thereof is due. Thereafter, Notes will become generally unenforceable.

10. EVENTS OF DEFAULT

An event of default (Event of Default) will occur under the Notes if:

(a) the Issuer fails to pay the principal of any of the Notes when due; or

(b) the Issuer fails to pay interest (including any additional interest referred to in Condition
8) for 30 days after the date when due; or

(c) the Issuer fails to perform or observe any other term, covenant or agreement contained in the
Agency Agreement or the Notes for 30 days after written notice thereof to the Issuer and the
Fiscal Agent by the holders of at least 25 per cent in aggregate principal amount of the Notes
then outstanding; or

(d) the Issuer fails to fulfil within 30 days from its due date, as extended by any
applicable grace or cure period, any payment obligation of interest or principal under any
existing Debt,

35

 

the aggregate principal amount of which exceeds $100,000,000, and such failure continues for
10 days after receipt of notice of such default by the Issuer, as specified in the Agency
Agreement; or

(e) certain events of bankruptcy, insolvency or reorganisation with respect to the Issuer shall
have occurred.

If an Event of Default shall have occurred and be continuing, any Noteholder, by written notice to
the Issuer and the Fiscal Agent, may identify the applicable Event or Events of Default, declare
the principal of its Note or Notes, together with accrued interest and additional amounts, if any,
to be due and payable immediately, whereupon such amounts shall become due and payable immediately,
unless prior to the receipt of such notice by the Issuer that all such Events of Default have been
cured. Upon any such declaration being made, interest shall continue to accrue on the Note or Notes
affected by such declaration until the Notes shall be paid in full or until the seventh day after
the date upon which notice is duly given to the applicable Noteholders in accordance with Condition
12 that the principal amount of such Notes together with accrued interest and additional amounts
thereon has been duly paid in full to the Fiscal Agent (provided that sufficient funds have
actually been received and are available for such purpose), whichever is earlier.

11. REPLACEMENT OF CERTIFICATES

Should any Certificate be lost, stolen, mutilated, defaced or destroyed it may be replaced at the
specified office of the Registrar, upon payment by the claimant of the expenses incurred in
connection with the replacement and on such terms as to evidence and indemnity as the Issuer may
reasonably require. Mutilated or defaced Certificates must be surrendered before replacements will
be issued.

12. NOTICES

All notices to the Noteholders will be valid if mailed to them at their respective addresses
in the register of Noteholders maintained by the Registrar and published in a leading English
language daily newspaper published in London or such other English language daily newspaper with
general circulation in Europe as the Issuer may decide and, so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of that Exchange so require, published in a daily newspaper
in Luxembourg or on the website of the Luxembourg Stock Exchange, www.bourse.lu. It is expected
that publication will normally be made in the Financial Times and the d’Wort. The Issuer shall also
ensure that notices are duly published in a manner which complies with the rules and regulations of
any stock exchange on which the Notes are for the time being listed. Any notice shall be deemed to
have been given on the second day after being so mailed or on the date of publication or, if so
published more than once or on different dates, on the date of the first publication, and in the
case of publication on the website of the Luxembourg Stock Exchange, on the date of such
publication.

13. MEETINGS OF NOTEHOLDERS AND MODIFICATION

(1) Provisions for Meetings

The Agency Agreement contains provisions for convening meetings of the Noteholders to
consider any matter affecting their interests, including the modification by Extraordinary
Resolution of these Conditions or the provisions of the Agency Agreement. The quorum at any
meeting for passing an Extraordinary Resolution will be one or more persons present holding or
representing in aggregate more than 50 per cent, in principal amount of the Notes for the time
being outstanding, or at any adjourned meeting one or more persons present whatever the principal
amount of the Notes held or represented by him or them, except that at any meeting the business
of which includes the modification of certain of these Conditions the necessary quorum for
passing an Extraordinary Resolution will be one or more persons present

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holding or representing in aggregate not less than one half, or at any adjourned meeting
not less than one quarter, of the principal amount of the Notes for the time being outstanding.
An Extraordinary Resolution passed at any meeting of the Noteholders will be binding on all
Noteholders, whether or not they are present at the meeting.

(2) Modification

The Fiscal Agent may agree, without the consent of the Noteholders, to any modification of
any of these Conditions or any of the provisions of the Agency Agreement either (i) for the
purpose of curing any ambiguity or of curing, correcting or supplementing any defective provision
contained herein or therein or (ii) in any manner which is not materially prejudicial to the
interests of the Noteholders. Any modification shall be binding on the Noteholders and, unless
otherwise agreed by the Fiscal Agent (which agreement shall not be unreasonably withheld or
delayed), any modification shall be notified by the Issuer to the Noteholders as soon as
practicable thereafter in accordance with Condition 12.

14. FURTHER ISSUES

The Issuer may from time to time without the consent of the Noteholders create and issue
further notes, having terms and conditions the same as those of the Notes, or the same except for
the amount of the first payment of interest, which may be consolidated and form a single series
with the outstanding Notes.

15. CONSOLIDATION, MERGER OR TRANSFER

The Issuer may without the consent of the Noteholders, merge or consolidate with any other
corporation or dispose of all or substantially all of its assets to any other corporation, provided
that the successor corporation assumes all obligations of the Issuer under the Notes and the Agency
Agreement and certain other conditions set forth therein are met.

16. GOVERNING LAW

(1) Governing Law

The Agency Agreement and the Notes are governed by, and will be construed in accordance
with, the laws of the State of New York.

(2) Jurisdiction

Any State or federal courts sitting in the Borough of Manhattan, the City of New York shall
have non-exclusive jurisdiction to adjudicate any disputes which may arise out of or in
connection with the Notes or the Agency Agreement and accordingly any legal action or proceedings
arising out of or in connection with the Notes or the Agency Agreement (Proceedings) may be
brought in such courts. The Issuer and the Paying Agents have in the Agency Agreement irrevocably
submitted to the non-exclusive jurisdiction of such courts and waived any objection which it may
now or hereafter have to Proceedings in any such courts whether on the ground of the laying of
venue or on the ground that the Proceedings have been brought in an inconvenient form.

(3) Waiver of Jury Trial

The Issuer and the Paying Agents have in the Agency Agreement waived, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in any legal proceeding
directly or indirectly arising out of or relating to the Agency Agreement or any Note (whether
based on contract, tort or any other theory). Each of the Issuer and each of the Paying Agents,
therein (a) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the event of

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Proceedings, seek to enforce the foregoing waiver and (b) acknowledges that it and the other
parties to the Agency Agreement have been induced to enter in the Agency Agreement by, among
other things, the mutual waivers and certifications in this section.

(4) Waiver of Immunity

To the extent that any of the Issuer and the Paying Agents have or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process with respect to itself or its
property, the Issuer and the Paying Agents have in the Agency Agreement irrevocably waived such
immunity in respect of their obligations under the Agency Agreement or under any Note.

(5) Service of Process

The Issuer has agreed in the Agency Agreement that the process by which any Proceedings in New
York City are begun may be served on it by being delivered to it at its offices at 650 Madison
Avenue, New York NY10022. If the appointment of the person appointed to receive process on behalf
of the Issuer ceases to be effective, the Issuer shall forthwith appoint a further person in the
State of New York to accept service of process on its behalf and notify the name and address of
such person to the Fiscal Agent and, failing such appointment within 15 days, the Fiscal Agent
shall be entitled to appoint such a person by written notice addressed and delivered to the
Issuer.

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SCHEDULE 3

PROVISIONS FOR MEETINGS OF NOTEHOLDERS

DEFINITIONS

	1.	 	As used in this Schedule the following expressions shall have the following meanings unless
the context otherwise requires:
	 
	 	 	Block Voting Instruction means, in relation to any meeting, an English language document
issued by a Paying Agent in which:

	 	(a)	 	it is certified that on the date thereof Notes represented by the Global
Certificate or Certificates which are held in an account with any Clearing System (in
each case not being Notes in respect of which a Voting Certificate has been issued and
is outstanding in respect of the meeting specified in such Block Voting Instruction)
are blocked in an account with a Clearing System and that no such Notes will cease to
be so blocked until the first to occur of:

	 	(i)	 	the conclusion of the meeting specified in such Block Voting
Instruction; and
	 
	 	(ii)	 	the Notes ceasing with the agreement of the Paying Agent to be
so blocked and the giving of notice by the Paying Agent to the Issuer in
accordance with paragraph 3(E) of the necessary amendment to the Block Voting
Instruction;

	 	(b)	 	it is certified that each holder of such Notes has instructed such Paying Agent
that the vote(s) attributable to the Notes so blocked should be cast in a particular
way in relation to the resolution(s) to be put to such meeting and that all such
instructions are, during the period commencing 48 Hours prior to the time for which
such meeting is convened and ending at the conclusion or adjournment thereof, neither
revocable nor capable of amendment;
	 
	 	(c)	 	the aggregate principal amount of the Notes so deposited or held or blocked is
listed distinguishing with regard to each such resolution between those in respect of
which instructions have been given that the votes attributable thereto should be cast
in favour of the resolution and those in respect of which instructions have been so
given that the votes attributable thereto should be cast against the resolution; and
	 
	 	(d)	 	one or more persons named in such Block Voting Instruction (each hereinafter
called a proxy) is or are authorised and instructed by such Paying Agent to cast the
votes attributable to the Notes so listed in accordance with the instructions referred
to in (c) above as set out in such Block Voting Instruction;

Certificate means, for the purpose of this Annex 3, a Note in definitive form;

Chairman means, in relation to any meeting, the individual who takes the chair in
accordance with paragraph 6;

Clearing System means Euroclear and/or Clearstream, Luxembourg and includes in respect of
any Note any clearing system on behalf of which such Note is held or which is the holder or
(directly or through a nominee) registered owner of a Note, in either case whether alone or
jointly with any other Clearing System(s).

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Eligible Person means any one of the following persons who shall be entitled to attend and vote at
a meeting:

	(a)	 	a holder of a Certificate which is not held in an account with any Clearing System;
	 
	(b)	 	a bearer of any Voting Certificate;
	 
	(c)	 	a proxy specified in any Block Voting Instruction; and
	 
	(d)	 	a proxy appointed by a holder of a Certificate which is not held in an account with any
Clearing System;

Extraordinary Resolution means:

	(a)	 	a resolution passed at a meeting duly convened and held in accordance with these presents by
a majority consisting of not less than three-fourths of the Eligible Persons voting thereat
upon a show of hands or, if a poll is duly demanded, by a majority consisting of not less than
three-fourths of the votes cast on such poll; or

	(b)	 	a resolution in writing signed by or on behalf of the holders of not less than three fourths
in principal amount of the Notes which resolution may be contained in one document or in
several documents in like form each signed by or on behalf of one or more of the holders;

Identified Person means, in relation to paragraph 3(A) of this Annex 3, a person named to collect
the Voting Certificate and attend and vote at the meeting;

Ordinary Resolution means:

	(a)	 	a resolution passed at a meeting duly convened and held in accordance with these presents by
a clear majority of the Eligible Persons voting thereat on a show of hands or, if a poll is
duly demanded, by a simple majority of the votes cast on such poll; or

	(b)	 	a resolution in writing signed by or on behalf of the holders of not less than a clear
majority in principal amount of the Notes, which resolution may be contained in one document
or in several documents in like form each signed by or on behalf of one or more of the
holders;

Voting Certificate means, in relation to a meeting, an English language certificate issued by a
Paying Agent in which it is stated:

	(a)	 	that on the date thereof Notes represented by the Global Certificate or Certificates which
are held in an account with any Clearing System (in each case not being Notes in respect of
which a Block Voting Instruction has been issued and is outstanding in respect of the meeting
specified in such Voting Certificate) are blocked in an account with a Clearing System and
that no such Notes will cease to be so blocked until the first to occur of:

	 	(i)	 	the conclusion of the meeting specified in such Voting Certificate; and
	 
	 	(ii)	 	the surrender of the Voting Certificate to the Paying Agent who issued
the same; and

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	 	(b)	 	that the bearer thereof is entitled to attend and vote at such meeting
in respect of the Notes represented by such Voting Certificate;

24 Hours means a period of 24 hours including all or part of a day upon which banks are
open for business in both the place where the relevant meeting is to be held and in each
of the places where the Paying Agents have their specified offices (disregarding for this
purpose the day upon which such meeting is to be held) and such period shall be extended
by one period or, to the extent necessary, more periods of 24 hours until there is
included as aforesaid all or part of a day upon which banks are open for business in all
of the places as aforesaid; and

48 Hours means a period of 48 hours including all or part of two days upon which banks are
open for business both in the place where the relevant meeting is to be held and in each
of the places where the Paying Agents have their specified offices (disregarding for this
purpose the day upon which such meeting is to be held) and such period shall be extended
by one period or, to the extent necessary, more periods of 24 hours until there is
included as aforesaid all or part of two days upon which banks are open for business in
all of the places as aforesaid.

For the purposes of calculating a period of Clear Days in relation to a meeting, no
account shall be taken of the day on which the notice of such meeting is given (or, in the
case of an adjourned meeting, the day on which the meeting to be adjourned is held) or the
day on which such meeting is held.

All references in this Schedule to a “meeting” shall, where the context so permits, include
any relevant adjourned meeting.

EVIDENCE OF ENTITLEMENT TO ATTEND AND VOTE

	2.	 	A holder of a Note represented by the Global Certificate or a Certificate which is held in an
account with any Clearing System may require the issue by a Paying Agent of Voting
Certificates and Block Voting Instructions in accordance with the terms of paragraph 3.
	 
	 	 	For the purposes of paragraph 3, the Registrar, Fiscal Agent and each Paying Agent shall be
entitled to rely, without further enquiry, on any information or instructions received from
a Clearing System and shall have no liability to any holder or other person for any loss,
damage, cost, claim or other liability occasioned by its acting in reliance thereon, nor
for any failure by a Clearing System to deliver information or instructions to the
Registrar, Fiscal Agent or any Paying Agent.
	 
	 	 	The holder of any Voting Certificate or the proxies named in any Block Voting Instruction
shall for all purposes in connection with the relevant meeting be deemed to be the holder
of the Notes to which such Voting Certificate or Block Voting Instruction relates.

PROCEDURE FOR ISSUE OF VOTING CERTIFICATES, BLOCK VOTING INSTRUCTIONS
AND PROXIES

	3.	(A)		Global Certificate and Certificates held in a Clearing System — Voting Certificate
	 
	 	 	 	A holder of a Note (not being a Note in respect of which instructions have been
given to the Principal Paying Agent in accordance with paragraph 3(B)) represented
by the Global Certificate or which is in definitive form and is held in an account
with any Clearing System may procure the delivery of a Voting Certificate in
respect of such Note by giving notice to the Clearing System through which such
holder’s interest in the Note is held specifying an Identified Person (which need
not be the holder

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	 	 	 	himself. The relevant Voting Certificate will be made available at or shortly prior to the
commencement of the meeting by the Fiscal Agent against presentation by such Identified
Person of the form of identification previously notified by such holder to the Clearing
System. The Clearing System may prescribe forms of identification (including, without
limitation, a passport or driving licence) which it deems appropriate for these purposes.
Subject to receipt by the Fiscal Agent from the Clearing System, no later than 24 Hours
prior to the time for which such meeting is convened, of notification of the principal
amount of the Notes to be represented by any such Voting Certificate and the form of
identification against presentation of which such Voting Certificate should be released,
the Principal Paying Agent shall, without any obligation to make further enquiry, make
available Voting Certificates against presentation of the form of identification
corresponding to that notified.
	 
	 	(B)	 	Global Certificate and Certificates held in a Clearing System  —  Block Voting
Instruction
	 
	 	 	 	A holder of a Note (not being a Note in respect of which a Voting Certificate has
been issued) represented by the Global Certificate or which is in definitive form and is
held in an account with any Clearing System may require the Fiscal Agent to issue a Block
Voting Instruction in respect of such Note by first instructing the Clearing System
through which such holder’s interest in the Note is held to procure that the votes
attributable to such Note should be cast at the meeting in a particular way in relation to
the resolution or resolutions to be put to the meeting. Any such instruction shall be
given in accordance with the rules of the Clearing System then in effect. Subject to
receipt by the Fiscal Agent of instructions from the Clearing System, no later than 24
Hours prior to the time for which such meeting is convened, of notification of the
principal amount of the Notes in respect of which instructions have been given and the
manner in which the votes attributable to such Notes should be cast, the Fiscal Agent
shall, without any obligation to make further enquiry, appoint a proxy to attend the
meeting and cast votes in accordance with such instructions.
	 
	 	(C)	 	Definitive Certificates not held in a Clearing System — appointment of proxy

	 	(i)	 	A holder of Notes in definitive form and not held in an account with any Clearing
System may, by an instrument in writing in the English language (a form of proxy)
signed by the holder or, in the case of a corporation, executed under its common seal
or signed on its behalf by an attorney or a duly authorised officer of the
corporation and delivered to the specified office of the Registrar or the Transfer
Agent not less than 48 Hours before the time fixed for the relevant meeting, appoint
any person (a proxy) to act on his or its behalf in connection with any meeting.
	 
	 	(ii)	 	Any proxy appointed pursuant to subparagraph (i) above shall so long as such
appointment remains in force be deemed, for all purposes in connection with the
relevant meeting, to be the holder of the Notes to which such appointment relates and
the holders of the Notes shall be deemed for such purposes not to be the holder.

	 	(D)	 	Each Block Voting Instruction, and each form of proxy shall be deposited by the relevant
Paying Agent or (as the case may be) by the Registrar or the Transfer Agent at such place as
the Fiscal Agent shall approve not less than 24 Hours before the time appointed for holding
the meeting at which the proxy or proxies named in the Block Voting Instruction or form of
proxy proposes to vote, and in default the Block Voting

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	 	 	 	Instruction or form of proxy shall not be treated as valid unless the Chairman of
the meeting decides otherwise before such meeting proceeds to business. A
notarially certified copy of each Block Voting Instruction and form of proxy shall
(if so requested by the Issuer) be deposited with the Issuer before the
commencement of the meeting but the Issuer shall not thereby be obliged to
investigate or be concerned with the validity of or the authority of the proxy or
proxies named in any such Block Voting Instruction or form of proxy.
	 
	 	(E)	 	Any vote given in accordance with the terms of a Block Voting Instruction or
form of proxy shall be valid notwithstanding the previous revocation or amendment of
the Block Voting Instruction or form of proxy or of any of the instructions of the
relevant holder or the relevant Clearing System (as the case may be) pursuant to which
it was executed provided that no intimation in writing of such revocation or amendment
has been received from the relevant Paying Agent (in the case of a Block Voting
Instruction) or from the holder thereof (in the case of a proxy appointed pursuant to
paragraph 3(C)) by the Issuer at its registered office (or such other place as may
have been required or approved by the Fiscal Agent for the purpose) by the time being
24 Hours (in the case of a Block Voting Instruction) or 48 Hours (in the case of a
proxy) before the time appointed for holding the meeting at which the Block Voting
Instruction or form of proxy is to be used.

CONVENING OF MEETINGS, QUORUM AND ADJOURNED MEETINGS

	4.	 	The Issuer may at any time, and the Issuer shall upon a requisition in writing in the English
language signed by the holders of not less than ten per cent, in principal amount of the Notes
for the time being outstanding, convene a meeting and if the Issuer makes default for a period
of seven days in convening such a meeting the same may be convened by the relevant
Noteholders. Whenever the Issuer is about to convene any such meeting the Issuer shall
forthwith give notice in writing to the Fiscal Agent of the day, time and place thereof and of
the nature of the business to be transacted thereat. Every such meeting shall be held at such
time and place as the Fiscal Agent may appoint or approve in writing.

	5.	 	At least 21 Clear Days’ notice specifying the place, day and hour of meeting shall be given
to the holders prior to any meeting in the manner provided by Condition 12. Such notice, which
shall be in the English language, shall state generally the nature of the business to be
transacted at the meeting thereby convened and, in the case of an Extraordinary Resolution,
shall either specify in such notice the terms of such resolution or state fully the effect on
the holders of such resolution, if passed. Such notice shall include statements as to the
manner in which holders may arrange for Voting Certificates or Block Voting Instructions to be
issued and, if applicable, appoint proxies. A copy of the notice shall be sent by post to the
Issuer (unless the meeting is convened by the Issuer).

	6.	 	A person (who may but need not be a holder) nominated in writing by the Issuer shall be
entitled to take the chair at the relevant meeting, but if no such nomination is made or if at
any meeting the person nominated shall not be present within 15 minutes after the time
appointed for holding the meeting the holders present shall choose one of their number to be
Chairman, failing which the Issuer may appoint a Chairman. The Chairman of an adjourned
meeting need not be the same person as was Chairman of the meeting from which the adjournment
took place.

	7.	 	At any such meeting one or more Eligible Persons present and holding or representing in the
aggregate not less than one-twentieth of the principal amount of the Notes for the time being
outstanding shall (except for the purpose of passing an Extraordinary Resolution) form a

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	 	 	quorum for the transaction of business (including the passing of an Ordinary Resolution)
and no business (other than the choosing of a Chairman) shall be transacted at any meeting
unless the requisite quorum be present at the commencement of the relevant business. The
quorum at any such meeting for passing an Extraordinary Resolution shall (subject as
provided below) be one or more Eligible Persons present and holding or representing in the
aggregate more than 50 per cent, in principal amount of the Notes for the time being
outstanding PROVIDED THAT at any meeting the business of which includes any of the
following matters (each of which shall only be capable of being effected after having been
approved by Extraordinary Resolution) namely:

	 	(a)	 	modification of the maturity date of the Notes or reduction or cancellation
of the principal amount payable at maturity; or
	 
	 	(b)	 	reduction or cancellation of the amount payable or modification of the
payment date in respect of any interest in respect of the Notes or variation of the
method of calculating the rate of interest in respect of the Notes; or
	 
	 	(c)	 	modification of the currency in which payments under the Notes are to be made; or
	 
	 	(d)	 	modification of the majority required to pass an Extraordinary Resolution; or

	 
	 	(e)	 	the sanctioning of any scheme or proposal described in subparagraph 19(f); or

	 
	 	(f)	 	alteration of this proviso or the proviso to paragraph 8 below,

	 	 	the quorum shall be one or more Eligible Persons present and holding or representing in the
aggregate not less than two-thirds of the principal amount of the Notes for the time being
outstanding.

	8.	 	If within 15 minutes (or such longer period not exceeding 30 minutes as the Chairman may
decide) after the time appointed for any such meeting a quorum is not present for the
transaction of any particular business, then, subject and without prejudice to the transaction
of the business (if any) for which a quorum is present, the meeting shall if convened upon the
requisition of holders be dissolved. In any other case it shall stand adjourned to the same
day in the next week (or if such day is a public holiday the next succeeding business day) at
the same time and place (except in the case of a meeting at which an Extraordinary Resolution
is to be proposed in which case it shall stand adjourned for such period, being not less than
13 Clear Days nor more than 42 Clear Days, and to such place as may be appointed by the
Chairman either at or subsequent to such meeting and approved by the Fiscal Agent). If within
15 minutes (or such longer period not exceeding 30 minutes as the Chairman may decide) after
the time appointed for any adjourned meeting a quorum is not present for the transaction of
any particular business, then, subject and without prejudice to the transaction of the
business (if any) for which a quorum is present, the Chairman may either (with the approval of
the Fiscal Agent) dissolve such meeting or adjourn the same for such period, being not less
than 13 Clear Days (but without any maximum number of Clear Days), and to such place as may be
appointed by the Chairman either at or subsequent to such adjourned meeting and approved by
the Fiscal Agent, and the provisions of this sentence shall apply to all further adjourned
such meetings.

	9.	 	At any adjourned meeting one or more Eligible Persons present (whatever the principal amount
of the Notes so held or represented by them) shall (subject as provided below) form a quorum
and shall have power to pass any resolution and to decide upon all matters which could
properly have been dealt with at the meeting from which the adjournment took place

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	 	 	had the requisite quorum been present PROVIDED THAT at any adjourned meeting the quorum for
the transaction of business comprising any of the matters specified in the proviso to
paragraph 7 shall be one or more Eligible Persons present and holding or representing in
the aggregate not less than one-third of the principal amount of the Notes for the time
being outstanding.

	10.	 	Notice of any adjourned meeting at which an Extraordinary Resolution is to be submitted shall
be given in the same manner as notice of an original meeting but as if 10 were substituted for
21 in paragraph 5 and such notice shall state the required quorum. Subject as aforesaid it
shall not be necessary to give any notice of an adjourned meeting.

CONDUCT OF BUSINESS AT MEETINGS

	11.	 	Every question submitted to a meeting shall be decided in the first instance by a show of
hands. A poll may be demanded (before or on the declaration of the result of the show of
hands) by the Chairman, the Issuer or any Eligible Person (whatever the amount of the Notes so
held or represented by him).

	12.	 	At any meeting, unless a poll is duly demanded, a declaration by the Chairman that a
resolution has been carried or carried by a particular majority or lost or not carried by a
particular majority shall be conclusive evidence of the fact without proof of the number or
proportion of the votes recorded in favour of or against such resolution.

	13.	 	Subject to paragraph 15, if at any such meeting a poll is so demanded it shall be taken in
such manner and, subject as hereinafter provided, either at once or after an adjournment as
the Chairman directs and the result of such poll shall be deemed to be the resolution of the
meeting at which the poll was demanded as at the date of the taking of the poll. The demand
for a poll shall not prevent the continuance of the meeting for the transaction of any
business other than the motion on which the poll has been demanded.

	14.	 	The Chairman may, with the consent of (and shall if directed by) any such meeting, adjourn
the same from time to time and from place to place; but no business shall be transacted at any
adjourned meeting except business which might lawfully have been transacted at the meeting
from which the adjournment took place.

	15.	 	Any poll demanded at any such meeting on the election of a Chairman or on any question of
adjournment shall be taken at the meeting without adjournment.

	16.	 	Any director or officer of the Issuer, its lawyers and financial advisors, any director or
officer of any of the Paying Agents and any other person authorised so to do by the Fiscal
Agent may attend and speak at any meeting. Save as aforesaid, no person shall be entitled to
attend and speak nor shall any person be entitled to vote at any meeting unless he is an
Eligible Person. No person shall be entitled to vote at any meeting in respect of Notes which
are deemed to be not outstanding by virtue of the proviso to the definition of “outstanding”
in clause 2.1 of the Agency Agreement.

	17.	 	At any meeting:

	 	(a)	 	on a show of hands every Eligible Person present shall have one vote; and
	 
	 	(b)	 	on a poll every Eligible Person present shall have one vote in respect of each
EUR 1.00 in principal amount of the Notes held or represented by such Eligible Person.

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	 	 	Without prejudice to the obligations of the proxies named in any Block Voting Instruction
or form of proxy, any Eligible Person entitled to more than one vote need not use all his
votes or cast all the votes to which he is entitled in the same way.

	18.	 	The proxies named in any Block Voting Instruction or form of proxy need not be holders.
Nothing herein shall prevent any of the proxies named in any Block Voting Instruction or form
of proxy from being a director, officer or representative of or otherwise connected with the
Issuer.
	 
	19.	 	A meeting shall in addition to the powers hereinbefore given have the following powers
exercisable only by Extraordinary Resolution (subject to the provisions relating to quorum
contained in paragraphs 7 and 9) namely:

	 	(a)	 	power to approve any compromise or arrangement proposed to be made between
the Issuer and Noteholders or any of them;
	 
	 	(b)	 	power to approve any abrogation, modification, compromise or arrangement in
respect of the rights of the Noteholders against the Issuer or against any of its
property whether these rights arise under this Agreement, the Notes or otherwise;
	 
	 	(c)	 	power to agree to any modification of the provisions contained in this
Agreement or the Conditions, the Notes which is proposed by the Issuer;
	 
	 	(d)	 	power to give any authority or approval which under the provisions of this
Schedule or the Notes is required to given by Extraordinary Resolution;
	 
	 	(e)	 	power to appoint any persons (whether Noteholders or not) as a committee or
committees to represent the interests of the Noteholders and to confer upon any
committee or committees any powers or discretions which the Noteholders could
themselves exercise Extraordinary Resolution;
	 
	 	(f)	 	power to approve any scheme or proposal for the exchange or sale of the Notes
for, or the conversion of the Notes into, or the cancellation of the Notes in
consideration of, shares, stock, notes, bonds, debentures, debenture stock and/or
other obligations and/or securities of Issuer or any other company formed or to be
formed, or for or into or in consideration of cash, or partly for or into or in
consideration of shares, stock, notes, bonds, debentures, debenture stock and/or other
obligations and/or securities as stated above and partly for or into or in
consideration of cash; and
	 
	 	(g)	 	power to approve the substitution of any entity in place of the Issuer (or
any previous substitute) as the principal debtor in respect of the Notes.

	20.	 	Any resolution passed at a meeting of the holders duly convened and held in accordance with
these presents shall be binding upon all the holders whether or not present or whether or not
represented at such meeting and whether or not voting and each of them shall be bound to give
effect thereto accordingly and the passing of any such resolution shall be conclusive evidence
that the circumstances justify the passing thereof. Notice of the result of the voting on any
resolution duly considered by the holders shall be published in accordance with Condition 12
by the Issuer within 14 days of such result being known, PROVIDED THAT the non-publication of
such notice shall not invalidate such result.

	21.	 	Minutes of all resolutions and proceedings at every meeting shall be made and entered in
books to be from time to time provided for that purpose by the Issuer and any such minutes as

46

 

	 	 	aforesaid, if purporting to be signed by the Chairman of the meeting at which such
resolutions were passed or proceedings transacted, shall be conclusive evidence of the
matters therein contained and, until the contrary is proved, every such meeting in respect
of the proceedings of which minutes have been made shall be deemed to have been duly held
and convened and all resolutions passed or proceedings transacted thereat to have been duly
passed or transacted.

	22.	 	Subject to all other provisions of these presents the Fiscal Agent may (after consultation
with the Issuer where the Fiscal Agent considers such consultation to be practicable but
without the consent of the Issuer, or the holders) prescribe such further or alternative
regulations regarding the requisitioning and/or the holding of meetings and attendance and
voting thereat as the Fiscal Agent may in its sole discretion reasonably think fit (including,
without limitation, the substitution for periods of 24 hours and 48 hours referred to in this
Schedule of shorter periods). Such regulations may, without prejudice to the generality of the
foregoing, reflect the practices and facilities of any relevant Clearing System. Notice of any
such further or alternative regulations may, at the sole discretion of the Fiscal Agent, be
given to holders in accordance with Condition 12 at the time of service of any notice
convening a meeting or at such other time as the Fiscal Agent may decide.

47

 

SCHEDULE 4

REGISTRATION AND TRANSFER OF NOTES

	1.	 	Each Note shall have an identifying serial number which shall be entered on the Register.
	 
	2.	 	The Notes are transferable in integral multiples of EUR 50,000 or in integral multiples of
EUR 1,000 in excess thereof each by execution of the form of transfer endorsed thereon under
the hand of the transferor or, where the transferor is a corporation, under its common seal or
under the hand of two of its officers duly authorised in writing. In this Schedule 5,
transferor shall, where the context permits or requires, include joint transferors and be
construed accordingly.
	 
	3.	 	The Notes to be transferred must be delivered for registration to the specified office of the
Transfer Agent with the form of transfer endorsed on the Notes duly completed and executed and
must be accompanied by the documents, evidence and information required pursuant to the
Conditions and such other evidence as the Issuer may reasonably require to prove the title of
the transferor or his right to transfer the Notes and, if the form of transfer is executed by
some other person on his behalf or in the case of the execution of a form of transfer on
behalf of a corporation by its officers, the authority of that person or those persons to do
so.
	 
	4.	 	The executors or administrators of a deceased holder of Notes (not being one of several joint
holders) and in the case of the death of one or more of several joint holders the survivor of
the joint holders shall be the only person or persons recognised by the Issuer as having any
title to the Notes.
	 
	5.	 	Any person becoming entitled to Notes in consequence of the death or bankruptcy of the holder
of such Notes may upon producing such evidence that he holds the position in respect of which
he proposes to act under this paragraph or of his title as the Issuer shall reasonably require
be registered himself as the holder of such Notes or, subject to the preceding paragraphs as
to transfer, may transfer such Notes. The Issuer shall be at liberty to retain any amount
payable upon the Notes to which any person is so entitled until the person shall be registered
as provided above or shall duly transfer the Notes.
	 
	6.	 	Unless otherwise requested by him and agreed by the Issuer, the holder of Notes shall be
entitled to receive only one Note in respect of his entire holding.
	 
	7.	 	The joint holders of Notes shall be entitled to one Note only in respect of their joint
holding which shall, except where they otherwise direct, be delivered to the joint holder
whose name appears first in the register of the holders of Notes in respect of the joint
holding.
	 
	8.	 	Where a holder of Notes has transferred part only of his holding there shall be delivered to
him without charge a Note in respect of the balance of the holding.
	 
	9.	 	The Issuer shall make no charge to the holders for the registration of any holding of Notes
or any transfer thereof or for the issue thereof or for the delivery of Notes at the specified
office of the Transfer Agent or by mail to the address specified by the Noteholder. If any
Noteholder entitled to receive a Note wishes to have the same delivered to him otherwise than
at the specified office of the Transfer Agent, the delivery shall be made, upon his written
request to the Transfer Agent, at his risk and (except where sent by mail to the address
specified by the Noteholder) at his expense.

48

 

	10.	 	The registered holder of a Note may (to the fullest extent permitted by all
applicable laws) be treated at all times, by all persons and for all purposes as the
absolute owner of such Note notwithstanding any notice any person may have of the right,
title, interest or claim of any other person. The Issuer shall not be bound to see to the
execution of any trust to which any Note may be subject and no notice of any trust shall be
entered on the register. The holder of a Note will be recognised by the Issuer as entitled
to his Note free from any equity, set-off or counterclaim on the part of the Issuer against
the original or any intermediate holder of the Note.

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SCHEDULE 5

FORM OF PUT NOTICE

FORM OF PUT NOTICE

POLO RALPH LAUREN CORPORATION

EUR 300,000,000 4.50 per cent. Notes due 2013

By depositing this duly completed Notice with any Paying Agent for the above Notes (the Notes) the
undersigned holder of the Notes surrendered with this Notice and referred to below irrevocably
exercises its option to have the nominal amount of the respective Notes redeemed in accordance with
Condition 7(4) as the Put Date (as defined in Condition 7(4) of the Notes).

This Notice relates to Notes in the aggregate nominal amount of                      bearing the following serial
numbers:

 

Payment Instructions

Please make payment in respect of the above-mentioned Notes by [cheque posted to the below
address/transfer to the following bank account]1:

	 	 	 
	[Bank:                                         

	 	Branch Address:                                         
	Branch Code:                                         

	 	Account Number:                                         
	/Address:                                         
	 	 
	Cheque made to payable to

	 	                                        ]1
	Signature of holder:                                         
	 	 

[To be completed by recipient Paying Agent]

Details of missing unmatured Coupons                                         

Received by:                                         

[Signature and stamp of Paying Agent]

At its office at:                                                               On:
                   

Notes:-

	1	 	 Delete as appropriate.

	N.B.	 	The Paying Agent with whom the above-mentioned Notes are deposited will not in any
circumstances be liable to the depositing Noteholder or any other person for any loss or
damage arising from any act, default or omission of such Paying Agent in relation to the said
Notes or any of them unless such loss or damage was caused by the fraud or negligence of such
Paying Agent or its directors, officers or employees.

This Put Notice is not valid unless all of the paragraphs requiring completion are duly completed.
Once validly given this Put Notice is irrevocable.

50

 

SIGNATORIES

POLO RALPH LAUREN CORPORATION

By: T. TRAVIS

DEUTSCHE BANK AG, LONDON BRANCH

By: C. RAKESTROW                      A. GARVEY

DEUTSCHE BANK LUXEMBOURG S.A.

By: S. HARDING                             S. CLERKIN

51

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