Document:

Exhibit 10.28

                                    TWO-TIER

                   NONEXCLUSIVE DISTRIBUTOR AGREEMENT BETWEEN

                              COMSTOR CORPORATION

                                      AND

                              CISCO SYSTEMS, INC.

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                               TABLE OF CONTENTS

ARTICLE I - SCOPE AND TERM OF AGREEMENT........................................3
ARTICLE II - DEFINITIONS ......................................................4
ARTICLE III PURCHASE ORDERS....................................................5
ARTICLE IV - SHIPPING AND DELIVERY OF PRODUCTS.................................6
ARTICLE V - PROPRIETARY RIGHTS AND SOFTWARE LICENSING..........................6
ARTICLE VI - LIMITED WARRANTY PROVISION .......................................7
ARTICLE VII - TRAINING.........................................................7
ARTICLE VIII -TRADEMARKS ......................................................7
ARTICLE IX - INVENTORY BALANCE.................................................8
ARTICLE X - RETURN OF DISCONTINUED/OBSOLETE PRODUCTS & DOA PRODUCTS ...........9
ARTICLE XI - QUALITY ..........................................................9
ARTICLE XII - PATENT AND COPYRIGHT INDEMNITY...................................9
ARTICLE XIII - SUPPORT .......................................................10
ARTICLE XIV - PAYMENT AND INVOICING ..........................................10
ARTICLE XV - CO-OP FUNDS .....................................................11
ARTICLE XVI - REPORTS AND RECORDS ............................................11
ARTICLE XVII -TERMINATION ....................................................11
ARTICLE XVIII - CONFIDENTIALITY ..............................................13
ARTICLE XIX - FORCE MAJEURE...................................................13
ARTICLE XX - EXPORT RESTRICTIONS .............................................14
ARTICLE XXI COMPLIANCE WITH LAWS..............................................14
ARTICLE XXII - LIMITATION OF LIABILITY .......................................14
ARTICLE XXIII - CONSEQUENTIAL DAMAGES WAIVER .................................15
ARTICLE XXIV - VALUE ADDED RESELLER...........................................15
ARTICLE XXV - MISCELLANEOUS ..................................................15
EXHIBIT A: PRODUCTS AND PRICING/PRODUCT SCHEDULES/QUARTERLY GOALS ............18
EXHIBIT B: TERRITORY .........................................................19
EXHIBIT C: MINIMUM TERMS AND CONDITIONS FOR DEALERS ..........................20
EXHIBIT D: THE CISCO-DISTRIBUTOR CO-OP PROGRAM ...............................21
EXHIBIT E: TWO-TIER DISTRIBUTION SUPPORT EXHIBIT .............................22
EXHIBIT F: COMSTOR'S REPORTING REQUIREMENTS ..................................27
EXHIBIT G: U.S. FEDERAL GOVERNMENT SALES......................................28
EXHIBIT H: SUBSIDIARY AGREEMENT ..............................................32
EXHIBIT l: CISCO'S STANDARD WARRANTY..........................................34
EXHIBIT J: GSA SCHEDULE AUTHORIZATION ........................................36

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                  TWO-TIER NONEXCLUSIVE DISTRIBUTOR AGREEMENT

THIS TWO TIER NONEXCLUSIVE DISTRIBUTOR AGREEMENT ("Agreement"), dated as of
June 15th, 1999 (the "Effective Date"), is between COMSTOR CORPORATION, a
Virginia corporation ("COMSTOR"), with its principal place of business at 14116
Newbrook Drive, Chantilly, VA 22021, and CISCO SYSTEMS, INC. ("Cisco"), a
California corporation with its principal place of business at 170 West Tasman
Drive, San Jose, California 95134 -1706.

                              W I T N E S S E T H:

     WHEREAS, COMSTOR desires to purchase certain Products from Cisco from time
to time;

     WHEREAS, Cisco desires to sell and license certain Products to COMSTOR in
accordance with the terms and conditions set forth in this Agreement; and

     WHEREAS, Cisco desires to appoint COMSTOR as its non-exclusive distributor
to market Products within the Territory defined below.

     NOW THEREFORE, in consideration of the mutual premises herein contained
and other good and valuable consideration, COMSTOR and Cisco hereby agree as
follows:

                    ARTICLE I - SCOPE AND TERM OF AGREEMENT

1.0 Appointment.

Cisco hereby appoints COMSTOR as a non-exclusive distributor of Products in the
Territory to Dealers, and COMSTOR hereby accepts that appointment. This
Agreement defines the terms and conditions under which COMSTOR may distribute
Products. COMSTOR agrees to use its best efforts to distribute Products solely
to Dealers in the Territory who sell to other Dealers and End Users also
located in the Territory.

1.1 Term of Agreement.

This Agreement shall commence on the date first set above and continue
thereafter for a period of one (1) year. This Agreement may be extended for
additional one (1) year periods upon mutual written agreement of Cisco and
COMSTOR.

1.2 Territory.

COMSTOR agrees not to solicit orders, engage salesmen, establish warehouses or
other distribution centers outside of the Territory, except to the extent
advertising is placed in a particular advertising media (except catalogs) which
is distributed both inside and outside the Territory.

1.3  U.S Federal Government Sales.

Cisco hereby grants COMSTOR, and COMSTOR hereby accepts, the non-exclusive
right to distribute Cisco Products to resellers and system integrators in
support of specific federal government contract opportunities.

The additional obligations of Cisco and COMSTOR for such U.S. federal
government sales are outlined in Exhibit G of this Agreement.

Attached hereto as Exhibit J, sets forth the terms under which Cisco Products
may be sold under Comstor's General Services Administration ("GSA") Multiple
Award Schedule ("MAS") contract.

Cisco will accept only the federal government contract flowdown provisions
identified in Exhibit G, Attachment 2, in any purchase order from COMSTOR.
Cisco will not accept any other flowdown provisions

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including, but not limited to, Federal Acquisition Regulation ("FAR"),
Department of Defense ("DOD") FAR Supplement ("DFARS"), or NASA FAR Supplement
("NFS") provisions. Any such flowdown provisions on COMSTOR's purchase orders
or supplementary documentation not specifically identified on Exhibit G are
invalid, notwithstanding Cisco's acceptance of such purchase orders or
supplementary documentation.

                            ARTICLE II - DEFINITIONS

Definitions. The following definitions shall apply to this Agreement.

     (a)  "Applicable Specification" shall mean the functional performance,
          operational and compatibility characteristics of a Product agreed
          upon in writing by the parties or, in the absence of an agreement, as
          described in applicable Documentation.

     (b)  "Bug Fix" means an error correction, patch or workaround for the
          Software which is provided by Cisco to COMSTOR in response to
          COMSTOR's request, or which Cisco chooses to provide to COMSTOR.

     (c)  "Dealer" means an authorized reseller or value added reseller of
          COMSTOR who has entered into a written contract with COMSTOR
          containing at a minimum the terms and conditions set forth at Exhibit
          C, and meeting Cisco's then-current guidelines for Dealers.

     (d)  "Documentation" shall mean user manuals, training materials, Product
          descriptions and specifications, technical manuals, license
          agreements, supporting materials and other printed information
          relating to the Products, whether distributed in print, electronic,
          CD-ROM, or video format, in effect as of the date of the
          applicable Purchase Order and incorporated therein by reference.

     (e)  "End Users" shall mean final retail purchasers or licensees who have
          acquired Products for their own internal use and not for resale,
          remarketing or redistribution.

     (f)  "Major Release" or "New Release" means a release of Software which is
          designated by Cisco as a change in the ones digit in the Software
          version number [(x).x.x].

     (g)  "Product(s)" shall mean, individually or collectively as appropriate,
          hardware, licensed Software, Documentation, developed products,
          supplies, accessories, and other commodities related to any of the
          foregoing, listed on Cisco's then current published Wholesale Price
          List or Global Price List.

     (h)  "Services" means any warranty, maintenance, advertising, marketing or
          technical support and any other services performed or to be performed
          by Cisco, COMSTOR, or Dealer.

     (i)  "Software" means the Cisco software in object code form listed at
          Exhibit A, and distributed either embedded into the hardware or
          separate from the hardware, and any Updates or New Releases which
          COMSTOR receives under this Agreement. Cisco may distribute
          application or network management Software from time to time which
          will be addressed in a separate policy and the license which
          accompanies the Product.

     (j)  "Subsidiary" shall mean any affiliated company or other business
          organization in the United States, in which COMSTOR now or hereafter
          owns the majority of shares, for so long as a majority of shares of
          such company or organization is owned by COMSTOR.

     (k)  "Territory" shall be listed at attached Exhibit B.

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                         ARTICLE III - PURCHASE ORDERS

3.1  Preparation of Purchase Orders. From time to time or at COMSTOR's request,
     Cisco shall inform COMSTOR of new Products available from Cisco including,
     but not limited to, replacement Products and New Releases. Cisco shall use
     commercially reasonable efforts to notify COMSTOR, including via
     electronic posting at least thirty (30) days prior to the date any new
     Product is to be introduced and shall make such Product available to
     COMSTOR for distribution no later than the date it is first introduced in
     the market place.

3.2  COMSTOR may sell only to Dealers who meet Cisco's then-current guidelines
     for Dealers, as set forth in Exhibit C. COMSTOR is authorized to sell only
     those Products listed on the Product schedules, as set forth in Exhibit A.

3.3  Issuance and Acceptance of Purchase Orders. COMSTOR may purchase and Cisco
     shall sell and license to COMSTOR, Products as described below. Cisco
     grants COMSTOR a license to distribute Software per Article 5.

     (a)  COMSTOR shall purchase Products by issuing a written or electronic
          purchase order indicating specific Products, Cisco's Product number,
          any internal Product numbers assigned by COMSTOR, quantity, unit
          price, total extended net purchase price, complete shipping address
          and instructions, requested delivery dates, and any other special
          instructions. The terms and conditions of this Agreement prevail
          regardless of any additional or conflicting terms on the purchase
          order or other correspondence. Notwithstanding the foregoing,
          additional or different terms for special promotional transactions
          may be mutually agreed to in writing by COMSTOR and Cisco's Director
          of Distribution. All purchase orders must be approved and accepted by
          Cisco's Customer Service organization in California or other offices
          as designated in writing by Cisco. Cisco will use commercially
          reasonable efforts to notify COMSTOR of acceptance or rejection of
          orders within five (5) working days after receipt of order.

     (b)  This Agreement shall not obligate COMSTOR to purchase any Products or
          services except as specifically set forth in a written purchase
          order.

     (c)  During the term of this Agreement, Cisco may make the Products
          available for order in and delivery from an alternate central
          location and/or a Cisco affiliate, if it chooses. In the event that
          Cisco does so, COMSTOR will order the Products according to the
          procedures set forth at the time such delivery becomes available. At
          such time, orders in conformance with Cisco's policies will be
          shipped according to the availability and expedited leadtimes
          described in the procedures. Cisco shall have the right to change
          delivery terms and include additional charges, if any, at the time
          such alternate order and delivery process is implemented by Cisco.

3.4  Purchase Order Alterations To, or Cancellations. Up to ten (10) days prior
     to shipment of Products, COMSTOR may request an alteration to or
     cancellation of a purchase order in order to: (i) change a location for
     delivery, (ii) modify the quantity or type of Products to be delivered,
     (iii) correct typographical or clerical errors, or (iv) to make a Product
     configuration change. Any such requests for changes made within ten (10)
     days of the originally scheduled ship date will be subject to (i)
     acceptance by Cisco, and (ii) a charge of fifteen percent (15%) of the
     total invoice amount. Cisco reserves the right to reschedule delivery in
     cases of configuration or quantity changes.

3.5  Product Shortages. If, for any reason, Cisco's production is not on
     schedule, Cisco will make commercially reasonable efforts to allocate a
     fair percentage (as determined by Cisco's VP of Sales) of available
     products based on COMSTOR's purchase history in the previous six (6) month
     period.

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                 ARTICLE IV - SHIPPING AND DELIVERY OF PRODUCTS

4.1  Shipment of Products. Shipping dates will be established by Cisco upon
     receipt of purchase orders from COMSTOR. Cisco shall use commercially
     reasonable efforts to assign shipping dates as close as practicable to
     COMSTOR's requested date. Cisco shall not be liable for any damages,
     direct, consequential, special or otherwise, to COMSTOR or to any other
     person for delay in delivery or error in filling any orders for any reason
     whatsoever, provided such commercially reasonable efforts are made by
     Cisco.

4.2  Title and Risk of Loss and Transportation of Products. Shipping terms
     shall be FCA, San Jose, California, or other Cisco designated shipping
     locations (INCOTERMS 1990). Title and risk of loss or damage to Products
     shall pass to COMSTOR at the time that the Products are delivered to the
     first common carrier. Cisco shall deliver the Products clearly marked on
     the Product package with serial number and Product description in
     machine-readable bar code (employing UPC or other industry standard bar
     code) to COMSTOR at the location shown on the purchase order. Charges for
     transportation of the Products shall be paid by COMSTOR. In no event shall
     Cisco have any liability in connection with shipment, nor shall the
     carrier be deemed to be an agent of Cisco.

4.3  Bad Box. COMSTOR shall have the right to obtain a reasonable quantity of
     original shipping boxes at no charge within forty-five (45) days to
     replace boxes that are damaged. If, within forty-five (45) days COMSTOR
     has not received the replacement boxes which it requested, COMSTOR may
     request an Return Material Authorization ("RMA") number from Cisco and
     follow Cisco's then-current RMA procedure. In the event COMSTOR repackages
     Product(s) pursuant to this clause, Product(s) is/are considered "unopened
     and in original packaging" and "new and unused condition and in factory
     sealed boxes".

             ARTICLE V - PROPRIETARY RIGHTS AND SOFTWARE LICENSING

5.1  License. Cisco and its suppliers hereby grants COMSTOR a non-exclusive,
     non-transferable license to distribute Software, in object code form only,
     in the Territory solely to Dealers (who may distribute to End Users or
     other Dealers who distribute to End Users) during the term of this
     Agreement. COMSTOR shall not make any copies or duplicates of any Software
     without the prior written consent of Cisco. COMSTOR agrees and guarantees
     that any Bug Fixes or New Releases distributed per Exhibit E will be
     distributed under the same terms and conditions as the original Software.

5.2  Title. Cisco and/or its suppliers retain all title to, and, except as
     expressly licensed herein, all rights to the Software, all copies thereof
     and all related Documentation and materials. Any invoices of Cisco
     purporting to cover such items do not convey title to, or patent rights,
     copyrights or any other proprietary interest in, such items to COMSTOR.

5.3  Restricted Rights. Cisco's software is provided to non-DOD agencies with
     RESTRICTED RIGHTS and its supporting documentation is provided with
     LIMITED RIGHTS. Use, duplication, or disclosure by the Government is
     subject to the restrictions as set forth in subparagraph ( c) of the
     Commercial Computer Software - Restricted Rights clause at FAR 52.227-19.
     In the event the sale is to a U.S. DOD agency, the government's rights in
     software, supporting documentation and technical data are governed by the
     restrictions in the Technical Data Commercial Items clause at DFARS
     252.227-7015 and DFARS Subpart 227.72.

                    ARTICLE VI - LIMITED WARRANTY PROVISION

6.1  Scope of Warranty. This warranty provision includes both a Limited Shelf
     Life Warranty to Comstor and its Resellers as well as, a Pass Through
     Limited Warranty to Comstor's Resellers. Cisco hereby represents and
     warrants that it has not entered into any agreements or commitments which
     are inconsistent with or in conflict with the rights granted to COMSTOR
     herein; and that the Products shall be free and clear of all liens and
     encumbrances.

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6.2  Pass Through of Limited Warranty. Cisco agrees that COMSTOR shall be
     entitled to pass through to Dealers and End Users of the Products all
     warranties granted by Cisco, including those set forth in Exhibit I.
     COMSTOR shall distribute the Products unopened in their original
     packaging. Cisco ships the Products with Cisco's standard, written limited
     warranty statement as well as other written terms and information
     regarding the Products ('documentation"). COMSTOR will not remove such
     documentation from the Products. COMSTOR will notify its Dealers not to
     remove such documentation from the Products. The total warranty period
     shall not exceed one hundred eighty days (180) from the date of shipment
     from Cisco to COMSTOR or it COMSTOR's Resellers.

6.3  No Other Warranty. COMSTOR shall not make any warranty commitment, whether
     written or oral, on Cisco's behalf, and will specifically disclaim all
     warranties on Cisco's behalf, other than the shelf life and the
     pass-through limited warranties referred to in this Article VI.

6.5  DISCLAIMER OF WARRANTY. EXCEPT AS SPECIFIED IN THIS ARTICLE VI, EXPRESS OR
     IMPLIED CONDITIONS, REPRESENTATIONS, AND WARRANTIES INCLUDING, WITHOUT
     LIMITATION, ANY IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY,
     FITNESS FOR A PARTICULAR PURPOSE, SATISFACTORY QUALITY, ARISING FROM A
     COURSE OF DEALING, USAGE, OR TRADE PRACTICE, ARE HEREBY EXCLUDED TO THE
     EXTENT ALLOWED BY APPLICABLE LAW. THIS DISCLAIMER AND EXCLUSTION SHALL
     APPLY EVEN IF THE EXPRESS WARRANTY SET FORTH ABOVE FAILS OF ITS
     ESSENTIONAL PURPOSE.

                             ARTICLE VII - TRAINING

Cisco shall make available to COMSTOR all training, technical support and other
services related to the Products that are currently offered or that may be
offered by Cisco. General sales and general technical support or other training
for which Cisco requires attendance of COMSTOR shall be provided at no charge
to COMSTOR. Specialized training, including but not limited to Cisco Certified
Internetworking Engineer, ("CCIE") training, will be available to COMSTOR
through Cisco or Cisco training partners at then-current prices of Cisco or its
training partners. COMSTOR may use co-op funds, if available, to purchase such
training.

                           ARTICLE VIII - TRADEMARKS

8.1  Ownership. COMSTOR concedes and recognizes that Cisco holds all right,
     title and interest to the trademarks, service marks, or trade names owned,
     used or claimed now or in the future by Cisco ("Marks").

8.2  License. COMSTOR is permitted to use the name and logo, and other marks of
     Cisco as are designated by Cisco from time to time in writing for all
     proper purposes in the sale of Products and the performance of COMSTOR's
     duties hereunder only so long as this Agreement is in force. COMSTOR's use
     of such trademark, logo and trade name shall be in accordance with Cisco's
     written policies in effect during the term of this Agreement , including,
     but not limited to, trademark usage and advertising policies. COMSTOR
     agrees not to attach any marks or labels to the Products other than an
     aesthetically proper label identifying COMSTOR. COMSTOR further agrees not
     to affix any Cisco trademark, logo or trade name to products other than
     genuine Products.

                         ARTICLE IX - INVENTORY BALANCE

Inventory Balance. COMSTOR has the option to return to Cisco, for credit, up to
ten percent (10%) of the dollar value of Products from the Wholesale Price List
shipped to COMSTOR in the preceding ninety (90) period. This limitation on the
amount of Products that may be returned does not apply to the return of
discontinued or obsoleted products as described in Article X hereof. COMSTOR
shall be entitled to return

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Product from the Wholesale Price List once per quarter, provided such returns
do not exceed the dollar value limit stated in this section. Cisco shall credit
COMSTOR's account in the amount of the price paid by COMSTOR therefor, less any
price protection credits issued to COMSTOR related to the Products returned
(the "Return Credit"), within thirty (30) days of COMSTOR's invoice for such
returned Products, as long as the date of invoice does not precede the date of
return. The following requirements must be met by COMSTOR:

(a) The returned Products are in new and unused condition and in factory sealed
boxes, and are listed in Cisco's then-current published Wholesale Price List.
The phrase "new and unused condition and in factory sealed boxes" is intended
to recognize that there may be cartons which are worn and/or have numerous
shipping labels printed on, or affixed to, the shipping carton. It is intended
that these units will qualify for repurchase as long as the contents are new
and unused;

(b) COMSTOR may submit the inventory balance claim between the first and
twenty-first calendar days of the following months: February, May, August, and
November.

(c) An offsetting order, for different Products, for immediate shipment, unless
mutually agreed upon to schedule out, must be submitted at the time of such
return, which shall be equal to or greater than the dollar value of the
returned Products;

(d) COMSTOR shall bear all shipping and handling charges to the Cisco
designated United States site for Products returned for credit;

(e) COMSTOR shall obtain an RMA number prior to returning any Product to Cisco.
COMSTOR shall follow Cisco's then-current RMA process; and

(f) COMSTOR reports must be provided to Cisco in accordance with Section 16.3.

      ARTICLE X - RETURN OF DISCONTINUED/OBSOLETE PRODUCTS & DOA PRODUCTS

Return of Discontinued/Obsolete Products. Cisco will use commercially
reasonable efforts to notify COMSTOR, including via electronic posting, of
Products that are removed from Cisco's then-current published Wholesale Price
List ("Obsoleted Products").

Provided COMSTOR provides required reports to Cisco in accordance with Section
16.3 of this Agreement, COMSTOR shall have the right to return Obsoleted
Products for full credit under Cisco's then-current RMA process.

COMSTOR must notify Cisco of the quantity of such Products to be returned to
Cisco within thirty (30) days of notification of obsolescence by Cisco. Such
right to return is contingent upon return by COMSTOR of Obsolete Products
within sixty (60) days of such notification by Cisco. Such Products must be in
new and unused condition and in factory sealed boxes

Return of DOA Products. Products returned to COMSTOR within sixty (60) days
after shipment to End User may be returned to Cisco for credit equal to the net
purchase price or license fee of the individual product as paid by COMSTOR.
Product returned under warranty after this initial period must be referred to
Cisco. During this sixty (60) day period, Cisco shall bear all costs of
shipping and risk of loss of DOA and in-warranty Products to Cisco's location
to COMSTOR.

                              ARTICLE XI - QUALITY

Quality Control. Prior to shipment, Cisco shall test and inspect Products in
accordance with ISO 9001 standards.

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                  ARTICLE XII - PATENT AND COPYRIGHT INDEMNITY

Proprietary Rights Indemnification. Cisco will have the obligation and right to
defend and indemnify COMSTOR solely against any final judgement(s) entered or
awarded in any such suit by a court of competent jurisdiction or proceeding, or
against the amount of any settlements of such claims, suit or proceeding in so
far as it is based on a claim that any Product supplied hereunder infringes a
United States copyright or an existing United States patent (issued as of the
Effective Date). Cisco's obligation specified in this paragraph will be
conditioned on COMSTOR's notifying Cisco promptly in writing of the claim and
giving Cisco full authority, information, and assistance for the defense and
settlement thereof. If such a claim has occurred, or in Cisco's opinion is
likely to occur, COMSTOR agrees to permit Cisco, at its option and expense,
either to: (i) procure for COMSTOR the right to continue using the Product;
(ii) replace or modify the same so that it becomes non-infringing; or (iii) if
neither of the foregoing alternatives is reasonably available, immediately
terminate Cisco's obligations (and COMSTOR's rights) under this Agreement with
regard to such Products, and, if COMSTOR returns such Product to Cisco as
originally delivered by Cisco (except for normal wear and tear) refund to
COMSTOR the price originally paid by COMSTOR to Cisco for such Product as
depreciated or amortized by an equal annual amount over the lifetime of the
Products as established by Cisco.

Cisco has no liability for any claim based upon the combination, operation or
use of any Product supplied hereunder with equipment, devices or software not
supplied by Cisco. Cisco has no liability for any claim based upon alteration
or modification of any Product supplied hereunder.

Notwithstanding any other provisions hereof, Cisco shall not be liable for any
claim based on COMSTOR's use of the Products as shipped after Cisco has
informed COMSTOR of modifications or changes in the Products required to avoid
such claims and offered to implement those modifications or changes, at Cisco's
expense, if such claim would have been avoided by implementation of Cisco's
suggestions.

THE FOREGOING STATES THE ENTIRE OBLIGATION OF CISCO, AND THE EXCLUSIVE REMEDY
OF COMSTOR, WITH RESPECT TO INFRINGEMENT OF PROPRIETARY RIGHTS. THE FOREGOING
IS GIVEN TO COMSTOR SOLELY FOR ITS BENEFIT AND IN LIEU OF, AND CISCO DISCLAIMS,
ALL WARRANTIES OF NON-INFRINGEMENT WITH RESPECT TO THE PRODUCTS.

                             ARTICLE XIII - SUPPORT

Support shall be provided in accordance with Exhibit E that is incorporated
herein

                      ARTICLE XIV - PAYMENT AND INVOICING

Prices for Products. Prices for the Products payable by COMSTOR shall be those
specified in Cisco's then current WHOLESALE Price List or Global Price List
with applicable discount, as updated from time to time by Cisco. All prices are
FCA, San Jose, California, or other Cisco designated shipping locations
(INCOTERMS 1990). Prices for the Products may be changed thirty (30) days after
written notice to COMSTOR (the "Notice Period"). Purchase Orders received
before the Notice Period, and those received during the Notice Period which
specify a delivery date within sixty (60) days following the effective date of
a price increase will be invoiced to COMSTOR without regard to the price
change, provided that COMSTOR may only order quantities of Products not
exceeding the average monthly dollar value of COMSTOR's orders for said
Products over the preceding three (3) month period. Unless otherwise specified
by Cisco, price decreases will apply immediately for all new orders accepted by
Cisco following notice of the price decrease.

14.1 Credits to Distributor. In the event any provisions of this Agreement or
     any other agreement between COMSTOR and Cisco require that Cisco grant
     credits to COMSTOR's account, Cisco will

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     grant such credit to COMSTOR's account. COMSTOR may not issue debit memos
     to Cisco. If such credits are not issued by Cisco within forty-five (45)
     days, COMSTOR will deduct the amount of such credits from any
     bills/invoices from Cisco upon written notice, which will be acknowledged
     by Cisco.

14.2 Payment. Except as otherwise set forth herein, any sum due to Cisco
     pursuant to this Agreement shall be payable net thirty (30) days after
     shipment. Cisco shall invoice COMSTOR no earlier than the applicable
     shipping date for the Products covered by such invoice. In the event
     COMSTOR's account is past due, and with written notice to COMSTOR, Cisco
     shall have the right to place COMSTOR on credit hold and suspend further
     shipments. Once COMSTOR's account is brought current, Cisco may require
     pre-payment for future orders. All payments shall be made in U.S.
     currency, unless otherwise agreed to in writing by the parties.

14.3 Taxes. The purchase price does not include any federal, state or local
     taxes, or sales, use, excise, ad valorem, withholding or other taxes or
     duties that may be applicable to the purchase of Products. When Cisco has
     the legal obligation to collect such taxes, the appropriate amount shall
     be added to COMSTOR's invoice and paid by COMSTOR unless COMSTOR provides
     Cisco with a valid tax exemption certificate prior to issuance of a
     purchase order. Such certificate must be authorized by the appropriate
     taxing authority.

14.4 Price Protection. In the event Cisco puts into effect a general price
     decrease for any Product from the Wholesale Price List, Cisco will provide
     to COMSTOR a price credit on any such Products on order, in transit or in
     COMSTOR's inventory as of the effective date of the price decrease, Cisco
     will credit COMSTOR's account with an amount equal to the number of such
     units of the Product in COMSTOR's inventory and in transit on the
     effective date of a price decrease multiplied by the difference between
     the net price paid and the new net price. COMSTOR will have thirty (30)
     days from the effective date of the price change to exercise protection
     under this program by issuing a request for credit memo with supporting
     documentation to Cisco. Notwithstanding the foregoing, Products on order
     will receive an automatic retroactive price credit. The only inventoried
     Products covered under this price protection clause are those duly
     reported to Cisco in the monthly inventory reports required in Article 16
     of this Agreement. Cisco will use commercially reasonable efforts to
     notify in a timely manner COMSTOR of changes in pricing.

14.5 Invoices. Invoices shall contain (i) Cisco's name and invoice date, (ii) a
     reference to the Purchase Order, (iii) separate descriptions, unit prices
     and quantities of the Products actually delivered, (iv) credits (if
     applicable), (v) shipping charges, (vi) name (where applicable), title,
     phone number, and complete mailing address of responsible official to whom
     payment is to be sent.

                            ARTICLE XV - CO-OP FUNDS

Co-Op. Cisco will offer to COMSTOR its then-current standard co-op program and
any future programs, designed for Cisco's primary two-tier distributors.
COMSTOR will use reasonable efforts to work in cooperation with Cisco to
develop a suitable marketing program to support the sale of applicable Products
and the development of such program will be contingent upon available funding
from Cisco and the selection of mutually agreed promotional vehicles which may
include COMSTOR's catalog, telemarketing, training services, etc. There may or
may not be a charge associated to participate in said vehicles. Co-op
guidelines are attached hereto as Exhibit D.

                       ARTICLE XVI - REPORTS AND RECORDS

16.1 Vendor Reports. Cisco shall, if requested, render monthly reports to
     COMSTOR setting forth the separate Products, dollars invoiced for each
     Product, and total dollars invoiced to COMSTOR for the month, and such
     other information as COMSTOR may reasonably request.

                                                                             10
<PAGE>

16.2 Records. COMSTOR will keep full, true, and accurate records and accounts,
     in accordance with generally accepted accounting principles, of each
     Product distributed. COMSTOR shall, upon fifteen (15) days prior written
     notice, during regular business hours at COMSTOR's principal place of
     business, allow Cisco to (i) audit such records, (ii) examine COMSTOR's
     place(s) of business, and (iii) examine COMSTOR's inventories of Products
     for the purpose of verifying to the satisfaction of Cisco that COMSTOR is
     performing its obligations under this Agreement.

16.3 COMSTOR Reports. As identified in Exhibit F and Exhibit G, which are
     incorporated herein.

16.4 Forecasts. Upon reasonable notice by Cisco, COMSTOR agrees to provide
     Production planning information for use by Cisco.

16.5 ECCN. Upon request by COMSTOR, Cisco agrees to make available to COMSTOR
     the Export Control Classification Number (ECCN) for each of Cisco's
     Products and information as to whether or not any of such Products are
     classified under the U.S. Munitions list.

                           ARTICLE XVII - TERMINATION

17.1 Termination. Either party may terminate this Agreement, with or without
     cause, upon giving the other party ninety (90) days prior written notice.
     In the event that either party materially defaults in the performance of
     any of its duties or obligations set forth in this Agreement, the other
     party may give written notice to the defaulting party specifying the
     default and, if such default is not substantially cured within thirty (30)
     days after such written notice, the party not in default may terminate
     this Agreement at that time. Any termination of a particular Subsidiary's
     rights under this Agreement shall not automatically terminate any other
     Subsidiary's rights and obligations under this Agreement. Notwithstanding
     the foregoing, Cisco may terminate this Agreement immediately upon written
     notice in the event of breach by COMSTOR of Article 5 "Proprietary Rights
     and Software Licensing", Article 18 "Confidential Information" or Article
     20 "Export Restrictions" of this Agreement.

17.2 Termination for Insolvency or Bankruptcy. Either party may immediately
     terminate this Agreement and any purchase order by giving written notice
     to the other party in the event of (i) the liquidation or insolvency of
     the other party, (ii) the appointment of a receiver or similar officer for
     the other party, (iii) an assignment by the other party for the benefit of
     all or substantially all of its creditors, (iv) entry by the other party
     into an agreement for the composition, extension, or readjustment of all
     or substantially all of its obligations, or (v) the filing of a
     meritorious petition in bankruptcy by or against the other party under any
     bankruptcy or debtors' law for its relief or reorganization.

17.3 Rights and Repurchase of Products Upon Termination. Upon termination of
     this Agreement:

(a) All rights and licenses of COMSTOR hereunder shall terminate and COMSTOR
shall immediately discontinue all representations that it is a Cisco
distributor, except for COMSTOR's exercise of its rights which have previously
accrued due to the pre-termination transactions between the parties (including
but not limited to rights to fulfillment of orders previously placed,
compensation for credits previously earned, returns or exchanges of Products
previously approved, etc.)

(b) Cisco may, at its option, repurchase from COMSTOR all Products in inventory
which are in new and unused condition and in factory sealed boxes. Such
repurchase shall be at the original price paid less any deduction for price
protection.

(c) COMSTOR shall submit to Cisco within fifteen (15) days after the effective
date of termination a list of all the Products owned by COMSTOR as of the
effective date of the termination. Upon receipt of such list by Cisco and
receipt of notice from Cisco of its exercise of this option, COMSTOR may
commence returning Product under Cisco's then-current RMA process. COMSTOR will
have up to forty-five (45) days from the effective date of termination to
return Products under this section.

                                                                             11
<PAGE>

(d) After receipt of the Cisco Products from COMSTOR, Cisco will issue a credit
to COMSTOR's account. If such credit exceeds amounts due from COMSTOR, Cisco
shall remit in the form of a check to COMSTOR the excess within thirty (30)
business days of receipt of the Product.

(e) The due date of all monies due either party shall automatically be
accelerated such that they become due and payable on the effective date of
termination, even if longer terms had been provided previously.

(f) COMSTOR shall immediately return to Cisco all Proprietary Information and
data (including all copies thereof) then in COMSTOR's possession or custody or
control retaining only sufficient material to fulfill remaining orders and to
service the installed base of End Users as mutually agreed upon by Cisco and
COMSTOR, including, without limitation: (i) all technical materials and
business plans supplied by Cisco to COMSTOR; (ii) all manuals covering the
Products; and (iii) any End User, Dealer, or prospect lists provided by Cisco.

(g) Without waiving its right to monies or credits already due to it from
Cisco, COMSTOR agrees that, in the event of termination of this Agreement as
permitted herein, it shall have no rights to damages or indemnification of any
nature, specifically including commercial severance pay, whether by way of loss
of future profits, expenditures for promotion of the Products (except where
promotion or co-op funds have previously been approved therefor), or other
commitments in connection with the business and good will of COMSTOR. COMSTOR
expressly waives and renounces any claim to compensation or indemnities for any
termination of a business relationship.

                        ARTICLE XVIII - CONFIDENTIALITY

COMSTOR acknowledges that, in the course of selling the Products and performing
its duties under this Agreement, it may obtain information relating to the
Products and to Cisco which is of a confidential and proprietary nature
("Proprietary Information"). Such Proprietary Information includes, but is not
limited to, trade secrets, know how, inventions, techniques, processes,
programs, schematics, software source documents, data, Customer lists,
financial information and sales and marketing plans which COMSTOR knows or has
reason to know is confidential, proprietary or trade secret information of
Cisco. COMSTOR shall at all times, both during the term of this Agreement and
for a period of at least three (3) years after its termination, keep in trust
and confidence all such Proprietary Information, and shall not use such
Proprietary Information other than in the course of its duties under this
Agreement; nor shall COMSTOR disclose any such Proprietary Information to any
third party without the written consent of Cisco.

The obligations of confidentiality set forth herein shall not apply to
information which (a) has entered the public domain except where such entry is
the result of COMSTOR's breach of this Agreement; (b) prior to disclosure
hereunder was already rightfully in COMSTOR's possession; or (c) subsequent to
disclosure hereunder is obtained by COMSTOR on a non-confidential basis from a
third party who has the right to disclose such information to the Customer.

COMSTOR shall appropriately bind each of its employees to whom such disclosure
is made, to hold the Proprietary Information in strict confidence and not to
disclose such information to any person other than as is necessary in the
course of its employment by COMSTOR.

Cisco acknowledges that, under this Agreement, COMSTOR may provide Point of
Sale ("POS") reports, financial information, sales and marketing plans, network
design information, customer lists and customer information, and other
information of a proprietary and confidential nature ("Confidential
Information"). Such confidential information shall be used by Cisco only in
connection with this Agreement, except as otherwise provided herein. Cisco
shall at all times, during both the term of this Agreement and for a period of
at least three (3) years after its termination, keep in trust and confidence
all such Confidential Information, and shall not disclose such Confidential
Information to a third party without COMSTOR's written consent from COMSTOR's
authorized management level representative, except as may be required to be
disclosed by a governmental authority or regulation. Cisco further agrees to
immediately return to COMSTOR all Confidential Information (including copies
thereof) in Cisco's possession, custody, or control upon

                                                                             12
<PAGE>

termination of this Agreement at any time and for any reason, except for POS
reports or customer lists that Cisco may use for internal business or end user
support purposes or government-related purposes.

                          ARTICLE XIX - FORCE MAJEURE

Force Majeure. The term "Force Majeure" shall be defined to include fires or
other casualties or accidents, acts of God, shortages of supplies, severe
weather conditions, strikes or labor disputes, war or other violence, or any
law, order, proclamation, regulation, ordinance, demand or requirement of any
governmental agency.

          (a) A party whose performance is prevented, restricted or interfered
          with by reason of a Force Majeure condition, other than obligations to
          pay monies due and owing to Cisco by COMSTOR, shall be excused from
          such performance to the extent of such Force Majeure condition so long
          as such party provides the other party with prompt written notice
          describing the Force Majeure condition and immediately continues
          performance whenever and to the extent such causes are removed.

          (b) If, due to a Force Majeure condition, the scheduled time of
          delivery of performance is or will be delayed for more than ninety
          (90) days after the scheduled date, the party not relying upon the
          Force Majeure condition may terminate, without liability to the other
          party, any purchase order or portion thereof covering the delayed
          Products.

                        ARTICLE XX - EXPORT RESTRICTIONS

COMSTOR hereby acknowledges that the Products and technical data supplied by
Cisco hereunder are subject to export controls under the laws and regulations
of the United States, including the Export Administration Regulations. COMSTOR
shall comply with such United States export control laws and regulations
applicable to all Products and technical data (including software, processes
and services), and, without limiting the generality of this Article, agrees to
obtain all licenses, permits or approvals required by any government. Cisco and
COMSTOR each agree to provide the other such information and assistance as may
reasonably be required by the other in connection with securing such licenses,
approvals, and permits, and to take timely action to obtain all required import
and export documents.

COMSTOR hereby certifies that none of the Products or technical data supplied
by Cisco under this Agreement will be knowingly sold or otherwise transferred
to, or made available for use by or for, any military end-user, or in any
military end-use located in or operating under the authority of any country
identified in Supplement No. 1 to Part 740 of the EAR (The current restricted
list is available on Cisco Connection Online (URL;
http://www-mfg.cisco.com/wwl/export) without a U.S. license. COMSTOR also
certifies that none of the products or technical data supplied by Cisco under
this Agreement will be knowingly sold or otherwise transferred to, or made
available for use by or for, any entity that is engaged in the design,
development, production or use of nuclear, biological or chemical weapons or
missiles. COMSTOR agrees to notify Cisco immediately if it obtains any
knowledge that the Products will be so misused, as described in the preceding
sentence. COMSTOR's obligation under this Article shall survive the expiration
or termination of this Agreement for any reason whatsoever.

COMSTOR agrees to maintain a record of sales and re-exports of the Products and
technical data and to forward any required records to Cisco or, at Cisco's
request, the U.S. Government. In accordance with the EAR, COMSTOR also agrees
to permit periodic audits by Cisco, not to exceed two (2) times per calendar
year, or the U.S. Government as required to ensure export compliance.

                                                                             13
<PAGE>

                       ARTICLE XXI - COMPLIANCE WITH LAWS

Each party hereby represents and warrants to the other party that (i) it shall
comply with all applicable local and national laws and regulations (including
all applicable price discrimination laws), (ii) this Agreement and all of its
terms are in full conformance and in compliance with such laws, and (iii) it
shall not act in any fashion or take any action which will render the other
party liable for a violation of the U.S. Foreign Corrupt Practices Act, which
prohibits the offering, giving or promising to offer or give, directly or
indirectly, money or anything of value to any official of a government,
political party or instrumentality thereof in order to assist it or the other
party in obtaining or retaining business.

                     ARTICLE XXII - LIMITATION OF LIABILITY

LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING ELSE HEREIN AND EXCEPT FOR
CLAIMS ARISING FROM PERSONAL INJURY, DEATH OR PROPERTY DAMAGE ALLEGEDLY CAUSED
BY THE PRODUCTS AND CLAIMS CONTEMPLATED BY ARTICLE XlI, "PATENT AND COPYRIGHT
INDEMNITY" HEREOF, ALL LIABILITY OF CISCO UNDER THIS AGREEMENT OR OTHERWISE
SHALL BE LIMITED TO THE GREATER OF ONE MILLION DOLLARS ($1,000,000) OR THE
VALUE OF THE CISCO PRODUCT WHICH ACTUALLY CAUSED THE CIRCUMSTANCES GIVING RISE
TO SUCH LIABILITY.

                  ARTICLE XXIII - CONSEQUENTIAL DAMAGES WAIVER

EXCEPT FOR LIABILITY ARISING OUT OF OR IN CONNECTION WITH COMSTOR'S BREACH OF
SECTION V, "PROPRIETARY RIGHTS AND SOFTWARE LICENSING" AND/OR ANY OTHER BREACH
OF CISOCO'S PROPRIETARY RIGHTS HEREUNDER, AND EITHER PARTY'S BREACH OF SECTION
XVIII, "CONFIDENTIAL INFORMATION", IN NO EVENT SHALL EITHER PARTY OR THEIR
RESPECTIVE SUPPLIERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, LOST PROFITS, OR LOST DATA, OR ANY OTHER INDIRECT DAMAGES, WHETHER
ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, EVEN IF SUCH
PARTY HAS BEEN INFORMED OF THE POSSIBILTY THEREOF, TO THE EXTENT SUCH DAMAGES
ARE CHARACTERIZED AS CONSEQUENTIAL DAMAGES BY A COURT OF COMPETENT
JURISDICTION.

                       ARTICLE XXIV - VALUE ADDED RESELLER

Comtor shall only sell to a value added reseller ("VAR") of Cisco equipment.
For the purposes of this Agreement a VAR shall be an entity which is:

     1)   A reseller who provides onsite installation and integration services
          to the end user customer;
     2)   A reseller who provides pre- and post-sales support; and
     3)   A reseller who employs Cisco-trained personnel to provide services in
          (1) and (2); or 4) A reseller who provides significant value to the
          end user, this does not include financing services provided to the
          end user customer.

Cisco reserves the right to debit Comstor's account for an additional 25% of
the original invoice price ("Uplift") for any sales to an entity that is not a
VAR. If an entity is sold to whom is not a VAR then Cisco will notify Comstor,
and inform Comstor of the entities non-VAR status. After Comstor has received
notification, any future sales to the entity will result in Cisco debiting the
uplift to Comstor's account.

In the event of a dispute over the determination of a reseller's VAR status,
then Cisco's determination prevails.

                                                                             14
<PAGE>

                           ARTICLE XXV - MISCELLANEOUS

25.1   Performance of COMSTOR. COMSTOR warrants that it will at no time during
       the period of this Agreement do, cause, or permit to be done, published,
       or said, any information, act or thing which is or may be detrimental to
       the best interests or the business reputation of Cisco.

25.2   Binding Nature, Assignment, and Subcontracting. This Agreement shall be
       binding on the parties and their respective successors and assigns.
       COMSTOR may not assign this Agreement without the prior written consent
       of the other party.

25.3   Counterparts. This Agreement may be executed in several counterparts,
       all of which taken together shall constitute one single agreement
       between the parties.

25.4   Headings. The article and section headings used in this Agreement are
       for reference and convenience only and shall not enter into the
       interpretation hereof.

25.5   Relationship of Parties. COMSTOR is performing pursuant to this
       Agreement only as an independent contractor. Nothing set forth in this
       Agreement shall be construed to create the relationship of principal and
       agent between COMSTOR and Cisco. Neither party shall act or represent
       itself, directly or by implication, as an agent of the other party.

25.6   Notices. Wherever one party is required or permitted to give notice to
       the other pursuant to this Agreement, such notice shall be deemed given
       when delivered in hand, overnight courier, or when mailed by registered
       or certified mail, return receipt requested, postage prepaid, and
       addressed as follows:

       In the case of Cisco:                   In the Case of COMSTOR:
       --------------------                    ----------------------
       Cisco Systems, Inc.                     Comstor Corporation
       170 W. Tasman Drive                     14116 Newbrook Drive
       San Jose, CA 95134-1706                 Chantilly, VA 20151
       Attn: Director of                       Attn: Barry Culman, President
       Distribution Channels

       Other notices not specifically described in this Agreement may be
       submitted via facsimile or electronic mail notification.

       Either party may from time to time change its address for notification
       purposes by giving the other party written notice of the new address and
       the date upon which it will become effective.

25.7   Severability. If, but only to the extent that, any provision of this
       Agreement is declared or found to be illegal, unenforceable or void,
       then both parties shall be relieved of all obligations arising under
       such provision, it being the intent and agreement of the parties that
       this Agreement shall be deemed amended by modifying such provision, to
       the extent necessary to make it legal and enforceable while preserving
       its intent.

25.8   Waiver. A waiver by either of the parties of any covenants, conditions
       or agreements to be performed by the other or any breach thereof shall
       not be construed to be a waiver of any succeeding breach thereof or of
       any other covenant, condition or agreement herein contained.

25.9   Non-exclusive Market and Purchase Rights. It is expressly understood and
       agreed that this Agreement does not grant to Cisco or COMSTOR an
       exclusive right to purchase or sell Products and shall not prevent
       either party from developing or acquiring or selling competing Products
       of other vendors or customers.

25.10  Entire Agreement. This Agreement, including any Exhibits and documents
       referred to in this Agreement or attached hereto, constitutes the entire
       and exclusive statement of Agreement between the parties with respect to
       its subject matter and there are no oral or written

                                                                             15
<PAGE>

       representations, understandings or agreements relating to this Agreement
       which are not fully expressed herein.

25.11  Governing Law. This Agreement shall have California as its situs and
       shall be governed by and construed in accordance with the laws of the
       State of California, without regard to its conflict of laws
       provisions. The parties specifically disclaim the UN Convention on
       Contracts for the International Sale of Goods.

25.12  Interest. The parties will use reasonable efforts to resolve
       outstanding amounts owned. Any sum not paid by COMSTOR after sixty
       (60) days shall be subject to interest until paid at a rate of 1.5%
       per month (18% per annum), or the maximum rate permitted by law,
       whichever is less.

25.13  Survival. Articles 5, "Proprietary Rights & Software Licensing", 6,
       "Pass Through of Limited Warranty", 14.4, "Taxes", 17.3, "Rights and
       Repurchase of Products Upon Termination", 18, "Confidentiality", 20,
       "Export Restrictions", 21, "Compliance With Laws", 22, "Limitation of
       Liability", 23, "Consequential-Damages", and 24, "Miscellaneous",
       shall survive termination or expiration of this Agreement.

25.14  Subsidiaries. Subsidiaries (if applicable) may purchase Products from
       Cisco under this Agreement, provided that each such Subsidiary has
       accepted in writing the terms and conditions of this Agreement and
       before placing orders and each such Subsidiary, COMSTOR and Cisco must
       have executed an agreement in the form attached hereto as Exhibit H.
       COMSTOR hereby guarantees the contractual obligations, and is jointly
       and severally liable for the financial and other obligations, of any
       and all Subsidiaries who purchase Products under this Agreement.

IN WITNESS WHEREOF, the parties have each caused this Agreement to be signed
and delivered by its duly authorized officer or representative as of the
Effective Date.

CISCO SYSTEMS, INC.                         COMSTOR CORPORATION

By: /s/ Rick Timmins                        By: /s/ Barry A. Culman
   ---------------------------------           ---------------------------------

Name: Rick Timmins                          Name: Barry A. Culman
     -------------------------------             -------------------------------

Title: VP WW Sales Finance                  Title: President
      ------------------------------              ------------------------------

Date:  June 15, 1999                        Date: June 28, 1999
     -------------------------------             -------------------------------

                                                                             16
<PAGE>

       EXHIBIT A: PRODUCTS AND PRICING/PRODUCT SCHEDULES/QUARTERLY GOALS

1) COMSTOR may purchase Cisco Products as listed in Cisco's then current
Wholesale and Global Price List.

[RESERVED to be set after contract execution] -

2)   COMSTOR's Annual Product Sales Out Volume Goals (in US$)

1st QTR           2nd QTR           3rd  QTR         4th QTR           TOTAL
-------           -------           --------         -------           -----

                                                                             17
<PAGE>

                              EXHIBIT B: TERRITORY

Territory: Dealers within the United States, including Hawaii and Alaska, but
excluding U.S. Territories, such as but not limited to Puerto Rico.

                                                                             18
<PAGE>

              EXHIBIT C: MINIMUM TERMS AND CONDITIONS FOR DEALERS

Each Dealer Agreement will contain the following minimum terms and conditions:

       (1) Territory is no greater than COMSTOR's Territory as defined in
Exhibit B.

       (2) Distributor grants a non-transferable, non-exclusive right to Dealer
to distribute the Products directly to end users.

       (3) No title to the proprietary rights in any Products or documentation
is transferred to Dealer by Cisco or COMSTOR.

       (4) Dealer will not translate, reverse compile or disassemble the
Software.

       (5) Dealer will not remove, alter or destroy any form of copyright
notice, proprietary markings or confidential legends placed upon or contained
within the Product or documentation.

       (6) Dealer will keep all Cisco Confidential Information confidential.

       (7) Use of the Marks in distribution, advertising and/or promotion of
the Products will be in accordance with policies regarding advertising and
trademark usage as established from time to time by Cisco, and Dealer agrees to
cooperate with Cisco in facilitating Cisco's monitoring and control of the
nature and quality of products and services supplied in connection with the
Marks.

       (8) Cisco makes no warranty to Dealer of any kind with respect to the
Product, express or implied, including, without limitation, the implied
warranties of merchantability, fitness for a particular purpose and
non-infringement of third party rights. Cisco will not be liable to Dealer or
its customers for indirect or consequential damages.

       (9) Cisco shall not be held to any liability whatsoever with respect to
any claim of the Dealer on account of the use or performance of any Product.
Dealer may not make or pass on, and shall take all measures necessary to ensure
that neither it nor any of its agents or employees shall make or pass on, any
warranty or representation on behalf of Cisco to any customer, end user, or
third party. Cisco shall have no obligation to furnish any assistance,
information or documentation to Dealer with respect to the Product.

       (10) Dealer will take all reasonable steps when making proposals and
agreements with foreign governments other than the United States which involve
the Product and related documentation to ensure that Cisco's proprietary rights
in such Product and related documentation receive the maximum protection
available from such foreign government for commercial computer software and
related documentation developed at private expense.

       (11) Comstor will, in its sole discretion, determine the sale price of
Product to Dealers.

                                                                             19
<PAGE>

                 EXHIBIT D: THE CISCO-DISTRIBUTOR CO-OP PROGRAM

OVERVIEW

Cisco provides to its distributors a cooperative advertising program which
allows authorized distributors to accrue co-op funds on purchases of Products
on the Wholesale Price List and Global Price List. These funds are to be used
in developing the market for Cisco Products to Dealers. General marketing
activities including advertising, direct mailings, literature, sales
promotions, training (as referenced in Article VII of the Agreement), seminars,
and trade shows may be charged to the co-op balance. Cisco will reimburse up to
one hundred percent (100%) of costs for approved activities not to exceed the
balance in COMSTOR's co-op.

PROGRAM GUIDELINES

1. Any and all purchases or expenditures made with co-op funds must be
pre-approved in writing by Cisco. A "Prior Approval" form identifying the
nature and costs of the activity must be approved in advance in writing by
Cisco Channel marketing.

2. Co-op funds are accrued at the rate of two percent (2%) per month of net
monthly shipments on the direct purchase of Products on the Wholesale Price
List and Global Price List. Freight and rush charges are excluded from co-op
accrual. Effective August 1, 1999, Co-op funds will accrue at a rate of 1.75%
per month of net monthly shipments on the direct purchase of Products on the
Wholesale Price List and Global Price List. Freight and rush charges will
continue to be excluded from co-op accrual.

3. From the month the accrual occurs, COMSTOR will have six (6) months to
utilize the funds accrued in that month. Such utilization is defined as an
Approved Prior. For example, Cisco co-op funds accrued in the month of January
will appear on the February statement and are available for use until the last
day of July.

4. Full and complete reimbursement claims against an Approved Prior must be
submitted within six (6) months after the Prior was issued. Any unused funds at
the end of six (6) months will expire and be forfeited.

5. Either COMSTOR or Cisco may initiate co-op proposals.

6. Cisco will issue credit memos to reimburse COMSTOR for co-op expenses or, if
no monies are owed by COMSTOR to Cisco at the time, will make this
reimbursement by check, either of which shall be accomplished within thirty
(30) days of COMSTOR's claim for the credit.

7. Cisco reserves the right to modify or terminate this co-op program upon
thirty (30) days notice to its distributors. Such termination or modification
will not affect claims for programs approved prior to the effective date of the
modification or termination.

8. COMSTOR shall not use any Co-op funds in any manner that violates either
U.S. Federal or State laws or regulations regarding the giving of gifts or
gratuities to federal or state personnel, or which otherwise violate federal or
state Anti-Kickback or bribery laws.

                                                                              20
<PAGE>

                EXHIBIT E: TWO-TIER DISTRIBUTION SUPPORT EXHIBIT

1.     DEFINITIONS.

       1.1.   "Bug Fix" means an error correction, patch or workaround for the
              Software which is provided by Cisco to Distributor in response to
              Distributor's request, or at Cisco's option, which Cisco chooses
              to provide to Distributor.

       1.2.   "CCO" means Cisco Connection Online, Cisco's online information
              web server.

       1.3.   "Customer" means End Users and Resellers.

       1.4.   "Hardware" means tangible Cisco Product made available to
              Distributor.

       1.5.   "Major Release" or "New Release" means a release of Software
              which is designated by Cisco as a change in the ones digit in the
              Software version number [(x).x.x].

       1.6.   "Product" means both Hardware and/or Software.

       1.7.   "Reseller" means an authorized reseller or value added reseller
              of Distributor who has entered into a written contract with
              Distributor containing the requirements set forth in this
              Agreement.

       1.8.   "RMA" means Return Material Authorization.

       1.9.   "Software" means the machine-readable object code software
              programs licensed by Cisco.

       1.10.  "Standard Business Hours" means 6:00 AM to 6:00 PM Pacific
              Standard Time Monday through Friday, excluding Cisco-observed
              holidays, in the U.S. and Canada and outside the U.S. and Canada,
              means 8:00 AM to 6:00 PM Australia's Eastern Standard Time and
              Central European Time, Monday through Friday, excluding local
              Cisco-observed holidays.

       1.11.  "TAC" means Cisco's Technical Assistance Center.

2.     CISCO RIGHTS AND OBLIGATIONS. For Products purchased under this
       Agreement, Cisco provides the services described below. Unless specified
       otherwise, the following services, are provided solely to Distributor as
       backup to its technical support staff. Cisco shall have no obligation to
       furnish any assistance, information or documentation to Customers with
       respect to the Product.

       2.1.   CCO Access. Cisco will provide partner-level access to CCO.

       2.2.   Technical Support. Cisco shall provide access to Cisco's TAC via
              phone, electronic mail and facsimile during Standard Business
              Hours.

       2.3.   Bug Fixes. During the Cisco warranty period, Cisco will provide
              Bug Fixes to Distributor as follows.

              2.3.1. When required, Cisco will provide new Software to
                     Distributor to correct a problem, or provide a
                     network-bootable Software image, as determined by Cisco.

              2.3.2. This service is limited to supported Software releases.
                     Cisco supports each New Release for a period of thirty-six
                     (36) months from the first commercial shipment of that
                     release. Cisco, in meeting any support obligations, may
                     require Distributor to upgrade to a supported release.

              2.3.3. Duplication and Distribution Rights. Cisco grants
                     Distributor the right to duplicate Bug Fixes for
                     distribution to Customers who have a contract with
                     Distributor and Reseller respectively provided such
                     Customer is currently licensed to use the Software.

       2.4.   Hardware Support.

              2.4.1. Return for Replacement. During the Cisco warranty period,
                     Distributor may return failed Product to Cisco for
                     replacement. Cisco will use commercially reasonable
                     efforts to ship a replacement within ten (10) business
                     days after receipt of the failed Product from Distributor.
                     After the warranty period, parts will be charged at
                     Cisco's then-current rates.

                                                                             21
<PAGE>

              2.4.2. Distributor may request advance replacement delivery of
                     replacement parts (Cisco will send the part upon
                     Distributor's receipt of an RMA number) at Cisco's
                     then-current Advance Replacement charge.

              2.4.3. Product used for replacement may be new or equivalent to
                     new, at Cisco's discretion.

       2.5.   Cisco Brand Services Option. Cisco will make available for
              purchase by Distributor, all appropriate Cisco Brand support
              Products for Distributor's internal use and for resale to
              Resellers. This option to resell Cisco brand services whereby
              services are delivered directly by Cisco to the end user is
              available in accordance with Cisco's then-current packaged
              service resale program. Availability of Cisco brand services is
              subject to geographic limitations. Information on where such
              services are available for resale and the process for reselling
              Cisco brand services is located at
              "http://www.cisco.com/warp/cproreg/45/index.html".

3.     COMSTOR RIGHTS AND OBLIGATIONS.

       3.1.   Prioritization and Escalation Guideline. Distributor will
              escalate problems to Cisco pursuant to the Escalation and
              Prioritization Guideline (Appendix A).

       3.2.   Spare Parts. Distributor shall maintain sufficient spare
              parts inventory to support its Customer base for a one month
              period under normal circumstances. Distributor shall maintain
              adequate manpower and facilities to assure prompt handling of
              inquiries, orders and shipments for Products.

       3.3.   Warranty Service. Distributor shall provide to its Resellers,
              at no charge, all warranty service for a minimum of the
              warranty period set forth in the published Product warranty
              provided with the original Product. Warranty service will
              consist of Hardware replacement service as follows:

              3.3.1. Hardware Advance Replacement. Distributor will ship
                     replacement parts in accordance with Cisco's then-current
                     published Product warranty applicable to the particular
                     Product.

       3.4.   Returns Coordination. Distributor will comply with the following:

              3.4.1. Distributor shall coordinate the return of all failed
                     parts, freight and insurance prepaid, to the Cisco repair
                     center.

              3.4.2. Distributor shall comply with the following RMA procedure:

                   3.4.2.1. Distributor will ensure all Products are property
                            packaged prior to being shipped, and will include a
                            written description of the failure and
                            specification of any changes or alterations made to
                            the Product. Product returned to Cisco will conform
                            in quantity and serial number to the RMA request.

                   3.4.2.2. Distributor shall tag each Product returned with
                            the RMA transaction number and a brief description
                            of the problem.

                   3.4.2.3. Cisco will not accept any Product returned which
                            is not accompanied by an RMA number.

       3.5    Resale of Cisco Brand Services. Where available, Distributor will
              offer for purchase by its Resellers, all appropriate Cisco brand
              support products through its normal products availability
              process.

       3.6    New Products. For new Products added to the Price List, including
              Products which become Cisco Products as a result of an
              acquisition by Cisco of another entity, Cisco may impose
              certification, installation, or training requirements on
              Distributor prior to allowing Distributor to buy and/or support
              such Products from Cisco.

4.   SERVICES NOT COVERED UNDER THIS AGREEMENT.

       4.1.   New Releases for Software.

                                                                             22
<PAGE>

       4.2.   Customization of existing Software for non-standard
              applications.

       4.3.   Support or replacement of Product that is altered, modified,
              mishandled, destroyed or damaged by natural causes or damaged
              during unauthorized use.

       4.4.   Software problems resulting from third party equipment or causes
              beyond Cisco's control.

       4.5.   Any Hardware upgrade of Product required to accept Software
              releases.

5.     TERMINATION. Upon expiration or termination of the Agreement, (i) all
       rights and licenses of Distributor hereunder shall terminate, (ii)
       Distributor shall immediately discontinue all representations that
       provides support service for Cisco Product, and (iii) access to CCO
       shall terminate.

6.     SOFTWARE LICENSE. Distributor acknowledges that it may receive Software
       as a result of services provided under this Agreement. Distributor
       agrees that it is licensed to distribute such Software only on Product
       covered under the services and subject to the terms and conditions of
       this Agreement and the Software license granted with the original
       acquisition. Except as otherwise specified in this Exhibit, Distributor
       shall not: copy, in whole or in part, Software or documentation; modify
       the Software, reverse compile or reverse assemble all or any portion of
       the Software; or rent, lease, distribute, sell, or create derivative
       works of the Software.

                                                                             23
<PAGE>

                                   APPENDIX A
             CISCO PROBLEM PRIORITIZATION AND ESCALATION GUIDELINE

To ensure that all problems are reported in a standard format, Cisco has
established the following problem priority definitions. These definitions will
assist Cisco in allocating the appropriate resources to resolve problems.
Distributor must assign a priority to all problems submitted to Cisco.

PROBLEM PRIORITY DEFINITIONS:
         Priority 1: An existing network is down or there is a critical
                     impact to the end user's business operation. Cisco,
                     Distributor and end user will commit full-time resources
                     to resolve the situation.
         Priority 2: Operation of an existing network is severely degraded,
                     or significant aspects of the end user's business
                     operation are being negatively impacted by unacceptable
                     network performance. Cisco, Distributor and end user will
                     commit full-time resources during Standard Business Hours
                     to resolve the situation.
         Priority 3: Operational performance of the network is impaired
                     while most business operations remain functional. Cisco,
                     Distributor and end user are willing to commit resources
                     during Standard Business Hours to restore service to
                     satisfactory levels.
         Priority 4: Information or assistance is required on Cisco product
                     capabilities, installation, or configuration. There is
                     clearly little or no impact to the end user's business
                     operation. Cisco, Distributor and end user are willing to
                     provide resources during Standard Business Hours to
                     provide information or assistance as requested.
Cisco encourages Distributor to reference this guide when Distributor-initiated
escalation is required. If Distributor does not feel that adequate forward
progress or the quality of Cisco service is satisfactory, Cisco encourages
Distributor to escalate the problem ownership to the appropriate level of Cisco
management by asking for the TAC Duty Manager.
CISCO ESCALATION GUIDELINE:
<TABLE>
--------------------------------------------------------------------------------------------
Elapsed Time      Priority 1               Priority 2           Priority 3       Priority 4
--------------------------------------------------------------------------------------------
<S>               <C>                      <C>                   <C>             <C>
1-Hour            Customer
                  Engineering
                  Manager
--------------------------------------------------------------------------------------------
4-Hour            Technical Support        Customer
                  Director                 Engineering Manager
--------------------------------------------------------------------------------------------
24-Hour           Vice President           Technical Support
                  Customer Advocacy        Director
--------------------------------------------------------------------------------------------
48-Hour           President (CEO)          Vice President
                                           Customer Advocacy
--------------------------------------------------------------------------------------------
72-Hour                                                         Customer
                                                                Engineering
                                                                Manager
--------------------------------------------------------------------------------------------
96-Hour                                    President (CEO)      Technical        Customer
                                                                Support          Engineering
                                                                Director         Manager
--------------------------------------------------------------------------------------------
</TABLE>
Note: Priority 1 problem escalation times are measured in calendar hours 24
hours per day, 7 days per week. Priority 2, 3 and 4 escalation times correspond
with Standard Business Hours.

The Cisco Manager to which the problem is escalated will take ownership of the
problem and provide the Distributor with updates. Cisco recommends that
Distributor-initiated escalation begin at the Customer Engineering Manager
level and proceed upward using the escalation guideline shown above for
reference. This will allow those most closely associated with the support
resources to correct any service problems quickly.

                                                                             24
<PAGE>

ACCESSING TAC:
North America, South America:         +1-800-553-2447 (within the United States)
                                      +1-408-526-7209
Europe, Middle East, Africa:          +32-2-778-4242
Asia Pacific:                         +1-800-805-227 (within Australia)
                                      +61-2-9935-4107

                                                                             25
<PAGE>

                  EXHIBIT F: COMSTOR'S REPORTING REQUIREMENTS

COMSTOR shall render weekly sales out reports on diskette, in ASCII Comma
Delimited Format, or other acceptable methods transmitted via email or
Electronic Data Interchange ("EDI"). Information provided will include the
following:

Day, month, and year sales activity occurred,
Cisco's Product number, internal Product number (assigned by COMSTOR),
Description of Product and Dealer name and Dealer's location,
Unit cost (COMSTOR's net buying price from Cisco at quantity 1), Quantity and
extended cost (cost multiplied by quantity).

Similarly, COMSTOR will provide weekly inventory reports in the same format as
sales out reports. These inventory reports will contain the following
information:

o    Cisco Product number,
o    COMSTOR product number,
o    Product description,
o    Quantity,
o    Unit cost, (COMSTOR's net buying price from Cisco (Wholesale or Global
     Price list, with standard applicable discount) at quantity of one and
     extended cost (cost multiplied by quantity);
o    Extended cost,
o    Quantity committed by COMSTOR to its customers (but not yet shipped to
     COMSTOR's customers)
o    Source
o    Inventory Date
o    On-hand Quantity
o    Committed Quantity
o    On Order Quantity with Cisco

The provisions of Inventory Balance (Article 9), Return of Discontinued/Obsolete
Products (Article 10) Price Protection (Article 14.5) and the Repurchase of
Products Upon Termination (Article 17.3) are contingent upon the receipt of
regular, timely POS and inventory reports from COMSTOR.

Cisco's obligation to provide these provisions is null and void if the
inventory reports required to validate COMSTOR's requests for the above
provisions are not provided to Cisco at the time of such request. Cisco and
COMSTOR agree to cooperate on future automation of POS and Inventory reporting.
It is the intention of the parties to facilitate Cisco's ability to obtain
weekly sales information from COMSTOR. COMSTOR agrees to use commercially
reasonable efforts, commensurate with the manner in which COMSTOR treats its
other leading vendors, in order to facilitate Cisco's ability to obtain weekly
sales information from COMSTOR via EDI.

                                                                             26
<PAGE>

                    EXHIBIT G: U.S. FEDERAL GOVERNMENT SALES

                              CISCO'S OBLIGATIONS

1.     Representations and Certifications
       Cisco understands that due to the nature of federal U.S. Government
bidding, Cisco may be required to enter into a procurement specific
non-disclosure agreement or make certain representations and certifications
before any Cisco Product(s) are sold or distributed into the federal government
marketplace. In addition, Cisco agrees to provide COMSTOR with statement(s) of,
and responses to, representations and certifications, as may be required for
specific government programs, contracts or opportunities. Cisco retains the
right at all times to determine its responses to, and whether it can agree to,
any specific representations and/or certification requests.

                             COMSTOR'S OBLIGATIONS

2.     Government Sale Specialists COMSTOR shall maintain a separate government
sales office, which shall include sales specialists with an understanding of
Government regulations and Government contract terms and conditions, to support
resellers and system integrators in the federal government marketplace.

3.     Configuration COMSTOR shall maintain a configuration facility for system
integration and testing in support of federal government specific contracts and
opportunities for resellers and system integrators.

4.     Reports

4.1    Point-of-Sales Reports

       In addition to the reporting requirements of Exhibit F of this
       Agreement, COMSTOR shall provide the following additional information on
       the regular, point-of-sale reports for all federal-related sales that
       occur (as granted by Cisco per this Exhibit), during the preceding.
       week. Cisco wishes to receive the Point-of-Sales Reports via BBS,
       Electronic Data Interchange (EDI) or diskette.

       The additional information provided will include alI of the following:

               o  Contract type (i.e. GSA, open market, Indefinite
                  Delivery/Indefinite Quantity, 8(a));
               o  Customer end-user (Government Agency), name, agency
                  department;
               o  Government Agency, Cabinet level/specific procuring office;
               o  Ship to address (street, city, state, country and zip/postal
                  code);
               o  Prime Federal Government Contract number, when available;
               o  Comstor's Invoice Number to the Reseller;
               o  Comstor's Sales Order Number to the Reseller

4.3    Discount Refund

       In order to obtain from Cisco a discount refund, as further described by
Attachment 1- to this Exhibit, COMSTOR must submit competed monthly Point of
Sales reports, as described under section 4.2 above, within thirty (30) days
after the close of each month.

       COMSTOR shall submit the weekly and monthly point-of-sales reports to
the following authorized Cisco personnel:

Contact Name:               Meena Almaneih, Finance Manager
                            ----------------------------------------------------
Contact Address:            Cisco Systems, Inc., 170 West Tasman Drive,
                            San Jose, CA. 95134-1706
                            ----------------------------------------------------
Telephone Number:           408-526-6831
                            ----------------------------------------------------
Email                       smulcron@cisco.com
                            ----------------------------------------------------
                            ----------------------------------------------------
Contact Name:               Attn: Federal Financial Analyst
                            ----------------------------------------------------

                                                                             27
<PAGE>

                            ----------------------------------------------------
Contact Address:            Cisco Systems, Inc., 13635 Dulles Technology
                            Dr., Herndon, VA 20171
                            ----------------------------------------------------
Telephone Number            703-484-5668
                            ----------------------------------------------------
Fax Number:                 703-484-5599
                            ----------------------------------------------------
Email                       Mbainbri@cisco.com
                            ----------------------------------------------------

                            ----------------------------------------------------
Contact Name:               Kathleen Chiolo
                            ----------------------------------------------------
Contact Address:            209 E. Myrtle Road, Wildwood Crest, NJ 08260
                            ----------------------------------------------------
Telephone Number:           (609) 522-6463
                            ----------------------------------------------------
Fax Number:                 (609) 522-6529
                            ----------------------------------------------------
email:                      kchiolo@cisco.com
                            ----------------------------------------------------

4.4 Pricing The prices and applicable discount for all relevant Cisco products
sold under this Exhibit are set forth in Attachment "1" attached hereto. The
pricing and discounts for Cisco's Products set forth in Attachment "1" shall
only apply to Cisco Products sold through this Exhibit into the federal
government marketplace. COMSTOR will, in its sole discretion, determine the
sale price to resellers and system integrators for such Cisco Products. All
Cisco Product pricing and discounts set forth pursuant to this Exhibit shall
not apply to, amend or affect the pricing and discounts set forth in connection
with any of Cisco's Products otherwise sold and distributed pursuant to this
Agreement.

4.5 Upon COMSTOR's request, Cisco may agree to provide, in writing, a "Firm
Fixed Discount" to Cisco's then-current published Global Price List, as
applicable, which shall guarantee the discount of Cisco's Product(s) for a
specific term under a specific federal government contract, as delineated in
such writing.

                                                                             28
<PAGE>

                           Attachment I to Exhibit G

                U.S. Federal Government Distribution Price List

                                   "DISCOUNT"

40% Off the list price (from the Cisco Global Price List) if product is listed
on Cisco's Wholesale Price List. If product is not on Cisco's Wholesale Price
List discount shall be 35% off the list price of Cisco's Global Price List.
Excluding Smarnet or other support offerings.

                                DISCOUNT REFUND

Discount Refund is the difference between the federal discount claimed and the
standard discount (Wholesale Price List) that the product is purchased at by
Comstor.

                                                                             29
<PAGE>

                           Attachment 2 to Exhibit G

                                  FAR CLAUSES

       A. Cisco will accept only the federal government contract flowdown
provisions in this Exhibit in any purchase order from COMSTOR. Cisco will not
accept any other flowdown provisions, including, but not limited to, Federal
Acquisition Regulation ("FAR"), Department of Defense ("DoD") FAR Supplement
("DFARS"), or NASA FAR Supplement ("NFS") provisions. Any such flowdown
provisions on COMSTOR's purchase orders or supplementary documentation not
specifically identified on this Exhibit are invalid, notwithstanding Cisco's
acceptance of such purchase orders or supplementary documentation.

       B. This Agreement pertains to the sale of "commercial items" as that
term is defined under FAR 2.101 and Part 12. "Notwithstanding any other clause
in the prime contract, only those clauses identified in the clause at 52.244-6
are required to be in agreements (subcontracts) for commercial items or
commercial components." FAR 44.402(b). The following FAR clauses, identified
under 52.244-6 are hereby incorporated by reference, with the same force and
effect as if they were given in full. Upon request the US Government will make
their full text available. For purposes of this Agreement, when appropriate in
adopting the terminology of all the following FAR clauses, the term 'contract'
shall mean this Agreement; the term "Contractor" shall mean Cisco; the term
"Government" and "Contracting Officer" shall mean Prime.

       52.222-26 Equal Opportunity (Apr 1984)
       52.222-35 Affirmative Action for Special Disabled & Vietnam Era Veterans
       (Apr 1984)
       52.222-36 Affirmative Action for Handicapped Workers (Apr 1984)

                                                                             30
<PAGE>

                        EXHIBIT H: SUBSIDIARY AGREEMENT

The subsidiary of _________ ("Parent Company") specified below ("Approved
Subsidiary ") agrees to comply with all of the terms and conditions imposed
upon COMSTOR in the attached Two Tier Nonexclusive Distributor Agreement (the
"Two Tier Distributor Agreement") entered into between Parent Company and Cisco
Systems, Inc. ("Cisco"). Approved Subsidiary acknowledges that for so long as
Approved Subsidiary is a "Subsidiary" (as defined in the Two Tier Distributor
Agreement) of Parent Company, Approved Subsidiary will have the right to
purchase only those Cisco products specified in the Two Tier Distributor
Agreement during the term thereof, pursuant to the rights and obligations of
COMSTOR under the Two Tier Distributor Agreement including but not limited to
the reporting requirements thereunder; provided, however, that the terms set
forth below shall apply to Approved Subsidiary instead of any terms regarding
the same subject matter thereof that apply to COMSTOR under the Two Tier
Distributor Agreement.

1.     The Territory for Approved Subsidiary is:_______________________

2.     Minimum Order Quantity

Within one (1) week of the Effective Date of this Subsidiary Agreement,
Subsidiary shall place an initial stocking order for immediate shipment equal
to__________________________________________.

Thereafter, the minimum order quantity for purchase orders placed by Approved
Subsidiary shall be ______________________________________.

The minimum order quantity shall be subject to change by mutual agreement of
both parties upon thirty (30) days prior written notice to Approved Subsidiary.

3.     Quarterly Sales Volume Goals

Approved Subsidiary's Annual Product Sales Volume Goals (In US$)

1st QTR           2nd QTR           3rd  QTR         4th QTR           TOTAL

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

Goals should be jointly reviewed on a quarterly basis.

4.     Recruitment of New Dealers

Approved Subsidiary's Quarterly goals For Recruitment of New Dealers

1st QTR           2nd QTR           3rd  QTR         4th QTR           TOTAL

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

       31
<PAGE>

Notice to Approved Subsidiary pursuant to the Two Tier COMSTOR Agreement shall
be addressed as follows, unless Approved Subsidiary indicates otherwise in
writing to Cisco:.

Address:
         -------------------------
         -------------------------
         -------------------------
Attn:
      ----------------------------

Notwithstanding anything to the contrary herein, Cisco or Approved Subsidiary
may terminate this Subsidiary Agreement at any time on the terms set forth in
Section 17.1 in the Two Tier Distributor Agreement, provided that Cisco may
terminate this Subsidiary Agreement immediately in the event that Approved
Subsidiary is no longer a "Subsidiary" (as defined in the Two Tier Distributor
Agreement) of Parent Company.

Parent Company hereby fully guarantees the financial and contractual
obligations of Subsidiary. Parent Company shall be jointly and severally liable
for the obligations of Subsidiary under the Two Tier Distributor Agreement.

Approved Subsidiary acknowledges that upon full execution of this Subsidiary
Agreement, the terms and conditions of any current distribution or resale
agreement for Cisco Products with Cisco will terminate and will be superseded
by the terms and conditions of this Subsidiary Agreement; thereafter, the terms
and conditions of any such distribution or resale agreement will have no
further force and effect.

                                                                             32
<PAGE>

                      EXHIBIT I: CISCO'S STANDARD WARRANTY

       "Hardware. Cisco warrants that for a period of ninety (90) days from the
date of shipment from Cisco that the Hardware will be free from defects in
material and workmanship under normal use. This limited warranty extends only
to Customer as original purchaser. Customer's sole and exclusive remedy and the
entire liability of Cisco and its suppliers under this limited warranty will
be, at Cisco's or its service center's option, shipment of an advance
replacement within five (5) working days at Cisco's expense, or a refund of the
purchase price if the Hardware is returned to the party supplying it to
Customer, if different than Cisco, freight and insurance prepaid. Cisco
replacement parts used in Hardware repair may be new or equivalent to new. All
articles must be returned in accordance with Cisco's then-current Return
Material Authorization (RMA) procedure."

       "Software. Cisco warrants that for a period of ninety (90) days from the
date of shipment from Cisco: (a) the media on which the Software is furnished
will be free of defects in materials and workmanship under normal use; and (b)
the Software substantially conforms to its published specifications. Except for
the foregoing, the Software is provided AS IS. This limited warranty extends
only to Customer as the original licensee. Customer's sole and exclusive remedy
and the entire liability of Cisco and its suppliers under this limited warranty
will be, at Cisco or its service center's option, repair, replacement, or
refund of the Software if reported (or, upon request, returned) to the party
supplying the Software to Customer, if different than Cisco. In no event does
Cisco warrant that the Software is error free or that Customer will be able to
operate the Software without problems or interruptions."

"Cisco represents that Products which it has designated as "Year 2000
Compliant" (or Status Description "Green") as set forth in the "Compliance
Table," (including accompanying Notes), located in Cisco's "Year 2000 Pages")
are "Year 2000 Compliant," meaning that, as delivered to Customer.

A.     The Products accurately process data and time calculations before and
       during the years 1999 and 2000.

B.     All manipulation of time-related data yields the desired results for
       valid date values within the application domain;

C.     Date elements in those Products use four digit storage and indicate
       century to eliminate the chance for errors;

D.     If a date element exists without a century indication, the correct
       century continues to be unambiguous and produces accurate results; and

E.     Software accurately processes date and time data when used in
       conjunction with other Year 2000 compliant software products."

       Should a Product that is so identified as "Year 2000 Compliant" not be
       Year 2000 Compliant or should Cisco otherwise breach the foregoing
       representation, Cisco will, as Customer's sole and exclusive remedy,
       repair or replace the Product so that it becomes Year 2000 Compliant or,
       if Cisco is unable to repair or replace the Product to make it Year 2000
       Compliant, Cisco will refund the purchase price of the Product paid to
       Cisco by Customer as depreciated or amortized by an equal annual amount
       over the lifetime of the Product, as established by Cisco, provided that
       Customer returns the Product to Cisco as originally delivered by Cisco
       (except for normal wear and tear) and pursuant to Cisco's then-current
       RMA policy. The foregoing representation and remedy shall only apply to
       Products returned prior to January 31, 2001, or to Products returned
       before the Products are no longer supported pursuant to Cisco's standard
       support policies, whichever event first occurs. Customer acknowledges
       that: (i) the Internet URL address and the web pages referred to above
       may be updated by Cisco from time to time and (ii) each Product ordered
       will be subject to Cisco's then-current "Year 2000 Pages."

       "Restrictions. This warranty does not apply it the product (a) has been
       altered, except by Cisco, (b) has not been installed, operated,
       repaired, or maintained in accordance with instructions supplied by
       Cisco, (c) has been subjected to abnormal physical or electrical stress,
       misuse, negligence, or accident, or (d) is used in ultrahazardous
       activities."

       "DISCLAIMER OF WARRANTY. EXCEPT AS SPECIFIED IN THIS SECTION 9, ALL
       EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS, AND WARRANTIES
       INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OR CONDITIONS OF
       MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, SATISFACTORY QUALITY,
       AGAINST INFRINGEMENT OR ARISING FROM A COURSE OF DEALING, USAGE, OR
       TRADE PRACTICE, ARE HEREBY

                                                                             33
<PAGE>

       EXCLUDED TO THE EXTENT ALLOWED BY APPLICABLE LAW. This disclaimer and
       exclusion shall apply even if the express warranty set forth above fails
       of its essential purpose."

Cisco 1 -Year Warranty (Return-to-Factory)
         The Cisco 1-Year Warranty currently applies to the following product
families located at the following
URL:http://www.cisco.com/warp/public/779/smbiz/service/smartnet/index.html

       Cisco warrants that for a period of one (1) year from the date of
shipment from Cisco, the hardware will be free from defects in material and
workmanship under normal use. This limited warranty extends only to customer as
original purchaser. Customer's exclusive remedy and the entire liability of
Cisco and its suppliers under this limited warranty will be, at Cisco's or its
service center's option, shipment of an advance replacement within ten (10)
working days at Cisco's expense, or repair upon return of the hardware to Cisco
freight prepaid; or, if neither of the foregoing is commercially reasonable, a
refund of the purchase price if the hardware is returned to the party supplying
it to customer, freight and insurance prepaid. Cisco replacement parts used in
hardware repair may be new or equivalent to new.

For Further Information:
Please see the Cisco Information Packet for general information about Cisco's
license and warranty, service and support packages, and safety and liability
information, as well as translations of the general warranty into several major
languages. The Cisco Information Packet also contains a customer comment card
for providing feedback on Cisco's technical documentation.

                                                                             34
<PAGE>

                     EXHIBIT J: GSA SCHEDULE AUTHORIZATION

       PREAMBLE

       Cisco desires to authorize Comstor to resell certain Cisco "Products"
under Comstor's GSA Schedule Contract GS-35F-4389G; and

       Cisco also desires to authorize Comstor to distribute certain Cisco
Products to other dealers that hold GSA Schedule Contracts that have been, or
will be awarded for products under FSC Group 70 ("the GSA Schedule Program");
and Comstor desires to serve as a GSA reseller and distributor for Cisco in
accordance with the terms and conditions stated herein;

       NOW, THEREFORE, in consideration of the following mutual covenants and
undertakings, and other good and valuable consideration the sufficiency of
which is hereby acknowledged, Cisco and Comstor agree as follows:

1.     SCOPE

1.1    Comstor is authorized to resell and distribute certain Cisco Products
       (per clause 2 below) under Comstor's GSA Schedule Contract.

1.2    Upon prior written approval from Cisco, Comstor shall be authorized to
       distribute certain Cisco Products (per clauses 2 and 4 below) to
       identified other GSA schedule contract holders for their resale under a
       GSA schedule contract.

2.     PRODUCTS

2.1.1  Comstor may resell or distribute under this Exhibit only the Cisco
       Products identified on Attachment A to Cisco's letter of supply dated
       July 13, 1998 ("Supply Letter"). However, during the term of this
       Exhibit, the Products identified on said Attachment A may be modified by
       Cisco to include other products, which Comstor may also sell or
       distribute hereunder.

2.1.2  Except as set forth in 2.1 above, Comstor shall obtain Cisco's prior,
       written consent regarding the resale or distribution hereunder of Cisco
       Products that are not identified on Attachment A, or modifications
       thereto, to Cisco's Supply Letter dated July 13, 1998.

2.1.3  Comstor shall notify GSA of any Cisco Product additions, deletions or
       other product changes to Comstor's GSA Schedule within thirty (30) days
       from the time that Cisco provides such written notice of such changes to
       Comstor.

3.     COMSTOR GSA PROGRAM QUALIFICATIONS

3.1    As a condition of service as a Cisco-authorized reseller under the
       GSA Schedule Program, Comstor hereby represents, warrants, and covenants
       the following:

   a.  Comstor is and will remain in compliance with all obligations under the
       Agreement, this Exhibit and Comstor's own GSA Schedule contract;

   b.  Comstor will use its best efforts to submit modifications to its GSA
       Schedule Contract in an expeditious fashion and to secure prompt
       approval of those modifications from GSA;

   c.  Comstor will ensure that its Cisco resale team shall include one (1)
       Cisco Certified Design Associate (CCDA), one (1) Cisco Certified Design
       Professional (CCDP) and one (1) Cisco Certified Intemetwork Expert
       (CCIE).

   d.  Comstor represents to Cisco that it is a reseller with "significant
       sales to the general public" of Cisco's products and is therefore not
       subject to the requirements regarding manufacturer information set forth
       under subsection 5 of Section G.4, "Commercial Sales Practices Format"
       page 82 of Solicitation No. FCIS-JB-980001 B, to the extent that such
       requirements are, or become,

                                                                             35
<PAGE>

       incorporated into Comstor's GSA Schedule Contract. Comstor agrees to
       notify Cisco immediately in the event that Comstor does not so qualify
       as a reseller, as set forth in this paragraph.

4.     DEALER GSA PROGRAM QUALIFICATIONS

4.1    All dealers to whom Comstor may distribute Cisco Products per this
       Exhibit shall, at a minimum, meet the criteria set forth in Exhibit C to
       the Agreement ("Minimum Terms and Conditions for Dealers");

4.2    In addition to the requirements set forth in Exhibit C to this
       Agreement, for the GSA reseller program business, dealers shall be Cisco
       Premiere certified and have an established federal government sales
       organization.

5.     PRICES

Prices for Cisco Products and Software sold by Comstor pursuant to this Exhibit
shall be determined solely by Comstor as a result of its own negotiations with
the GSA and/or between Comstor and other authorized dealers

6.     DURATION

This Exhibit shall run concurrently with a valid Supply Letter executed by
Cisco Systems. Termination of the Agreement or withdrawal of the Supply Letter
shall also constitute a termination of this Exhibit. However, a termination of
this Exhibit shall not constitute a termination of the Agreement.

7.     MISCELLANEOUS

7.1    Notice. The Notice provision of the Agreement (clause 25.6) is hereby
       amended to add the following Cisco Point of Contact for all matters
       related to this Exhibit: Tom Gillman, Manager Channel Operations, Cisco
       Systems, 13635 Dulles Technology Drive, Herndon, VA 20171, with a copy
       to Tara Flanagan, Public Sector Attorney, Cisco Systems, 13635 Dulles
       Technology Drive, Herndon, VA 20171.

7.2    Except as otherwise set forth in this Exhibit, all other terms of the
       Agreement shall be construed to apply to this Exhibit. In the event of
       any conflict between the terms of this Exhibit and the Agreement, the
       terms of the Exhibit shall take precedence over those of the Agreement.

7.3    Neither the parties' Agreement, nor this Exhibit, shall be construed as
       an agreement by Cisco to any of the terms and conditions of Comstor's
       GSA Schedule Contract or to any terms and conditions of the GSA Schedule
       Contract(s) of any dealer to whom Comstor may distribute products
       hereunder.

                                     -END-

                                                                             36
<PAGE>

                                  AMENDMENT 1

This Amendment ("Amendment") to the ("Agreement") by and between Cisco Systems,
Inc. ("Cisco"), a California corporation having its principal place of business
at 170 West Tasman Drive, San Jose, CA 95134, and COMSTOR Corporation
("Comstor"), a Virginia corporation having its principal place of business at
14116 Newbrook Dr. Chantilly, VA 22021.

WHEREAS, Cisco and Comstor have previously entered into the Agreement dated
July 15, 1999, as amended; and

NOW WHEREFORE, the parties agree to amend the Agreement as follows:

1).    Article 16. REPORTS AND RECORDS is amended to add the following:

16.6   Third Party Sourced Products. If COMSTOR resells Cisco product purchased
       from a source other than Cisco, COMSTOR shall collect serial numbers of
       such products and provide name and country of reseller and End User for
       each transaction in POS report. Monthly inventory reports will reflect
       COMSTOR'S inventory on the last day of the calendar month and will
       contain the following information: COMSTOR'S name, COMSTOR'S country,
       inventory report date, Cisco Product code, Product description,
       quantity, unit cost, extended cost. If COMSTOR purchases (for re-sale)
       Cisco product from a source other than Cisco, COMSTOR shall identify
       name and country of supplier in the monthly inventory report.

       The provisions of Inventory Balance (Article 9), Return of
       Discontinued/Obsolete Products (Article 10), Price Protection (Article
       14.5) and the Repurchase of Products Upon Termination (Article 17.3) are
       contingent upon the receipt of regular, timely, accurate and complete
       POS and inventory reports from COMSTOR. Cisco's obligations pursuant to
       these provisions is null and void if the POS and inventory reports
       (including the sourcing information described above) required to
       validate COMSTOR'S requests for the above provisions are not provided to
       Cisco at the time of such request.

16.7   Reseller Software License: If COMSTOR resells Cisco Product(s),
       purchased from a source other than Cisco, to a reseller, then COMSTOR
       shall inform the reseller that the Product(s) may not have the proper
       software license from Cisco. COMSTOR shall also instruct the reseller
       that they must contact Cisco in order to obtain the proper software
       license and this may require the payment of a software license fee
       directly to Cisco.

16.8   Warranty Void. Cisco may refuse to provide warranty service where
       COMSTOR is unable to document that the returned Product was purchased
       from COMSTOR in accordance with the serial number reporting procedure
       set forth in 16.6.

16.9   Resale to Federal, State or Local Government End Users

       If COMSTOR sells or offers for sale any Cisco product purchased from a
       source other than Cisco, for use by a Federal, State, or Local
       Government End User customer, COMSTOR shall:

       A.     Notify such Federal, State or Local Government End User customer
              in writing that the Cisco product was purchased from a source
              other than Cisco, and of the disclaimer set forth in clause (B)
              below of this provision; and

       B.     Indemnify, defend, and save harmless Cisco, its officers, agents,
              and employees from any and all claims and losses arising out of
              DISTRIBUTOR'S sale or offer(s) to sell any Cisco product
              purchased from a source other than Cisco, for use by a Federal,
              State or Local Government End User customer (including but not
              limited to costs or liabilities resulting from any changes or
              alterations made to the Cisco product by a party other than
              Cisco).

       C.     DISCLAIMER. If COMSTOR sells or offers for sale any Cisco product
              purchased from a source other than Cisco, for use by a Federal,
              State, or Local Government End User customer, any and all
              warranties, representations, certifications, or other commitments
              made by Cisco, including, but not limited to, those contained in
              any letters of supply

                                                                             37
<PAGE>

              issued by Cisco for any federal, state or local government
              schedule contracts, concerning Cisco products are hereby
              EXPRESSLY DISCLAIMED.

2).    All other terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the last date which is written below.

CISCO SYSTEMS, INC.                           COMSTOR CORP.

By: /s/ Rick Timmins                        By: /s/ Barry A. Culman
   ---------------------------------           ---------------------------------
     (Authorized Signature)                    (Authorized Signature)

Name: Rick Timmins                          Name: Barry A. Culman
     -------------------------------             -------------------------------
         Type/Print                                Type/Print

Title: VP WW Sales Finance                  Title: President
      ------------------------------              ------------------------------

Date:  August 12, 1999                      Date: August 12, 1999
     -------------------------------             -------------------------------

                                                                             38
<PAGE>

                                 ASSIGNMENT OF

                                    TWO-TIER

                   NONEXCLUSIVE DISTRIBUTOR AGREEMENT BETWEEN

                              COMSTOR CORPORATION

                                      AND

                              CISCO SYSTEMS, INC.

                              DATED JULY 15, 1999,

                                       TO

                               RBR NETWORKS, INC.

THIS ASSIGNMENT ("Assignment") OF THE TWO TIER NONEXCLUSIVE DISTRIBUTOR
AGREEMENT BETWEEN COMSTOR CORPORATION AND CISCO SYSTEMS ("Agreement"), which
shall become effective upon the closure of the acquisition of COMSTOR by
Westcon Group Inc., (the "Effective Date"); however, such assignment shall be
deemed null and void if the acquisition does not occur within thirty (30) days
from August 13, 1999, is between RBR Networks, Inc. ("RBR"), a New York
corporation, with its principal place of business at 520 White Plains Rd.,
Tarrytown, NY 10591, and COMSTOR CORPORATION, a Virginia corporation
("COMSTOR"), with its principal place of business at 14116 Newbrook Drive,
Chantilly, VA 20151, and CISCO SYSTEMS, INC. ("Cisco"), a California
corporation with its principal place of business at 170 West Tasman Drive, San
Jose, California 95134-1706.

                              W I T N E S S E T H:

       WHEREAS, COMSTOR desires to assign all of its rights and obligations
under the Agreement to RBR;

       WHEREAS, RBR desires to assume all of COMSTOR'S rights and obligations
under the Agreement; and

       WHEREAS, Cisco desires to grant the assignment of the Agreement to RBR.

       NOW THEREFORE, in consideration of the mutual promises herein contained
and other good and valuable consideration, RBR, COMSTOR and Cisco hereby agree
as follows:

I.     RBR shall assume all the rights and obligations of Comstor under the
       Agreement. Such assumption of rights and obligations shall take effect
       upon the Effective Date of this Assignment.

II.    COMSTOR shall relinquish all rights and obligations, except for monies
       currently owed to Cisco, to RBR. Cisco shall relinquish all rights and
       obligations owed to COMSTOR, to RBR. The relinquishment of rights and
       obligations to take effect upon the Effective Date. However, Cisco shall
       retain all rights and remedies against COMSTOR with respect to any
       amounts owing as of the Effective Date.

III.   This Assignment supersedes any previous agreements regarding assignment
       of the Agreement between the parties, including, but not limited to, the
       letter dated June 30, 1999.

IV.    This assignment shall include any written modifications or written
       amendments, which the parties have entered into with respect to the
       Agreement.

                                                                             39
<PAGE>

                                          (As Agreed to By:)

CISCO SYSTEMS, INC.                        COMSTOR CORP.

By: /s/ Rick Timmins                        By: /s/ Stanley Witkow
   ---------------------------------           ---------------------------------

Name: Rick Timmins                          Name: Stanley Witkow
     -------------------------------             -------------------------------

Title: VP WW Sales Finance                  Title: Secretary
      ------------------------------              ------------------------------

Date:  August 13, 1999                      Date: August 13, 1999
     -------------------------------             -------------------------------

RBR NETWORKS, INC.

By: /s/ Alan Marc Smith
   ---------------------------------

Name: Alan Marc Smith
     -------------------------------

Title: Vice President
      ------------------------------

Date:  August 13, 1999
     -------------------------------

                                                                             40
<PAGE>

                                 AMENDMENT 2 TO
                             TWO-TIER NONEXCLUSIVE
                             DISTRIBUTION AGREEMENT

WHEREAS, Cisco Systems ("Cisco") and Comstor Corporation ("COMSTOR") are
parties to a "Two-Tier Nonexclusive Distribution Agreement" dated as of June
15, 1999, as amended by Amendment 1, dated August 12, 1999 (the "Agreement"),
and

       WHEREAS, Cisco and COMSTOR desire to amend the Agreement,

       NOW THEREFORE, Cisco and COMSTOR agree to amend the Agreement as
follows:

1.     The first sentence of Article IX - INVENTORY BALANCE, is amended to read
       as follows:

Inventory Balance. COMSTOR has the option to return to Cisco, for credit, up to
five percent (5%) of the dollar value of Products from the Global and Wholesale
Price Lists shipped to COMSTOR and Comstor's customers in the preceding ninety
(90) day period. Products returned are limited to products on the Wholesale
Price List.

2.     Except as specifically amended in article 1, above, all other terms of
       the Agreement remain unchanged, and in full force and effect.

       IN WITNESS WHEREOF, the parties hereto have caused this Amendment 2 to
be dul executed as of the last date which is written below:

CISCO SYSTEMS, INC. ("Cisco")               COMSTOR CORPORATION ("COMSTOR")

By: /s/ Rick Timmins                        By: /s/ Alan M. Smith
   ---------------------------------           ---------------------------------
     its authorized representative               Its authorized representative

Name: Rick Timmins                          Name: Alan M. Smith
     -------------------------------             -------------------------------
         Typed or Printed                           Typed or Printed

Title: VP WW Sales Finance                  Title: VP
      ------------------------------              ------------------------------

Date:  June 30, 2000                        Date: June 2, 2000
     -------------------------------             -------------------------------

                                                                             41
<PAGE>

                                 AMENDMENT 3 TO
                             TWO-TIER NONEXCLUSIVE
                             DISTRIBUTION AGREEMENT

WHEREAS, Cisco Systems ("Cisco") and Comstor Corporation ("COMSTOR") are
parties to a "Two-Tier Nonexclusive Distribution Agreement" dated as of June
15, 1999, as amended by Amendment 1, dated August 12, 1999 (the "Agreement"),
and

       WHEREAS, Cisco and COMSTOR desire to amend the Agreement,

       NOW THEREFORE, Cisco and COMSTOR agree to amend the Agreement as
follows:

1.     Article I - 1.1 "Term of Agreement" is hereby extended to September 30,
       2000.

1.     Except as specifically amended in article 1, above, all other terms of
       the Agreement remain unchanged, and in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment 2 to be duly
executed as of the last date which is written below:

CISCO SYSTEMS, INC. ("Cisco")               COMSTOR CORPORATION ("COMSTOR")

By: /s/ Rick Timmins                        By: /s/ Alan M. Smith
   ---------------------------------           ---------------------------------
     its authorized representative               Its authorized representative

Name: Rick Timmins                          Name: Alan M. Smith
     -------------------------------             -------------------------------
        Typed or Printed                            Typed or Printed

Title: VP WW Sales Finance                  Title: VP
      ------------------------------              ------------------------------

Date:  June 30, 2000                        Date: June 2, 2000
     -------------------------------             -------------------------------

                                                                             42
<PAGE>

                                 AMENDMENT 4 TO
            TWO-TIER DISTRIBUTOR NONEXCLUSIVE DISTRIBUTOR AGREEMENT

       WHEREAS, Cisco Systems ('Cisco") and RBR Networks, Inc. d/b/a Comstor
("Comstor") are parties to a "Two-Tier Distributor Agreement" dated as of June
15, 1999, and as amended, (the "Agreement"), and

       WHEREAS, Cisco and Comstor desire to amend the Agreement as follows:

1)     Article I - 1.1 "Term of Agreement", is hereby extended to October 31,
       2000.

2)     Exhibit D to the current agreement is hereby replaced with the attached
       Exhibit D.

3)     All other terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their authorized representatives as of the last date which is
written below.

Cisco Systems, Inc. ("Cisco")               RBR Networks, Inc.

By:                                         By: /s/ Alan M. Smith
   ---------------------------------           ---------------------------------
     (Authorized Signature)                    (Authorized Signature)

Name:                                       Name: Alan M. Smith
     -------------------------------             -------------------------------
         Type/Print                                Type/Print

Title:                                      Title: C.O.O.
      ------------------------------              ------------------------------

Date:                                       Date: November 20, 2000
     -------------------------------             -------------------------------

                                                                             43
<PAGE>

                                 AMENDMENT 5 TO
                  TWO-TIER NON-EXCLUSIVE DISTRIBUTOR AGREEMENT

A.     RECITALS

       WHEREAS, Cisco Systems, Inc. "Cisco") and RBR Networks, Inc., doing
business as Comstor ("Comstor"), are parties to a "Two-Tier Nonexclusive
Distributor Agreement", dated as of June 15,1999, as amended (the "Agreement");
and

       WHEREAS, Cisco and Comstor desire to amend the Agreement as follows

B.     AMENDMENT

       (1)    Article I, sub-section 1.1, is amended to read as follows:

       "This Agreement shall commence on the date first set above and continue
       thereafter until January 31, 2001."

       (2)    All other terms and conditions of the Agreement remain unchanged,
              and in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this amendment to be duly
executed by their authorized representatives as of the fast date which is
written below.

Cisco Systems, Inc. ("Cisco")               RBR Networks, Inc. d/b/a Comstor
                                            ("Comstor")

By: /s/ Tushar Kothari                      By: /s/ Alan M. Smith
   ---------------------------------           ---------------------------------
     Its authorized representative               its authorized representative

Name: Tushar Kothari                        Name: Alan M. Smith
     -------------------------------             -------------------------------
        Typed or Printed                                Typed or Printed

Title: VP Channels                          Title: C.O.O.
      ------------------------------              ------------------------------

Date: November 27, 2000                     Date: November 27, 2000
     -------------------------------             -------------------------------

                                                                             44
<PAGE>

                 AMENDMENT 6 TO TWO-TIER DISTRIBUTION AGREEMENT

       WHEREAS, Cisco Systems, Inc. ("Cisco") and RBR Networks, Inc. as
successor in interest to Comstor Corporation ("Comstor") are parties to a
"Two-Tier Nonexclusive Distributor Agreement" dated as of June 15, 1999, and as
amended (the "Agreement"), and

       WHEREAS, Cisco and Comstor desire to amend the Agreement,

       NOW THEREFORE, Cisco and Comstor agree to amend the Agreement as
follows:

1.     The term of the Agreement is extended until the earlier of (a) August
       15, 2001, or (b) the execution of a replacement two-tier distribution
       agreement between the parties.

2.     All other terms and conditions of the Agreement will remain unchanged.

       IN WITNESS WHEREOF, the parties to the Agreement have caused this
Amendment to be duly executed as of the date last written below.

RBR Networks, Inc. d/b/a Comstor            Cisco Systems, Inc.

By: /s/ Alan M. Smith                       By: /s/ Rick Timmins
   ---------------------------------           ---------------------------------
     its authorized representative               Its authorized representative

Name: Alan M. Smith                         Name: Rick Timmins
     -------------------------------             -------------------------------
            Typed or Printed                        Typed or Printed

Title: Vice President                       Title: VP WW Sales Finance
      ------------------------------              ------------------------------

Date: February 16, 2001                     Date: February 16, 2001
     -------------------------------             -------------------------------

                                                                             45
<PAGE>

                 AMENDMENT 7 TO TWO-TIER DISTRIBUTION AGREEMENT

       WHEREAS, Cisco Systems. Inc ("Cisco") and RBR Networks, Inc. d/bla
Comstor Corporation ("Comstor") are parties to a "Two-Tier Nonexclusive
Distributor Agreement" dated as of June 15, 1999, and as amended (the
"Agreement"), and

       WHEREAS, Cisco and Comstor desire to amend the Agreement,

       NOW THEREFORE, Cisco and Comstor agree to amend the Agreement as
follows:

1.     The term of the Agreement is extended until November 15, 2001

2      All other terms and conditions of the Agreement will remain unchanged.

       IN WITNESS WHEREOF, the parties to the Agreement have caused this
Amendment to be duly executed as of the date last written below.

RBR Networks, Inc. d/b/a Comstor            Cisco Systems, Inc.

By: /s/ Alan Marc Smith                     By: /s/ Rick Timmins
   ---------------------------------           ---------------------------------
     its authorized representative               Its authorized representative

Name: Alan Marc Smith                       Name: Rick Timmins
     -------------------------------             -------------------------------
          Typed or Printed                          Typed or Printed

Title: Vice President                       Title: VP WW Sales Finance
      ------------------------------              ------------------------------

Date: August 15, 2001                       Date: August 23, 2001
     -------------------------------             -------------------------------

                                                                             46
<PAGE>

                 Exhibit B: Amendment to Distribution Agreement

                 AMENDMENT 8 TO TWO-TIER DISTRIBUTION AGREEMENT

WHEREAS, Cisco Systems, Inc. ("Cisco") and Comstor, Inc. ("COMSTOR") are
parties to a "Two Tier Nonexclusive Distributor Agreement" (the "Agreement")
dated as of June 15, 1999, as amended, and

WHEREAS, Cisco and Comstor desire to amend the Agreement as provided below,

NOW THEREFORE, Cisco and Comstor agree to amend the Agreement as follows:

Point 1.

The "Table of Contents" to the the Agreement is amended by adding at the end
the following:

Exhibit K: List of Westcon Affiliates:

Point 2.

Article II of me Agreement, "Definitions," is amended by adding at the end of
Article II the following additional definitions:

       (l)    "Affiliate Sourced Product' means a Product purchased by Comstor
              directly from one of the Westcon entities identified in Exhibit
              K, attached hereto and incorporated herein by this reference,
              which (x) was purchased by such Westcon entity directly from
              Cisco Systems, Inc. or a Cisco Systems Inc. subsidiary that
              distributes Products in the country where such Product was
              purchased by the Westcon entity (e.g., Cisco Systems
              International, B.V. in the European union, the European Economic
              Area, the Middle East, and Africa); and (y) was not, at time of
              purchase or thereafter prior to its receipt by Comstor, the
              subject of a price deviation provided by Cisco Systems Inc. or
              its distribution subsidiary to the Westcon entity which purchased
              such Product from Cisco Systems Inc. or its distribution
              subsidiary.

       (m)    "Third Party Sourced Product" means any Product obtained by
              Comstor from any unaffiliated person or entity other than Cisco
              unless previously approved by Cisco. Notwithstanding the
              foregoing, the term "Third Party Sourced Product" shall not
              include any Affiliate Sourced Product (as defined herein).

Point 3.

Article XVl of the Agreement, "Reports and Records," is amended by adding at
the end of Article XVI the following new sub-articles 16.10 and 16.11:

16.10  In addition to the reporting requirements set out in sub-articles 16.1
       through 16.9 above, not later than fifteen (15) days following the
       effective date of Amendment 8 to the Agreement, COMSTOR agrees that it
       will report the following additional information to Cisco:

       A.     With respect to any Product or Service as to which Cisco has
              provided to COMSTOR a price deviation, COMSTOR will report to
              Cisco, within five (5) business days following its sale or
              redistribution of such Product or Service, (a) COMSTOR's adjusted
              cost basis for such Product or Service at the time of COMSTOR's
              sale or redistribution thereof, adjusted to reflect any deviation
              provided by Cisco to COMSTOR; and (b) the Cisco transaction
              identification number (e.g., price deviation number or
              promotional bulletin number) used by Cisco to identify the price
              deviation applicable To such Product or Service.

       B.     With respect to any Product or Service resold or redistributed by
              COMSTOR, including any Third-Party Sourced Product, COMSTOR will
              report to Cisco, within five (5) business days following its
              resale or redistribution, the serial number of the Product or
              Service, provided that COMSTOR shall not be required to provide
              serial number information for

                                                                             47
<PAGE>

              any Product or Service for which Cisco does not provide a serial
              number at the time of its sale of such Product or Service.

       C.     For each Product which COMSTOR wishes to return to Cisco,
              including any Product COMSTOR wishes to return to Cisco pursuant
              to Articles IX and X of this Agreement, COMSTOR will, at least
              seven (7) days prior to its return, provide Cisco with the serial
              number of the Product to be returned.

       D.     Within fifteen (15) days following the Effective Date of this
              Amendment, Cisco and COMSTOR agree to establish a process whereby
              COMSTOR will identify and report to Cisco by sales order number,
              invoice number, or other identifying characteristic each Product
              returned to COMSTOR by any Dealer To which COMSTOR previously
              sold or redistributed such Product.

16.11  COMSTOR will obtain Cisco's prior written consent, which will not
       unreasonably be withheld (provided that Cisco's desire to derive
       increased revenues shall not be deemed to be an unreasonable basis for
       withholding Cisco's consent) before reselling or redistributing any
       Affiliate Sourced Product in the Territory.

Point 4.

Article IX of the Agreement, "Inventory Balance," is amended by adding the
following new paragraph after clause (f) of Article IX:

Notwithstanding any other provision of this Article IX, COMSTOR may not return
to Cisco, whether pursuant to this Article IX or any other provision of this
Agreement, any Third Parry Sourced Products.

Point 5.

Article X of the Agreement, "Return of Discontinued/Obsolete & DOA Products,"
is amended by adding the following new paragraph after the sentence "During
this sixty (60) day period, Cisco shall bear all costs of shipping and risk of
loss of DOA and in-warranty Products to Cisco's location to COMSTOR."

Notwithstanding any other provision of this Article X, COMSTOR may not return
to Cisco. whether pursuant to this Article X or any other provision of this
Agreement, any Third-Party Sourced Product.

Point 6.

Except as specifically provided in Points 1 through 5 above, all terms and
conditions of the Agreement, as previously amended in Amendments 1 through 7,
remain unchanged.

IN WITNESS WHEREOF, Cisco and Comstor has caused this Amendment to be executed
and effective as of the date last signed below.

Comstor, Inc.                               Cisco Systems, Inc.

By: /s/ Alan Marc Smith                     By: /s/ Rick Timmins
   ---------------------------------           ---------------------------------
     its authorized representative               Its authorized representative

PRINTED NAME: Alan Marc Smith               PRINTED  Rick Timmins
             -----------------------                ----------------------------

Title: President & CEO                      Title: VP WW Sales Finance
      ------------------------------              ------------------------------

Date: September 21, 2001                    Date: September 24, 2001
     -------------------------------             -------------------------------

                                                                             48
<PAGE>

           AMENDMENT 9 TO TWO-TIER NONEXCLUSIVE DISTRIBUTOR AGREEMENT

                                AMENDMENT NO. 9

This Amendment 9 ("Amendment") to the Two-Tier Nonexclusive Distributor
Agreement ("Agreement") by and between Cisco Systems, Inc. ("Cisco"), a
California corporation having its principal place of business at 170 West
Tasman Drive, San Jose, CA, 95134, and Comstor, Inc., f/k/a RBR Networks, Inc.,
d/b/a Comstor Corporation ("Comstor") a Virginia corporation with its principal
place of business at 14116 Newbrook Drive, Chantilly, VA 22021, is effective as
of August 30, 2002 ("Effective Date").

WHEREAS, Cisco and Comstor have previously entered into the Agreement effective
June 15, 1999; and

NOW THEREFORE, the parties agree to amend the Agreement as follows:

1).    Article 1.1, Term of Agreement, is hereby deleted and replaced with the
       following:

       "The term of the Agreement shall extend until October 31, 2002. The
       foregoing term extension is hereby deemed to have commenced on January
       31, 2002."

2).    All other terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the Effective Date.

Cisco Systems, Inc.                       Comstor, Inc. f/k/a RBR Networks, Inc.
                                          d/b/a Comstor Corp.

By: /s/ Rick Timmins                        By: /s/ Alan Marc. Smith
   ---------------------------------           ---------------------------------
     (Authorized Signature)                    (Authorized Signature)

Name: Rick Timmins                          Name: Alan Marc. Smith
     -------------------------------             -------------------------------
         Type/Print                                Type/Print

Title: VP WW Sales Finance                  Title: Vice President
      ------------------------------              ------------------------------

Date:  September 13, 2002                   Date: September 13, 2002
     -------------------------------             -------------------------------

                                                                             49
<PAGE>

                            AMENDMENT NO. 10 TO THE
                  TWO-TIER NONEXCLUSIVE DISTRIBUTION AGREEMENT

This Amendment No. 10 ("Amendment") to the Two-Tier Nonexclusive Distribution
Agreement ("Agreement') by and between Cisco Systems, Inc. ("Cisco"), a
California corporation having its principal place of business at 170 West
Tasman Drive, San Jose, CA, 95134, and Comstor, Inc., f/k/a RBR Networks, Inc.,
d/b/a Comstor Corporation ("COMSTOR") a Virginia corporation with its principal
place of business at 14116 Newbrook Drive, Chantilly, VA 22021, is effective as
of the date last signed in the signature block provided below ("Effective
Date").

WHEREAS, Cisco and COMSTOR have previously entered into the Agreement effective
June 15, 1999; NOW THEREFORE, the parties agree to amend the Agreement as
follows:

1.     The following is hereby added after the last line in the Table of
       Contents on page 2 of the Agreement:

              "EXHIBIT K: Refurbished Products Terms and Conditions
              ____________ Amendment No. 10, p.2"

2.     The following Section 1.4 is hereby added to Article I of the Agreement,
       titled Scope and Term of the Agreement:

       "1.4   Refurbished Products.

       COMSTOR's ability to redistribute Refurbished Products shall be subject
       to the terms and conditions set forth in Exhibit K, titled Refurbished
       Products Terms and Conditions."

This Amendment consists of this signature page and the attached Exhibit K,
which is hereby incorporated into the Agreement by reference. This Amendment
shall be subject to all the terms and conditions of the Agreement. Except to
the extent that this Amendment conflicts with the Agreement, all the terms and
conditions in the Agreement that apply to Products shall also apply to
Refurbished Products, as defined in Exhibit K. In the event of conflict between
the terms and conditions of this Amendment and the Agreement, the Amendment
shall take precedence and govern solely within the scope identified in Section
2.0 of the attached Exhibit K.

This Amendment and the Agreement constitute the complete agreement between the
parties hereto concerning the subject matter of this Amendment and replaces any
prior or contemporaneous oral or written communications between the parties.
There are no conditions, understandings, agreements, representations or
warranties, express or implied, which are not specified herein. This Amendment
may only be modified by a written document executed by the parties hereto. All
capitalized terms in this Amendment that are not defined below shall have the
same meaning as in the Agreement. Any orders accepted or Refurbished Product
delivered after the date this Amendment but before the Effective Date shall,
upon the Effective Date, be deemed covered by the provisions of this Amendment,
except for any deviations in price. Except as amended herein, all other terms
and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed. Each party warrants and represents that its respective signatories
whose signatures appear below have been and are on the date of signature duly
authorized to execute this Amendment.

Comstor, Inc.                               Cisco Systems, Inc.

By: /s/ Jeanne Raffiani                     By: /s/ Rick Timmins
   ---------------------------------           ---------------------------------

Printed Name: Jeanne Raffiani               Printed Name: Rick Timmins
             -----------------------                     -----------------------

Title: Vice President                       Title: VP Corp. Finance
      ------------------------------              ------------------------------

Date: September 25, 2002                    Date: October 3, 2002
     -------------------------------             -------------------------------

                                                                    Page 1 of 3
<PAGE>

              EXHIBIT K: REFURBISHED PRODUCTS TERMS AND CONDITIONS

1.0    DEFINITIONS.

       Hardware is the tangible portion of the Refurbished Product that Cisco
       provides to COMSTOR.

       Refurbished Product means, individually or collectively as
       appropriate, hardware, licensed Software, Documentation, developed
       products, supplies, accessories, and goods to the foregoing, listed in
       the Wholesale Price List with an "RF" suffix as part of the Product
       identifier.

2.0    SCOPE.

       This Exhibit sets forth the terms and conditions for COMSTOR's
       purchase of Hardware and license of Software, and redistribution of
       Refurbished Products during the term of this Exhibit.

3.0    APPOINTMENT OF COMSTOR.

       3.1    By this Exhibit, Cisco makes, and COMSTOR accepts, the
              appointment of COMSTOR as an authorized, non-exclusive
              distributor of Refurbished Products (a) to Dealers located in the
              Territory, and (b) to Dealers for resale to U.S. Federal
              Government End Users solely as permitted in Exhibit G of the
              Agreement. COMSTOR agrees to use its commercially reasonable
              efforts to distribute Refurbished Products solely to Dealers
              located in the Territory. Those Dealers may resell Refurbished
              Products only to End Users who intend to use the Refurbished
              Products in the Territory.

       3.2    COMSTOR is authorized to resell only those Refurbished Products
              which are listed in the Wholesale Price List.

       3.3    For new Refurbished Products added to the Wholesale Price List,
              including products or services which become available to Cisco as
              a result of an acquisition by Cisco of another entity, Cisco may,
              at Cisco's expense, impose certification, installation, or
              training requirements on COMSTOR prior to allowing COMSTOR to
              purchase, resell, or provide support for such Refurbished
              Products.

       3.4    COMSTOR agrees not to solicit orders for Refurbished Products, or
              engage salespeople or establish warehouses or other distribution
              centers for the redistribution of Refurbished Products, outside
              the Territory, except to the extent advertising is placed in a
              particular advertising medium (except catalogs) which is
              distributed both inside and outside the Territory.

4.0    ORDERS. COMSTOR shall purchase Refurbished Products pursuant to Article
       III of the Agreement, titled "Purchase Orders."

5.0    PAYMENT. Prices for Refurbished Products payable by COMSTOR shall be
       those specified in Cisco's then current Wholesale Price List as updated
       from time to time by Cisco, subject to the same discount rate that
       applies to Products under the Agreement. All other terms specified in
       Article XIV, titled "Payment and Invoicing", shall apply to the
       Refurbished Products.

6.0    SOFTWARE DISTRIBUTION RIGHTS. COMSTOR shall only have the right to
       distribute Software in connection with Refurbished Products: (i) during
       the term of this Exhibit; (ii) within the Territory; and (iii) pursuant
       to Article V of the Agreement, titled "Proprietary Rights and Software
       Licensing."

                                                                    Page 2 of 3

<PAGE>

7.0    RESALE OF REFURBISHED PRODUCTS. COMSTOR acknowledges that each
       Refurbished Product made available to COMSTOR by Cisco on the
       Refurbished Products Price List has been previously used. COMSTOR agrees
       that, in its resale of any Refurbished Product, it will:

       7.1    not remove any label or other markings provided by Cisco with
              such products that refer to the Refurbished Products as used or
              refurbished;

       7.2    at all times in its advertising, promotion, and resale of the
              Refurbished Products to Dealers, advertise, promote, or resell
              each such product as used or refurbished; and

       7.3    promptly notify Cisco in the event it becomes aware that any
              Dealer or any other person to which COMSTOR has sold or
              transferred Refurbished Products, has (a) removed any label or
              other markings provided by Cisco with such products that refer to
              the Refurbished Products as used or refurbished; or (b)
              advertised, promoted, or resold any Refurbished Products as new
              or unused.

8.0    REQUIREMENTS FOR DEALERS

       8.1    COMSTOR shall only resell Refurbished Products to Dealers
              authorized by Cisco.
       8.2    From time to time, Cisco may, by written notice require that
              COMSTOR cease accepting orders for Refurbished Products from
              particular Dealers for the following reasons: (a) the Dealer is
              promoting, advertising, or selling Refurbished Products as new or
              unused; (b) the Dealer is promoting, advertising, or selling
              Refurbished Products outside of the Territory; (c) the Dealer is
              a Cisco competitor; or (d) the Dealer has engaged in actions
              which, in Cisco's reasonable judgment, are contrary to law or to
              Cisco's best interests. COMSTOR agrees promptly to comply with
              any such written request with respect to any orders from such a
              Dealer which COMSTOR receives effective not more than fifteen
              (15) days following Cisco's request.

9.0    SUPPORT

       Support shall be provided in accordance with Exhibit E of the Agreement.

10.0   TERM AND TERMINATION.

       10.1   This Exhibit shall commence on the Effective Date and expire upon
              termination of the Agreement, provided that this Exhibit may be
              terminated earlier for convenience, for any reason or no reason,
              by either party upon thirty (30) days prior written notice to the
              other.

       10.2   Effect of Termination. Upon termination or expiration of this
              Exhibit:

              10.2.1 All rights and licenses of COMSTOR hereunder shall
                     terminate and COMSTOR shall immediately discontinue all
                     representations that it is a Cisco Distributor of
                     Refurbished Products.

              10.2.2 The due date of all monies due either party shall
                     automatically be accelerated such that they become due and
                     payable on the effective date of termination, even if
                     longer terms had been provided previously.

              10.2.3 COMSTOR will return to Cisco any equipment loaned by Cisco
                     to COMSTOR for purposes of testing, training, or technical
                     support of Refurbished Products.

              10.2.4 Article XVII, Section 17.3 of the Agreement, titled
                     "Rights and Repurchase of Products Upon Termination",
                     shall also apply to the extent that they relate to the
                     Refurbished Products.

              10.2.5 Termination of this Exhibit shall have no effect on the
                     term of the Agreement.

              10.2.6 Article XXV Subsection 25,13, titled "Survival", shall
                     apply to the extent that it relates to the Refurbished
                     Products, and Section 7 of this Exhibit shall also survive
                     termination or expiration of this Exhibit.

                                                                    Page 3 of 3
<PAGE>

          AMENDMENT 11 TO TWO-TIER NONEXCLUSIVE DISTRIBUTOR AGREEMENT

                                AMENDMENT NO. 11

This Amendment 11 ("Amendment") to the Two-Tier Nonexclusive Distributor
Agreement ("Agreement") by and between Cisco Systems, Inc. ("Cisco"), a
California corporation having its principal place of business at 170 West
Tasman Drive, San Jose, CA, 95134, and Comstor, Inc., f/k/a RBR Networks, Inc.,
("Comstor") a New York corporation with a place of business at 14116 Newbrook
Drive, Chantilly, VA 22021, is effective as of August 30, 2002 ("Effective
Date").

WHEREAS, Cisco and Comstor have previously entered into the Agreement effective
June 15, 1999; and

NOW THEREFORE, the parties agree to amend the Agreement as follows:

1)     Article 1.1, Term of Agreement, is hereby deleted and replaced with the
       following:

       "The term of the Agreement shall commence on the Agreement Effective
       Date and extend until December 31, 2002 unless extended by written
       agreement of both parties or sooner terminated as set forth below."

2)     All other terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the Effective Date.

Cisco Systems, Inc.                       Comstor, Inc. f/k/a RBR Networks, Inc.

By: /s/ Gregg Whitney                       By: /s/ Jeanne Raffiani
   ---------------------------------           ---------------------------------
     (Authorized Signature)                    (Authorized Signature)

Name: Greg Whitney for Rick Timmins         Name: Jeanne Raffianih
      (VP WW Sales Finance)
     -------------------------------             -------------------------------
         Type/Print                                Type/Print

Title: Director of Finance                  Title: Vice President
      ------------------------------              ------------------------------

Date:  November 21, 2002                    Date: November 7, 2002
     -------------------------------             -------------------------------

                                                                    Page 1 of 1
<PAGE>

          AMENDMENT 12 TO TWO-TIER NONEXCLUSIVE DISTRIBUTOR AGREEMENT

                                AMENDMENT NO. 12

This Amendment 12 ("Amendment") to the Two-Tier Nonexclusive Distributor
Agreement ("Agreement") by and between Cisco Systems, Inc. ("Cisco"), a
California corporation having its principal place of business at 170 West
Tasman Drive, San Jose, CA, 95134, and Comstor, Inc., f/k/a RBR Networks, Inc.,
("Comstor") a New York corporation with a place of business at 14116 Newbrook
Drive, Chantilly, VA 22021, is effective as of the last date signed below
("Amendment Date").

WHEREAS, Cisco and Comstor have previously entered into the Agreement effective
June 15, 1999; and

NOW THEREFORE, the parties agree to amend the Agreement as follows:

1)     Article 1.1, Term of Agreement, is hereby deleted and replaced with the
       following:

       "The term of the Agreement shall commence on the Agreement Effective
       Date and extend until March 31, 2003 unless extended by written
       agreement of both parties or sooner terminated as set forth below. If
       the Agreement shall have expired prior to the Amendment Date, any orders
       received and Products purchased between the date of expiration and the
       Amendment Date shall be in all respects deemed made under the Agreement
       as in effect prior to this Amendment."

2)     All other terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the Amendment Date.

Cisco Systems, Inc.                       Comstor, Inc. f/k/a RBR Networks, Inc.

By: /s/ Rick Timmins                        By: /s/ Jeanne Raffiani
   ---------------------------------           ---------------------------------
     (Authorized Signature)                    (Authorized Signature)

Name: Rick Timmins                          Name: Jeanne Raffianih
     -------------------------------             -------------------------------
         Type/Print                                Type/Print

Title: VP WW Sales Finance                  Title: Vice President
      ------------------------------              ------------------------------

Date:  February 12, 2003                    Date: January 21, 2003
     -------------------------------             -------------------------------

                                                                    Page 1 of 1

<PAGE>

          AMENDMENT 13 TO TWO-TIER NONEXCLUSIVE DISTRIBUTOR AGREEMENT

                                AMENDMENT NO. 13

This Amendment 13 ("Amendment") to the Two-Tier Nonexclusive Distributor
Agreement ("Agreement") by and between Cisco Systems, Inc. ("Cisco"), a
California corporation having its principal place of business at 170 West
Tasman Drive, San Jose, CA, 95134, and Comstor, Inc., f/k/a RBR Networks, Inc.,
("Comstor") a New York corporation with a place of business at 14116 Newbrook
Drive, Chantilly, VA 22021, is effective as of the last date signed below
("Amendment Date").

WHEREAS, Cisco and Comstor have previously entered into the Agreement effective
June 15, 1999; and

NOW THEREFORE, the parties agree to amend the Agreement as follows:

1)     Article 1.1, Term of Agreement, is hereby deleted and replaced with the
       following:

       "The term of the Agreement shall commence on the Agreement Effective
       Date and extend until June 30, 2003 unless extended by written agreement
       of both parties or sooner terminated as set forth below. If the
       Agreement shall have expired prior to the Amendment Date, any orders
       received and Products purchased between the date of expiration and the
       Amendment Date shall be in all respects deemed made under the Agreement
       as in effect prior to this Amendment."

2)     All other terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the Amendment Date.

Cisco Systems, Inc.                       Comstor, Inc. f/k/a RBR Networks, Inc.

By: /s/ Rick Timmins                        By: /s/ Alan Marc. Smith
   ---------------------------------           ---------------------------------
     (Authorized Signature)                    (Authorized Signature)

Name: Rick Timmins                          Name: Alan Marc. Smith
     -------------------------------             -------------------------------
         Type/Print                                Type/Print

Title: VP WW Sales Finance                  Title: Vice President
      ------------------------------              ------------------------------

Date:  April 28, 2003                       Date: April 4, 2003
     -------------------------------             -------------------------------

                                                                    Page 1 of 1

<PAGE>

                                                        Agreement No.: _________

          AMENDMENT 14 TO TWO-TIER NONEXCLUSIVE DISTRIBUTOR AGREEMENT

                                AMENDMENT NO. 14

This Amendment 14 ("Amendment") to the Two-Tier Nonexclusive Distributor
Agreement ("Agreement") by and between Cisco Systems, Inc. ("Cisco"), a
California corporation having its principal place of business at 170 West
Tasman Drive, San Jose, CA, 95134, and Westcon Group North America, Inc., as
successor in interest to Comstor, Inc. f/k/a RBR Networks, Inc., ("Comstor") a
New York corporation with a place of business at 14116 Newbrook Drive,
Chantilly, VA 22021, is effective as of the last date signed below ("Amendment
Date").

WHEREAS, Cisco and Comstor have previously entered into the Agreement effective
June 15, 1999; and

NOW THEREFORE, the parties agree to amend the Agreement as follows:

1)     Article 1.1, Term of Agreement, is hereby deleted and replaced with the
       following:

       "The term of the Agreement shall commence on the Agreement Effective
       Date and extend until December 31, 2003 unless extended by written
       agreement of both parties or sooner terminated as set forth below. If
       the Agreement shall have expired prior to the Amendment Date, any orders
       received and Products purchased between the date of expiration and the
       Amendment Date shall be in all respects deemed made under the Agreement
       as in effect prior to this Amendment."

2)     All other terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the Amendment Date.

Cisco Systems, Inc.                       Westcon Group North America, Inc., as
                                          successor in interest to Comstor, Inc.
                                          f/k/a/ RBR Networks, Inc.

By: /s/ Keith Goodwin                       By: /s/ Russ Fein
   ---------------------------------           ---------------------------------
     (Authorized Signature)                    (Authorized Signature)

Name: Keith Goodwin, VP                     Name: Russ Fein
     -------------------------------             -------------------------------
         Type/Print                                Type/Print

Title: For Rick Timmins                     Title: VP Worldwide Bus. Op.
       (VP WW Sales Finance)
      ------------------------------              ------------------------------

Date:  September 15, 2003                   Date: September 5, 2003
     -------------------------------             -------------------------------

                                                                    Page 1 of 1

<PAGE>

                                                        Agreement No.: _________

          AMENDMENT 15 TO TWO-TIER NONEXCLUSIVE DISTRIBUTOR AGREEMENT

                                AMENDMENT NO. 15

This Amendment 15 ("Amendment") to the Two-Tier Nonexclusive Distributor
Agreement ("Agreement") by and between Cisco Systems, Inc. ("Cisco"), a
California corporation having its principal place of business at 170 West
Tasman Drive, San Jose, CA, 95134, and Westcon Group North America, Inc., as
successor in interest to Comstor, Inc. f/k/a RBR Networks, Inc., ("Comstor") a
New York corporation with a place of business at 14116 Newbrook Drive,
Chantilly, VA 22021, is effective as of the last date signed below ("Amendment
Date").

WHEREAS, Cisco and Comstor have previously entered into the Agreement effective
June 15, 1999, and

NOW THEREFORE, the parties agree to amend the Agreement as follows:

1)     Article 1.1, Term of Agreement, is hereby deleted and replaced with the
       following:

       "The term of the Agreement shall commence on the Agreement Effective
       Date and extend until March 31, 2004 unless extended by written
       agreement of both parties or sooner terminated as set forth below. If
       the Agreement shall have expired prior to the Amendment Date, any orders
       received and Products purchased between the date of expiration and the
       Amendment Date shall be in all respects deemed made under the Agreement
       as in effect prior to this Amendment."

2)     All other terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the Amendment Date.

Cisco Systems, Inc.                      Westcon Group North America, Inc., as
                                         successor in interest to Comstor, Inc.
                                         f/k/a/ RBR Networks, Inc.

By: /s/ Rick Timmins                        By: /s/ Alan Marc. Smith
   ---------------------------------           ---------------------------------
     (Authorized Signature)                    (Authorized Signature)

Name: Rick Timmins                          Name: Alan Marc. Smith
     -------------------------------             -------------------------------
         Type/Print                                Type/Print

Title: VP WW Sales Finance                  Title: President
      ------------------------------              ------------------------------

Date:  January 27, 2004                     Date: January 16, 2004
     -------------------------------             -------------------------------

                                                                    Page 1 of 1<PAGE>
                                                                     Exhibit 4.1

                                                                  EXECUTION COPY

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                    Depositor

                            LITTON LOAN SERVICING LP,
                                    Servicer

                                       and

                              JPMORGAN CHASE BANK,
                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT
                            Dated as of June 1, 2004

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

              SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-BC2
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                  PAGE
<S>                                                                                               <C>
ARTICLE I     DEFINITIONS ....................................................................       1

ARTICLE II    CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES ...................      39

     SECTION 2.01.      Conveyance of Mortgage Loans .........................................      39

     SECTION 2.02.      Acceptance by Trustee of the Mortgage Loans ..........................      41

     SECTION 2.03.      Representations, Warranties and Covenants of the Depositor ...........      42

     SECTION 2.04.      Representations and Warranties of the Servicer .......................      45

     SECTION 2.05.      Substitutions and Repurchases of Mortgage Loans Which Are Not
                        "Qualified Mortgages" ................................................      46

     SECTION 2.06.      Authentication and Delivery of Certificates ..........................      47

     SECTION 2.07.      REMIC Elections ......................................................      47

     SECTION 2.08.      Covenants of the Servicer ............................................      50

     SECTION 2.09.      [RESERVED] ...........................................................      50

     SECTION 2.10.      [RESERVED] ...........................................................      50

     SECTION 2.11.      Permitted Activities of the Trust ....................................      50

     SECTION 2.12.      Qualification Special Purpose Entity .................................      50

ARTICLE III   ADMINISTRATION AND SERVICING OF MORTGAGE LOANS .................................      50

     SECTION 3.01.      Servicer to Service Mortgage Loans ...................................      50

     SECTION 3.02.      Servicing and Subservicing; Enforcement of the Obligations of Servicer      51

     SECTION 3.03.      Rights of the Depositor and the Trustee in Respect of the Servicer ...      52

     SECTION 3.04.      Trustee to Act as Servicer ...........................................      52

     SECTION 3.05.      Collection of Mortgage Loan Payments; Collection Account; Certificate
                        Account ..............................................................      53

     SECTION 3.06.      Collection of Taxes, Assessments and Similar Items; Escrow Accounts ..      56

     SECTION 3.07.      Access to Certain Documentation and Information Regarding the
                        Mortgage Loans .......................................................      57

     SECTION 3.08.      Permitted Withdrawals from the Collection Account and Certificate
                        Account ..............................................................      57

     SECTION 3.09.      [RESERVED] ...........................................................      59

     SECTION 3.10.      Maintenance of Hazard Insurance ......................................      59
</TABLE>

                                       i
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                  PAGE
<S>                                                                                               <C>
     SECTION 3.11.      Enforcement of Due-On-Sale Clauses; Assumption Agreements ............      60

     SECTION 3.12.      Realization Upon Defaulted Mortgage Loans; Determination of Excess
                        Proceeds .............................................................      61

     SECTION 3.13.      Trustee to Cooperate; Release of Mortgage Files ......................      64

     SECTION 3.14.      Documents Records and Funds in Possession of Servicer to be Held for
                        the Trustee ..........................................................      65

     SECTION 3.15.      Servicing Compensation ...............................................      65

     SECTION 3.16.      Access to Certain Documentation ......................................      65

     SECTION 3.17.      Annual Statement as to Compliance ....................................      66

     SECTION 3.18.      Annual Independent Public Accountants' Servicing Statement; Financial
                        Statements ...........................................................      66

     SECTION 3.19.      Rights of the NIM Insurer ............................................      66

     SECTION 3.20.      Periodic Filings .....................................................      66

     SECTION 3.21.      Annual Certificate by Trustee ........................................      67

     SECTION 3.22.      Annual Certificate by Servicer .......................................      68

     SECTION 3.23.      Prepayment Penalty Reporting Requirements ............................      69

     SECTION 3.24.      Statements to Trustee ................................................      69

     SECTION 3.25.      Indemnification ......................................................      69

     SECTION 3.26.      Nonsolicitation ......................................................      70

     SECTION 3.27.      Existing Servicing Agreement .........................................      70

ARTICLE IV    DISTRIBUTIONS ..................................................................      70

     SECTION 4.01.      Advances .............................................................      70

     SECTION 4.02.      Reduction of Servicing Compensation in Connection with Prepayment
                        Interest Shortfalls ..................................................      71

     SECTION 4.03.      Distributions on the REMIC Interests .................................      71

     SECTION 4.04.      Distributions ........................................................      71

     SECTION 4.05.      Monthly Statements to Certificateholders .............................      76

ARTICLE V     THE CERTIFICATES ...............................................................      78

     SECTION 5.01.      The Certificates .....................................................      78

     SECTION 5.02.      Certificate Register; Registration of Transfer and Exchange of
                        Certificates .........................................................      79
</TABLE>

                                       ii
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                  PAGE
<S>                                                                                               <C>
     SECTION 5.03.      Mutilated, Destroyed, Lost or Stolen Certificates ....................      83

     SECTION 5.04.      Persons Deemed Owners ................................................      83

     SECTION 5.05.      Access to List of Certificateholders' Names and Addresses ............      83

     SECTION 5.06.      Book-Entry Certificates ..............................................      84

     SECTION 5.07.      Notices to Depository ................................................      85

     SECTION 5.08.      Definitive Certificates ..............................................      85

     SECTION 5.09.      Maintenance of Office or Agency ......................................      85

ARTICLE VI    THE DEPOSITOR AND THE SERVICER .................................................      85

     SECTION 6.01.      Respective Liabilities of the Depositor and the Servicer .............      85

     SECTION 6.02.      Merger or Consolidation of the Depositor or the Servicer .............      86

     SECTION 6.03.      Limitation on Liability of the Depositor, the Servicer and Others ....      86

     SECTION 6.04.      Limitation on Resignation of Servicer ................................      86

     SECTION 6.05.      Errors and Omissions Insurance; Fidelity Bonds .......................      87

ARTICLE VII   DEFAULT; TERMINATION OF SERVICER ...............................................      87

     SECTION 7.01.      Events of Default ....................................................      87

     SECTION 7.02.      Servicer Trigger Event ...............................................      89

     SECTION 7.03.      Trustee to Act; Appointment of Successor .............................      90

     SECTION 7.04.      Notification to Certificateholders ...................................      91

ARTICLE VIII  CONCERNING THE TRUSTEE .........................................................      91

     SECTION 8.01.      Duties of Trustee ....................................................      91

     SECTION 8.02.      Certain Matters Affecting the Trustee ................................      92

     SECTION 8.03.      Trustee Not Liable for Mortgage Loans ................................      93

     SECTION 8.04.      Trustee May Own Certificates .........................................      94

     SECTION 8.05.      Trustee's Fees .......................................................      94

     SECTION 8.06.      Indemnification of Trustee; Expenses .................................      94

     SECTION 8.07.      Eligibility Requirements for Trustee .................................      95

     SECTION 8.08.      Resignation and Removal of Trustee ...................................      95

     SECTION 8.09.      Successor Trustee ....................................................      96

     SECTION 8.10.      Merger or Consolidation of Trustee ...................................      96
</TABLE>

                                      iii
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                  PAGE
<S>                                                                                               <C>
     SECTION 8.11.      Appointment of Co-Trustee or Separate Trustee ........................      96

     SECTION 8.12.      Tax Matters ..........................................................      98

ARTICLE IX    TERMINATION ....................................................................     100

     SECTION 9.01.      Termination upon Liquidation or Repurchase of all Mortgage Loans .....     100

     SECTION 9.02.      Final Distribution on the Certificates ...............................     101

     SECTION 9.03.      Additional Termination Requirements ..................................     102

ARTICLE X     MISCELLANEOUS PROVISIONS .......................................................     103

     SECTION 10.01.     Amendment ............................................................     103

     SECTION 10.02.     Counterparts .........................................................     104

     SECTION 10.03.     Governing Law ........................................................     105

     SECTION 10.04.     Intention of Parties .................................................     105

     SECTION 10.05.     Notices ..............................................................     105

     SECTION 10.06.     Severability of Provisions ...........................................     106

     SECTION 10.07.     Assignment ...........................................................     106

     SECTION 10.08.     Limitation on Rights of Certificateholders ...........................     106

     SECTION 10.09.     Inspection and Audit Rights ..........................................     107

     SECTION 10.10.     Certificates Nonassessable and Fully Paid ............................     107

     SECTION 10.11.     Third Party Rights ...................................................     107

     SECTION 10.12.     Additional Rights of the NIM Insurer .................................     107

     SECTION 10.13.     Reserved .............................................................     108

     SECTION 10.14.     Assignment; Sales; Advance Facilities ................................     108
</TABLE>

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

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

      The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of (i) two real estate mortgage investment conduits in
a tiered structure, (ii) the right to receive (x) prepayment penalties on the
Mortgage Loans, (y) amounts paid by the Servicer or the Seller in respect of
prepayment charges or waivers thereof pursuant to this Agreement and (z) 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, (iii) the grantor trusts described in Section 2.07
hereof and (iv) the Cap Contract and Cap Contract Account. The Lower Tier REMIC
will consist of all of the assets constituting the Trust Fund (other than the
assets described in clauses (ii), (iii) and (iv) above and the Lower Tier REMIC
Regular Interests) and will be evidenced by the Lower Tier REMIC Regular
Interests (which will be uncertificated and will represent the "regular
interests" in the Lower Tier REMIC) and the Class LTR Interest as the single
"residual interest" in the Lower Tier REMIC. The Trustee will hold the Lower
Tier REMIC Regular Interests. The Upper Tier REMIC will consist of the Lower
Tier REMIC Regular Interests and will be evidenced by the REMIC Regular
Interests (which will represent the "regular interests" in the Upper Tier REMIC)
and the Residual Interest as the single "residual interest" in the Upper Tier
REMIC. The Class R Certificate will represent beneficial ownership of the Class
LTR Interest and the Residual Interest. The "latest possible maturity date" for
federal income tax purposes of all interests created hereby will be the Latest
Possible Maturity Date.

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

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

                                   ARTICLE I
                                  DEFINITIONS

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

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

      Accrual Period: With respect to each Class of Certificates and the Lower
Tier REMIC Regular Interests and any Distribution Date, the period commencing on
the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
such Distribution Date. All calculations of interest on each Class of
Certificates and the Lower Tier REMIC Regular Interests will be made on the
basis of the actual number of days elapsed in the related Accrual Period and a
360 day year. Notwithstanding the foregoing, the initial Accrual Period for each
Lower Tier REMIC Regular Interest and the Class C Certificates will have 30
days.

                                       1
<PAGE>
      Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate which 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 of payments of
principal and interest (net of the Servicing Fee Rate) on the Mortgage Loans
that were due during the applicable Due Period and not received as of the close
of business on the related Determination Date, less the aggregate amount of any
such Delinquent payments that the Servicer has determined would constitute a
Non-Recoverable Advance were an advance to be made with respect thereto;
provided, however, that with respect to any Mortgage Loan that is (x) a second
lien Mortgage Loan or (y) has been converted to an REO Property, the obligation
to make advances shall only be to payments of interest.

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

                                       2
<PAGE>
      Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction where the related Mortgaged Property is located to reflect of
record the sale and assignment of the Mortgage Loan to the Trustee, which
assignment, notice of transfer or equivalent instrument may, if permitted by
law, be in the form of one or more blanket assignments covering Mortgages
secured by Mortgaged Properties located in the same county.

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

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

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

      Auction Termination Price: In the case of an Auction Termination, as of
the initial Distribution Date on or after the Auction Termination Date, an
amount equal to the sum of (A) the aggregate Stated Principal Balance of each
Mortgage Loan (other than any Mortgage Loan that has become an REO Property),
plus accrued interest thereon at the applicable Mortgage Rate through the Due
Date preceding distribution of the proceeds, the fair market value of any REO
Property, plus accrued interest thereon, (B) any unreimbursed out-of-pocket
costs and expenses owed to the Trustee (including any costs and expenses
incurred in connection with the Auction Termination) or the Servicer and any
unreimbursed Servicing Fees, Advances and Servicing Advances, (C) all interest
accrued on, as well as amounts necessary to retire the principal balance of, the
notes guaranteed by the NIM Insurer, (D) any and all amounts then owed to the
NIM Insurer and (E) any costs and damages incurred by the Trust Fund (or the
Trustee on behalf of the Trust Fund) in connection with any violation of any
anti-predatory or anti-abusive lending laws.

      Available 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 based on the Net Mortgage Rates in
effect on the related Due Date divided by (y) the aggregate Certificate
Principal Balance (prior to distributions on such Distribution Date) of the
Class A-1, Class A-2, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and
Class R Certificates 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.

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

      Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.06). As of the Closing Date, each of
the Class A-1, Class A-2, Class M-1, Class M-2, Class M-3, Class B-1 and Class
B-2 Certificates constitutes a Class of Book-Entry Certificates.

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

      Cap Contract: The amended confirmation and agreement and any related
confirmation thereto, between the Trust Fund or Trustee and Credit Suisse First
Boston International (in the form of Exhibit O hereto).

      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 Trust Fund and designated "JPMorgan Chase Bank, as trustee, in
trust for registered holders of Specialty Underwriting and Residential Finance
Trust, Mortgage Loan Asset-Backed Certificates, Series 2004-BC2." Funds in the
Cap Contract Account shall be held in trust for the Trust Fund for the uses and
purposes set forth in this Agreement.

      Cap Contract Notional Balance: With respect to any Distribution Date, the
Cap Contract Notional Balance set forth below for such Distribution Date:

                            ONE-MONTH LIBOR CAP TABLE

<TABLE>
<CAPTION>
                                                                         1ML STRIKE       1ML STRIKE
                  BEGINNING                         NOTIONAL BALANCE    LOWER COLLAR     UPPER COLLAR
PERIOD             ACCRUAL       ENDING ACCRUAL           ($)                (%)              (%)
------             -------       --------------           ---                ---              ---
<S>               <C>            <C>                <C>                 <C>              <C>
   1              06/24/04          07/25/04         575,000,000.00         6.210            8.985
   2              07/25/04          08/25/04         569,898,863.26         6.210            8.985
   3              08/25/04          09/25/04         563,578,999.78         6.210            8.985
   4              09/25/04          10/25/04         556,044,443.02         6.426            8.985
   5              10/25/04          11/25/04         547,313,344.24         6.210            8.985
   6              11/25/04          12/25/04         537,405,129.46         6.426            8.985
   7              12/25/04          01/25/05         526,353,820.63         6.210            8.985
   8              01/25/05          02/25/05         514,227,820.70         6.210            8.985
   9              02/25/05          03/25/05         501,313,228.29         6.905            8.985
  10              03/25/05          04/25/05         487,740,945.89         6.211            8.985
  11              04/25/05          05/25/05         474,517,946.41         6.428            8.985
  12              05/25/05          06/25/05         461,661,720.78         6.213            8.985
  13              06/25/05          07/25/05         449,161,902.51         6.429            8.985
  14              07/25/05          08/25/05         437,008,422.18         6.214            8.985
  15              08/25/05          09/25/05         425,191,498.82         6.215            8.985
  16              09/25/05          10/25/05         413,701,631.53         6.432            8.985
  17              10/25/05          11/25/05         402,529,591.45         6.216            8.985
  18              11/25/05          12/25/05         391,666,413.86         6.433            8.985
  19              12/25/05          01/25/06         381,092,015.68         6.218            8.985
  20              01/25/06          02/25/06         370,315,101.45         6.219            8.985
  21              02/25/06          03/25/06         353,511,870.16         7.027            8.985
  22              03/25/06          04/25/06         337,404,496.34         7.910            8.985
  23              04/25/06          05/25/06         322,192,780.53         8.183            8.985
  24              05/25/06          06/25/06         307,770,774.81         7.892            8.985
  25              06/25/06          07/25/06         294,376,382.02         8.146            8.985
  26              07/25/06          08/25/06         285,345,061.48         7.868            8.985
  27              08/25/06          09/25/06         276,713,254.27         7.895            8.985
</TABLE>

                                       4
<PAGE>
<TABLE>
<S>               <C>            <C>                <C>                 <C>              <C>
  28              09/25/06          10/25/06         268,358,836.74         8.725            8.985
  29              10/25/06          11/25/06         260,283,841.97         8.430            8.985
  30              11/25/06          12/25/06         252,466,450.48         8.709            8.985
  31              12/25/06          01/25/07         244,897,945.56         8.408            8.985
  32              01/25/07          02/25/07         237,570,055.92         8.398            8.985
</TABLE>

      Cap Contract Termination Date: The Distribution Date in February 2007.

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

      Certificate Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05(f) in the name of the Trustee for the
benefit of the Certificateholders and designated "JPMorgan Chase Bank, as
trustee, in trust for registered holders of Specialty Underwriting and
Residential Finance Trust, Mortgage Loan Asset-Backed Certificates, Series
2004-BC2." 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 Certificates and the 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 distributions and allocations of
Realized Losses have been made, a portion of the Class C Interest Carry Forward
Amount will be added to the Class C Certificate Principal Balance so that the
Class C Certificate Principal Balance equals the Overcollateralization Amount.
No interest will accrue on such portion. Notwithstanding the foregoing, on any
Distribution Date relating to a Prepayment 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 Realized Loss or any
Applied Realized Loss Amount has been applied 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, to the extent
allocable to principal, (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

                                       5
<PAGE>
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 Holders of Certificates of a particular
Class as a condition to the taking of any action hereunder. The Trustee and the
NIM Insurer are entitled to rely conclusively on a certification of the
Depositor or any Affiliate of the Depositor in determining which Certificates
are registered in the name of an Affiliate of the Depositor.

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

      Class A Certificates: Any of the Class A-1 and Class A-2 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) 61.60% (or 60.30% in the event a Stepup Trigger Event
is in effect) of the Stated Principal Balances of the Mortgage Loans as of the
end of the immediately preceding Due Period, and (2) the excess of the Stated
Principal Balances of the Mortgage Loans as of the end of the immediately
preceding Due Period over the Minimum Required Overcollateralization Amount;
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 Certificate: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A hereto, 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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) 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. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

      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 (excluding any Class A-1 Interest Carryover Amount)
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.

                                       6
<PAGE>
      Class A-1 Interest Carryover Amount: As of any Distribution Date, the sum
of (1) if on such Distribution Date the Pass-Through Rate for the Class A-1
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class A-1 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class A-1 Margin for such Distribution Date, up to the
Maximum Rate Cap, over (B) the amount of interest payable on the Class A-1
Certificates at the Available Funds Cap, up to but not exceeding the Maximum
Rate Cap for such Distribution Date and (2) the Class A-1 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04(e)(vii), together with interest thereon at a rate equal to the sum
of One-Month LIBOR and the applicable Class A-1 Margin for such Distribution
Date.

      Class A-1 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 0.265% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.530% per annum.

      Class A-1 Pass-Through Rate: For the first Distribution Date, 1.55625% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

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

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

      Class A-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2 Pass-Through Rate on
the Class A-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Class A-2 Current Interest or a Class A-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 A-2 Certificates. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

      Class A-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2 Current Interest with respect to
prior Distribution Dates (excluding any Class A-1A Interest Carryover Amount)
over (B) the amount actually distributed to the Class A-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 A-2 Pass-Through Rate for the related Accrual
Period.

      Class A-2 Interest Carryover Amount: As of any Distribution Date, the sum
of (1) if on such Distribution Date the Pass-Through Rate for the Class A-2
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class A-2 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class A-2 Margin for such Distribution Date, up to the
Maximum Rate Cap, over (B) the amount of interest payable on the Class A-2
Certificates at the Available Funds Cap, up to but not exceeding the Maximum
Rate Cap for such Distribution Date and (2) the Class A-2 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04(e)(vii), together

                                       7
<PAGE>
with interest thereon at a rate equal to the sum of One-Month LIBOR and the
applicable Class A-2 Margin for such Distribution Date.

      Class A-2 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 0.270% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.540% per annum.

      Class A-2 Pass-Through Rate: For the first Distribution Date, 1.56125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

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

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

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

      Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) 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. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

      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 (excluding any Class B-1 Interest Carryover Amount)
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 Interest Carryover Amount: As of any Distribution Date, the sum
of (1) if on such Distribution Date the Pass-Through Rate for the Class B-1
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class B-1 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class B-1 Margin for such Distribution Date, up to the
Maximum Rate Cap, over (B) the amount of interest payable on the Class B-1
Certificates at the Available Funds Cap, up to but not exceeding the Maximum
Rate Cap for such Distribution Date and (2) the Class B-1 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04(e)(vii), together with interest thereon at a rate equal to the sum
of One-Month LIBOR and the applicable Class B-1 Margin for such Distribution
Date.

                                       8
<PAGE>
      Class B-1 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 2.200% per annum and, as of any
Distribution Date after the Auction Termination Date, 3.300% per annum.

      Class B-1 Pass-Through Rate: For the first Distribution Date, 3.49125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      Class B-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the 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 sum of 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 (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distributions of the Class M-3 Principal Distribution Amount
on such Distribution Date), and (E) the Class B-1 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 95.00%
(or 93.70% in the event a Stepup Trigger Event is in effect) of the Stated
Principal Balances of the Mortgage Loans as of the end of the immediately
preceding Due Period and (B) the excess of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period over the
Minimum Required Overcollateralization Amount. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of the Class A Certificates, Class R
Certificates 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 Applied Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance.

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

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

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

      Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to

                                       9
<PAGE>
be made as of such first day) 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. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

      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 (excluding any Class B-2 Interest Carryover Amount)
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 Interest Carryover Amount: As of any Distribution Date, the sum
of (1) if on such Distribution Date the Pass-Through Rate for the Class B-2
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class B-2 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class B-2 Margin for such Distribution Date, up to the
Maximum Rate Cap, over (B) the amount of interest payable on the Class B-1
Certificates at the Available Funds Cap, up to but not exceeding the Maximum
Rate Cap for such Distribution Date and (2) the Class B-2 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04(e)(vii), together with interest thereon at a rate equal to the sum
of One-Month LIBOR and the applicable Class B-2 Margin for such Distribution
Date.

      Class B-2 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 4.00% per annum and, as of any
Distribution Date after the Auction Termination Date, 6.00% per annum.

      Class B-2 Pass-Through Rate: For the first Distribution Date, 5.29125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-2 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      Class B-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the 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 sum of 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 (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class B-1 Certificate Principal
Balance (after taking into account distributions of the Class B-1 Principal
Distribution Amount on such Distribution Date) and (F) the Class B-2 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 97.50% (or 96.20% in the event a Stepup Trigger Event is in
effect) of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the

                                       10
<PAGE>
Certificate Principal Balance of each Class of the Class A Certificates, Class R
Certificates, 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 Applied 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 C Applied Realized Loss Amount: As of any Distribution Date, the sum
of all Applied Realized Loss Amounts with respect to the Mortgage Loans which
have been applied to the reduction of the Certificate Principal Balance of the
Class C Certificates.

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

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

      Class C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class C Distributable Interest
Rate on a notional amount equal to the aggregate of the principal balance of the
Lower Tier REMIC Regular Interests immediately prior to such Distribution Data,
plus the interest portion of any previous distributions on such Class that is
recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class C Certificates.

      Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of the interest rates on the Lower Tier
REMIC Regular Interests (treating for purposes of this clause (b) the interest
rate on each of the Lower Tier REMIC Marker Interests as being subject to a cap
equal to the interest rate of the Corresponding Certificates and treating the
Class LTX 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.

      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 Applied Realized Loss Amount on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class C Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."

                                       11
<PAGE>
      Class LTA-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Corresponding Certificates and an interest rate equal to the Net
Rate.

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

      Class LTM-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 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 1/2 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 1/2 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 LTX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) the aggregate
Cut-off Date Principal Balance of the Mortgage Loans over (ii) the aggregate
initial principal balance of the Lower Tier REMIC Marker Classes and an interest
rate equal to the Net Rate.

      Class M Certificates:  Any of the Class M-1, Class M-2 and Class M-3
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, in the form of Exhibit A hereto, 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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of

                                       12
<PAGE>
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. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.

      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 (excluding any Class M-1 Interest Carryover Amount)
over (B) the amount actually distributed to the Class M-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 M-1 Pass-Through Rate for the related Accrual
Period.

      Class M-1 Interest Carryover Amount: As of any Distribution Date, the sum
of (1) if on such Distribution Date the Pass-Through Rate for the Class M-1
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class M-1 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class M-1 Margin for such Distribution Date, up to the
Maximum Rate Cap, over (B) the amount of interest payable on the Class M-1
Certificates at the Available Funds Cap, up to but not exceeding the Maximum
Rate Cap for such Distribution Date and (2) the Class M-1 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04(e)(vii), together with interest thereon at a rate equal to the sum
of One-Month LIBOR and the applicable Class M-1 Margin for such Distribution
Date.

      Class M-1 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 0.550% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.825% per annum.

      Class M-1 Pass-Through Rate: For the first Distribution Date, 1.84125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      Class M-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the 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 sum of 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 immediately prior to such Distribution Date over
(2) the lesser of (A) 75.00% (or 73.70% in the event a Stepup Trigger Event is
in effect) of the Stated Principal Balances of the Mortgage Loans as of the end
of the immediately preceding Due Period and (B) the excess of the Stated
Principal Balances for the Mortgage Loans as of the end of the immediately
preceding Due Period over the Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of the
Class A Certificates and Class R Certificates has been reduced to zero, the
Class M-1 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-1 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A Certificates and Class R Certificates and (II) in no event will the
Class M-1 Principal Distribution Amount with respect to any Distribution Date
exceed the Class M-1 Certificate Principal Balance.

                                       13
<PAGE>
      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 Applied 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, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

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

      Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Class 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. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

      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 (excluding any Class M-2 Interest Carryover Amount)
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 Interest Carryover Amount: As of any Distribution Date, the sum
of (1) if on such Distribution Date the Pass-Through Rate for the Class M-2
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class M-2 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class M-2 Margin for such Distribution Date, up to the
Maximum Rate Cap, over (B) the amount of interest payable on the Class M-2
Certificates at the Available Funds Cap, up to but not exceeding the Maximum
Rate Cap for such Distribution Date and (2) the Class M-2 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04(e)(vii), together with interest thereon at a rate equal to the sum
of One-Month LIBOR and the applicable Class M-2 Margin for such Distribution
Date.

      Class M-2 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 1.200% per annum and, as of any
Distribution Date after the Auction Termination Date, 1.800% per annum.

      Class M-2 Pass-Through Rate: For the first Distribution Date, 2.49125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

                                       14
<PAGE>
      Class M-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Certificate Principal Balances of the Class A,
Class R and Class M-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 sum of 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 (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date) and
(C) the Class M-2 Certificate Principal Balance immediately prior to such
Distribution Date over (2) the lesser of (A) 86.10% (or 84.80% in the event a
Stepup Trigger Event is in effect) of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates, Class R Certificates and the
Class M-1 Certificates has been reduced to zero, the Class M-2 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class M-2 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class R
and Class M-1 Certificates and (II) in no event will the Class M-2 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-2
Certificate Principal Balance.

      Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Applied 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, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

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

      Class M-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) 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. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

      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 (excluding any Class M-3 Interest Carryover Amount)
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

                                       15
<PAGE>
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.

      Class M-3 Interest Carryover Amount: As of any Distribution Date, the sum
of (1) if on such Distribution Date the Pass-Through Rate for the Class M-3
Certificates is based upon the Available Funds Cap, the excess of (A) the amount
of interest the Class M-3 Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class M-3 Margin for such Distribution Date, up to the
Maximum Rate Cap, over (B) the amount of interest payable on the Class M-3
Certificates at the Available Funds Cap, up to but not exceeding the Maximum
Rate Cap for such Distribution Date and (2) the Class M-3 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04(e)(vii), together with interest thereon at a rate equal to the sum
of One-Month LIBOR and the applicable Class M-3 Margin for such Distribution
Date.

      Class M-3 Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 1.430% per annum and, as of any
Distribution Date after the Auction Termination Date, 2.145% per annum.

      Class M-3 Pass-Through Rate: For the first Distribution Date, 2.72125% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      Class M-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Certificate Principal Balances of the Class A,
Class R, Class M-1 and Class M-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 sum of 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 (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date) and (D) the Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 89.50%
(or 88.20% in the event a Stepup Trigger Event is in effect) of the Stated
Principal Balances of the Mortgage Loans as of the end of the immediately
preceding Due Period and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of the end of the immediately preceding Due Period over the
Minimum Required Overcollateralization Amount. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of the Class A Certificates, the Class R
Certificates, the Class M-1 Certificates and the Class M-2 Certificates has been
reduced to zero, the Class M-3 Principal Distribution Amount will equal the
lesser of (x) the outstanding Certificate 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 and Class M-2 Certificates
and (II) in no event will the Class M-3 Principal Distribution Amount with
respect to any Distribution Date exceed the Class M-3 Certificate Principal
Balance.

      Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-3 Applied 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."

                                       16
<PAGE>
      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.

      Class R Certificate: The Class R Certificate executed by the Trustee and
authenticated by the Trustee in substantially the form set forth in Exhibit A.

      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 the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) 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. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

      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 (excluding any Class R Interest Carryover Amount) 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 Interest Carryover Amount: As of any Distribution Date, the sum of
(1) if on such Distribution Date the Pass-Through Rate for the Class R
Certificate is based upon the Available Funds Cap, the excess of (1) the amount
of interest the Class R Certificate would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of One-Month
LIBOR and the applicable Class R Margin for such Distribution Date, up to the
Maximum Rate Cap, over (2) the amount of interest payable on the Class R
Certificate at the Available Funds Cap, up to but not exceeding the Maximum Rate
Cap for such Distribution Date and (2) the Class R Interest Carryover Amount for
all previous Distribution Dates not previously paid pursuant to Section
4.04(e)(vii), together with interest thereon at a rate equal to the sum of
One-Month LIBOR and the applicable Class R Margin for such Distribution Date.

      Class R Margin: As of any Distribution Date up to and including the
Auction Termination Date for the Certificates, 0.265% per annum and, as of any
Distribution Date after the Auction Termination Date, 0.530% per annum.

      Class R Pass-Through Rate: For the first Distribution Date, 1.55625% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Maximum Rate Cap and (3) the Available Funds
Cap for such Distribution Date.

      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.

                                       17
<PAGE>
      Clean Up Call Price: An amount equal to the sum of (a) the aggregate
Stated Principal Balance of each Mortgage Loan (other than any Mortgage Loan
that is an REO Property), plus accrued interest thereon at the applicable
Mortgage Rate through the Due Date preceding distribution of the proceeds, the
fair market value of any REO Property, plus accrued interest thereon, (b) any
unreimbursed out-of-pocket expenses owed to the Trustee (including the costs and
expenses of conducting the auction described in Section 9.01(a)) or the Servicer
and any unreimbursed Servicing Fees, Advances or Servicing Advances, (c) all
interest accrued on, as well as amounts necessary to retire the principal
balance of the notes guaranteed by the NIM Insurer, (d) any amounts owed to the
NIM Insurer at the time the Clean Up Call is exercised and (e) any costs and
damages incurred by the Trust Fund (or the Trustee on behalf of the Trust Fund)
in connection with any violation by the affected Mortgage Loan of any
anti-predatory or anti-abusive lending laws.

      Closing Date: June 24, 2004.

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

      Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Litton Loan
Servicing LP, in trust for registered holders of Specialty Underwriting and
Residential Finance Trust, Mortgage Loan Asset-Backed Certificates, Series
2004-BC2". 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.

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

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

      Current Interest: Any of the Class A-1 Current Interest, the Class A-2
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 Class B-1
Current Interest, the Class B-2 Current Interest, and the Class C Current
Interest.

      Cut-off Date: June 1, 2004.

      Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal

                                       18
<PAGE>
Prepayments received prior to the Cut-off Date, but without giving effect to any
installments of principal received in respect of Due Dates on and after the
Cut-off Date.

      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 its successor in

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

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

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

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

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

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

                                       19
<PAGE>
      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 July 2004.

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

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

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

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

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

      Event of Default: As defined in Section 7.01 hereof.

      Excess Interest: On any Distribution Date, for the Class A-1 Certificates,
Class A-2 Certificates, Class R Certificate, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class B-1 Certificates and Class B-2
Certificates, the excess, if any, of (1) the amount of interest such Class of
Certificates is entitled to receive on such Distribution Date at its
Pass-Through Rate over (2) the amount of interest such Class of Certificates
would have been entitled to receive on such Distribution Date had the
Pass-Through Rate for such Class been the REMIC Pass-Through Rate.

                                       20
<PAGE>
      Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to the Due Date in
the month in which such Liquidation Proceeds are required to be distributed on
the unpaid principal balance of such Liquidated Loan outstanding during each Due
Period as to which such interest was not paid or advanced.

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

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

      Extra Principal Distribution Amount: With respect to any Distribution
Date, (1) prior to the Stepdown Date, the excess of (A) the sum of (i) the
Aggregate Certificate Principal Balance immediately preceding such Distribution
Date reduced by the Principal Funds with respect to such Distribution Date and
(ii) $7,187,500 (or $10,925,000 in the event a Stepup Trigger Event is in
effect) over (B) the Pool Stated Principal Balance of the Mortgage Loans as of
such Distribution Date and (2) on and after the Stepdown Date, (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) 2.50% (or 3.80% in the event a
Stepup Trigger Event is in effect) of the Pool Stated Principal Balances 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 (i.e., if a Stepup Trigger Event is in effect at such
time, 3.80%, otherwise 2.50%) until the next Distribution Date on which the
Stepdown Trigger Event is not in effect. Notwithstanding the foregoing, the
Extra Principal Distribution amount will be zero for each Distribution Date up
to and including the Distribution Date in December 2004.

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

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

      FIFO: As defined in Section 10.14(e).

      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 Offered Certificates is
based upon the Available Funds Cap or the Maximum Rate Cap, the excess of (1)
the amount of interest that such Class would have been entitled to receive on
such Distribution Date had the Pass-Through Rate for that Class not been
calculated based on the Available Funds Cap or the Maximum Rate Cap, up to but
not exceeding greater of (x) the Maximum Rate Cap or (y) the Upper Collar, over
(2) the amount of interest such class was entitled to receive on such
Distribution Date based on the lesser of (a) the Available Funds Cap or (b) the
Maximum Rate Cap, together with (i) the unpaid portion of any such excess from
prior Distribution Dates (and interest accrued

                                       21
<PAGE>
thereon at the then applicable Pass-Through Rate, without giving effect to the
applicable Available Funds Cap) and (ii) any amount previously distributed with
respect to Floating Rate Certificate Carryover for such class that is recovered
as a voidable preference by a trustee in bankruptcy.

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

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

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

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

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

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

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

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

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

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

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

                                       22
<PAGE>
      Indenture: An indenture relating to the issuance of notes guaranteed by
the NIM Insurer.

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

      Initial Certificate Principal Balance: With respect to any Certificate
(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 the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing mortgage loans held for its own account, in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses.

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

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

      Interest Carryover Amount: Any of the Class A-1 Interest Carryover Amount,
the Class A-2 Interest Carryover Amount, the Class R Interest Carryover Amount,
the Class M-1 Interest Carryover Amount, the Class M-2 Interest Carryover
Amount, the Class M-3 Interest Carryover Amount, the Class B-1 Interest
Carryover Amount or the Class B-2 Interest Carryover Amount, as the case may be.

      Interest Determination Date: With respect to the 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 penalties 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.

                                       23
<PAGE>
      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.

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

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

      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 Interests: Each of the Class LTA-1 Interest, the Class
LTA-2 Interest, the Class LTM-1 Interest, the Class LTM-2 Interest, the Class
LTM-3 Interest, the Class LTB-1 Interest, the Class LTB-2 Interest, the Class
LTX Interest and the Class LTR Interest.

      Lower Tier REMIC Marker Classes: Each of the classes of Lower Tier REMIC
Regular Interests other than the Class LTX Interest.

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

      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: With respect to a Distribution Date, the per annum rate,
adjusted to reflect the length of the related Accrual Period, equal to the
weighted average of the maximum lifetime Net Mortgage Rates on the Adjustable
Rate Mortgage Loans and the Net Mortgage Rates on the Fixed Rate Mortgage Loans.

                                       24
<PAGE>
      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: The product of (x) 0.50%
and (y) the Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date.

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

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

      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.

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

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

      Mortgage Group: Either of Group One or Group Two.

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

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

      (i)     the loan number;

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

      (iii)   the Initial Mortgage Rate;

                                       25
<PAGE>
      (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;

      (xiii)  location of the related Mortgaged Property; and

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

      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.

                                       26
<PAGE>
      Net Rate: With respect to any Distribution Date, the product of (x) the
weighted average Net Mortgage Rate for the Mortgage Loans calculated based on
the Net Mortgage Rates and the Stated Principal Balances of the Mortgage Loans
as of the preceding Distribution Date, (or, in the case of the first
Distribution Date, as of the Cut-off Date) and (y) a fraction, the numerator
of which is 30 and the denominator of which is the actual number of days in
the related Accrual Period.

      Net WAC: With respect to any Distribution Date, the per annum rate equal
to 12 times the amount determined by dividing (i) the total scheduled interest
on the Mortgage Loans in the related Due Period based on the Net Mortgage
Rates in effect on the related Due Date by (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the immediately preceding Distribution
Date (or, in the case of the first Distribution Date, as of the Cut-off Date).

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

      NIM Insurer: Any of the one or more insurers that is guaranteeing
certain payments under any NIM Notes.

      NIM Insurer Default: A default by each of the NIM Insurers as such
default is defined in the 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-1, Class A-2, Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2 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 any other officer customarily performing functions
similar to those performed by any of the above designated officers and also to
whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with a particular subject) or (2),
if provided for in this Agreement, signed by a Servicing Officer, as the case
may be, and delivered to the Depositor, the Servicer or the Trustee, as the
case may be, as required by this Agreement.

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

                                      27
<PAGE>
Determination Date, One-Month LIBOR for the related Accrual Period will be
established by the Trustee as follows:

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

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

      Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Servicer, reasonably acceptable to each addressee of such
opinion; provided, however, that with respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC Provisions, such counsel must (1)
in fact be independent of the Depositor and the Servicer, (2) not have any
direct financial interest in the Depositor or the Servicer or in any affiliate
of 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).

      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 Margin: For any Class of Offered Certificates, the Class
A-1 Margin, the Class A-2 Margin, the Class M-1 Margin, the Class M-2 Margin,
the Class M-3 Margin, the Class B-1 Margin, the Class B-2 Margin and the Class
R Margin.

      Pass-Through Rate: With respect to the Class A-1 Certificates, the Class
A-1 Pass-Through Rate; with respect to the Class A-2 Certificates, the Class
A-2 Pass-Through Rate; with respect to the Class M-1 Certificates, the Class
M-1 Pass-Through Rate; with respect to the Class M-2 Certificates, the Class
M-2 Pass-Through Rate; with respect to the Class M-3 Certificates, the Class
M-3 Pass-Through Rate; with respect to the Class B-1 Certificates, the Class
B-1 Pass-Through Rate; with respect to the Class B-2

                                      28
<PAGE>
Certificates, the Class B-2 Pass-Through Rate; and, with respect to the Class
R Certificate, the Class R Pass-Through Rate.

      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 Class Certificate Principal Balance of such Class divided by
            the Class 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 trust created
pursuant to this Agreement which shall be:

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

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

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

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

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

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

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

      (iii) commercial or finance company paper, other than commercial or
            finance company paper issued by the Depositor, the Trustee or any
            of its Affiliates, which is then

                                      29
<PAGE>
            receiving the highest commercial or finance company paper rating
            of each such Rating Agency;

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

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

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

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

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

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

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

provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed
at a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, (I) that no amount beneficially owned by any REMIC
(including, without limitation,

                                      30
<PAGE>
any amounts collected by the Servicer but not yet deposited in the Collection
Account) may be invested in investments (other than money market funds)
treated as equity interests for Federal income tax purposes, unless the
Servicer and/or the Trustee, shall receive an Opinion of Counsel acceptable to
the Servicer and/or the Trustee, at the expense of the party requesting that
such investment be made, to the effect that such investment will not adversely
affect the status of the any REMIC provided for herein as a REMIC under the
Code or result in imposition of a tax on the Trust Fund or any REMIC provided
for herein and (II) any such investment must be a "permitted investment"
within the meaning of Section 860G(a)(5) of the Code. Permitted Investments
that are subject to prepayment or call may not be purchased at a price in
excess of par.

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

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

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

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

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

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

                                      31
<PAGE>
the case of a partial Principal Prepayment on the amount of such prepayment
exceeds (ii) the amount of interest paid or collected in connection with such
Principal Prepayment.

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

      Principal Distribution Amount: With respect to each Distribution Date,
the sum of (1) 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 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 Seller
in connection with a substitution of a Mortgage Loan pursuant to Section
2.03(c), (5) all Liquidation Proceeds collected during the related Prepayment
Period (to the extent such Liquidation Proceeds related to principal) and (6)
all other collections and recoveries in respect of principal during the
related Prepayment Period less (A) all Non-Recoverable Advances relating to
principal with respect to the Mortgage Loans and (B) other amounts
reimbursable to the Servicer and the Trustee pursuant to this Agreement and
allocable to principal. With respect to any Mortgage Group and any
Distribution Date, the sum, without duplication, of the items described in
clauses (1) through (6) of the preceding sentence with respect to Mortgage
Loans included in such Mortgage Group.

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

      Prospectus Supplement: The Prospectus Supplement dated June 22, 2004
relating to the public offering of the Class A-1, Class A-2, Class R, Class
M-1, Class M-2, Class M-3, Class B-1 and Class B-2 Certificates.

      PUD: A Planned Unit Development.

      Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller, pursuant to Section 2.02 or 2.03 hereof, or
purchased by the Servicer pursuant to Section 3.12(c) hereof, an amount equal
to the sum of (i) 100% of the unpaid principal balance of the Mortgage Loan as
of the date of such purchase together with any unreimbursed Servicing
Advances, (ii) accrued interest thereon at the applicable Mortgage Rate from
(a) the date through which interest was last paid by the Mortgagor to (b) the
Due Date in the month in which the Purchase Price is to be distributed to
Certificateholders and (iii) any costs and damages incurred by the Trust Fund
(or the Trustee on behalf of the Trust Fund) in connection with any violation
by the affected Mortgage Loan of any anti-predatory or anti-abusive lending
laws. With respect to any REO Property purchase by the Servicer pursuant to

                                      32
<PAGE>
Section 3.12(c) hereof, an amount equal to the fair market value of such REO
Property, as determined in good faith by the Servicer.

      Rating Agency: Either of 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.

      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.

      Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, 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 with the consent of the NIM Insurer which are engaged in transactions
in Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, England and (ii) whose quotations
appear on the Reuters Screen LIBO Page on the relevant Interest Determination
Date.

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

      Relief Act: The Servicemembers Civil Relief Act.

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

      REMIC Pass-Through Rate: The Pass-Through Rate for a Class of
Corresponding Certificates calculated by replacing "Available Funds Cap" in
such definition with "Net Rate."

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

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

                                      33
<PAGE>
      REO Property: A Mortgaged Property acquired by the Servicer, on behalf
of the Trustee for the benefit of the Certificateholders, through foreclosure
or deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.

      Remittance Report: The meaning specified in Section 4.04(k) hereof.

      Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of
the Scheduled Payment due in the month of substitution, not in excess of, and
not less than 90% of the Stated Principal Balance of the Deleted Mortgage
Loan; (2) with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate
not less than or no more than 1% per annum higher than the Mortgage Rate of
the Deleted Mortgage Loan and, with respect to any Adjustable Rate Mortgage
Loan: (A) have a Maximum Mortgage Rate no more than 1% per annum higher or
lower than the Maximum Mortgage Rate of the Deleted Mortgage Loan; (B) have a
Minimum Mortgage Rate no more than 1% per annum higher or lower than the
Minimum Mortgage Rate of the Deleted Mortgage Loan; (C) have the same index
and Periodic Rate Cap as that of the Deleted Mortgage Loan and a Gross Margin
not more than 1% per annum higher or lower than that of the Deleted Mortgage
Loan; (D) not permit conversion of the related Mortgage Rate to a fixed
Mortgage Rate and (F) currently be accruing interest at a rate not more than
1% per annum higher or lower than that of the Deleted Mortgage Loan; (3) have
a similar or higher FICO score or credit grade than that of the Deleted
Mortgage Loan; (4) have a Loan-to-Value Ratio (or Combined Loan-to-Value
Ratio, in the case of the Mortgage Loans in a second lien position) no higher
than that of the Deleted Mortgage Loan; (5) have a remaining term to maturity
no greater than (and not more than one year less than) that of the Deleted
Mortgage Loan; (6) provide for a prepayment charge on terms substantially
similar to those of the prepayment charge, if any, of the Deleted Mortgage
Loan; (7) have the same lien priority as the Deleted Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan; 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: Means on 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 Distribution Date and (2) the aggregate
Stated Principal Balance of the Mortgage Loans as of such Distribution Date.

      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.

                                      34
<PAGE>
      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 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 June 1, 2004 between the Depositor and the Seller.

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

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

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

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

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

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

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

      Servicer Trigger Event: As defined in Section 7.02 hereof.

      Servicer's Assignee: As defined in Section 10.14(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 real estate taxes and
assessments, (2) any collection, enforcement or judicial proceedings,
including without limitation foreclosures, collections and liquidations, (3)
the conservation, management, sale and liquidation of any REO Property and (4)
compliance with the obligations under Section 3.10.

                                      35
<PAGE>
      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, including Wachovia Bank, N.A., as
the representative of certain lenders.

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

      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.

      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 later to occur of (1) the Distribution Date in July
2007 or (2) the first Distribution Date on which (A) the Class A Certificate
Principal Balance (reduced by the Principal Funds with respect to such
Distribution Date) is less than or equal to (B) 61.60% (or 60.30% in the event
a

                                      36
<PAGE>
Stepup Trigger Event is in effect) of the aggregate Stated Principal Balance
of the Mortgage Loans as of such Distribution Date.

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

DISTRIBUTION DATE OCCURRING IN       STEPDOWN REQUIRED LOSS PERCENTAGE
July 2007 - June 2008                3.25% with respect to July 2007, plus an
                                     additional 1/12th of 1.75% for each month
                                     thereafter

July 2008 - June 2009                5.00% with respect to July 2008, plus an
                                     additional 1/12th of 1.25% for each month
                                     thereafter

July 2009 - June 2010                6.25% with respect to July 2009, plus an
                                     additional 1/12th of 0.50% for each month
                                     thereafter

July 2010 and thereafter             6.75%

      Stepdown Trigger Event: With respect to the Certificates after the
Stepdown Date, a Distribution Date on which (1) the quotient of (A) the
aggregate Stated Principal Balance of all Mortgage Loans which are 60 or more
days Delinquent measured on a rolling three month basis (including, for the
purposes of this calculation, Mortgage Loans in foreclosure, 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)
44.50% 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 Required Loss Percentage.

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

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<PAGE>
DISTRIBUTION DATE OCCURRING IN     STEPUP REQUIRED LOSS PERCENTAGE
July 2005 - June 2006              1.35% with respect to July 2005, plus an
                                   additional 1/12th of 1.15% for each month
                                   thereafter

July 2006 - June 2007              2.50% with respect to July 2006, plus an
                                   additional 1/12 of 1.75% for each month
                                   thereafter

July 2007 - June 2008              4.25% with respect to July 2007, plus an
                                   additional 1/12 of 1.50% for each month
                                   thereafter

July 2008 - June 2009              5.75% with respect to July 2008 plus an
                                   additional 1/12 of 1.75% for each month
                                   thereafter

July 2009 - June 2010              7.50% with respect to July 2009 plus an
                                   additional 1/12th of 0.75% for each month
                                   thereafter

July 2010 and thereafter           8.25

      Stepup Trigger Event: A Distribution Date on which the aggregate
Realized Losses incurred from the Cut-off Date through the last day of the
calendar month preceding such Distribution Date as a percentage of the
aggregate Principal Balance of the Mortgage Loans equals or exceeds the
applicable Stepup Required Loss Percentage.

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

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

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

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

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

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

      Trust Fund: The corpus of the trust (the "Specialty Underwriting and
Residential Finance Trust, Series 2004-BC2") 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

                                      38
<PAGE>
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; (v) all proceeds of the conversion, voluntary or involuntary, of any of
the foregoing into cash or other liquid property; and (vi) the Cap Contract
and Cap Contract Account.

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

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

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

      Upper Collar: With respect to each Distribution Date with respect to
which payments are received on the Cap Contract, a rate equal to the lesser of
One-Month LIBOR and 8.985% per annum.

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

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

      Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 95% to the Offered Certificates, 5% 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).

                                      39
<PAGE>
      In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee the following documents or instruments with
respect to each Mortgage Loan so assigned:

      (A) The Original Mortgage Note, together with all riders thereto,
endorsed, "Pay to the order of JPMorgan Chase Bank, as trustee - SURF
2004-BC2, without recourse" together with all riders thereto. The Mortgage
Note shall include all intervening endorsements showing a complete chain of
the title from the originator to the Seller.

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

      (C) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage, to "JPMorgan Chase Bank, as trustee -
SURF-BC2."

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

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

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

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

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

                                      40
<PAGE>
      The ownership of each Mortgage Note, the Mortgage and the contents of
the related Mortgage File is vested in the Trustee. Neither the Depositor nor
the Servicer shall take any action inconsistent with such ownership and shall
not claim any ownership interest therein. The Depositor and the Servicer shall
respond to any third party inquiries with respect to ownership of the Mortgage
Loans by stating that such ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage documents relating to the Mortgage Loans not
delivered to the Trustee are and shall be held in trust by the Servicer, for
the benefit of the Trustee as the owner thereof, and the Servicer's possession
of the contents of each Mortgage File so retained is for the sole purpose of
servicing the related Mortgage Loan, and such retention and possession by the
Servicer is in a custodial capacity only. The Depositor agrees to take no
action inconsistent with the Trustee's ownership of the Mortgage Loans, to
promptly indicate to all inquiring parties that the Mortgage Loans have been
sold and to claim no ownership interest in the Mortgage Loans.

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

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

      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

                                      41
<PAGE>
trust for the use and benefit of all present and future Certificateholders.
The Depositor will cause the Seller to repurchase any Mortgage Loan to which a
material exception was taken in the Exception Report unless such exception is
cured to the satisfaction of the Trustee within 45 Business Days of the
Closing Date.

      The Trustee acknowledges receipt of the Cap Contract (a form of which is
attached hereto as Exhibit O), Transfer Agreement and the Sale Agreement.

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

                                      42
<PAGE>
      Within 70 days of the Closing Date, the Trustee shall deliver to the
Depositor, the Servicer and the NIM Insurer the Trustee's Certification,
substantially in the form of Exhibit D attached hereto, evidencing the
completeness of the Mortgage Files, with any exceptions noted thereto.

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

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

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

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

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

                                      43
<PAGE>
      to the Trustee with respect to each Mortgage Loan as of the Closing
      Date, and following the transfer of the Mortgage Loans to it by the
      Seller, the Depositor had good title to the Mortgage Loans and the
      Mortgage Notes were subject to no offsets, claims, liens, mortgage,
      pledge, charge, security interest, defenses or counterclaims.

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

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

                                      44
<PAGE>
      With respect to any Mortgage Loan repurchased by the Depositor pursuant
to this Agreement or by the Seller pursuant to the Sale Agreement, the
principal portion of the funds received by the Servicer in respect of such
repurchase of a Mortgage Loan will be considered a Principal Prepayment and
shall be deposited by the Servicer in the Certificate Account pursuant to
Section 3.05. The Trustee, upon receipt of the full amount of the Purchase
Price for a Deleted Mortgage Loan, or upon receipt of the Mortgage File for a
Replacement Mortgage Loan substituted for a Deleted Mortgage Loan, shall
release or cause to be released and reassign to the Depositor or the Seller,
as applicable, the related Mortgage File for the Deleted Mortgage Loan and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as shall be necessary to
vest in such party or its designee or assignee title to any Deleted Mortgage
Loan released pursuant hereto, free and clear of all security interests, liens
and other encumbrances created by this Agreement, which instruments shall be
prepared by the Trustee, and the Trustee shall not have any further
responsibility with respect to the Mortgage File relating to such Deleted
Mortgage Loan.

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

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

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

      In addition, the Seller shall obtain at its own expense and deliver to
the Trustee and the NIM Insurer an Opinion of Counsel addressed to the Trustee
and the NIM Insurer to the effect that such substitution will not (a) cause
any federal tax to be imposed on the Trust Fund or any REMIC provided for
herein, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup day" under Section 860G(d)(1) of

                                      45
<PAGE>
the Code or (b) adversely affect the status of any REMIC provided for herein
as a REMIC. If any such Opinion of Counsel can not be delivered, then such
substitution may only be effected at such time as the required Opinion of
Counsel can be given.

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

      SECTION 2.04. Representations and Warranties of the Servicer.

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

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

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

            (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.

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

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

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

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

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

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

      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 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

                                      47
<PAGE>
signed by the Trustee under applicable law. This Agreement shall be construed
so as to carry out the intention of the parties that each of the Lower Tier
REMIC and the Upper Tier REMIC be treated as a REMIC at all times prior to the
date on which the Trust Fund is terminated.

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

      The Lower Tier REMIC shall consist of all of the assets of the Trust
Fund (other than (i) any proceeds of Prepayment Penalties, (ii) amounts paid
by the Servicer or the Seller in respect of prepayment charges of waivers
thereof pursuant to this Agreement, (iii) 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,
(iv) the interests issued by the Lower Tier REMIC, (v) the grantor trusts
described in this Section 2.07 and (vi) the Cap Contract and Cap Contract
Account). The Lower Tier REMIC shall issue the Lower Tier REMIC Regular
Interests which shall be designated as regular interests of such REMIC and
shall issue the Class LTR Interest that shall be designated as the sole class
of residual interest in the Lower Tier REMIC. Each of the Lower Tier REMIC
Regular Interests shall have the characteristics set forth in its definition.

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

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

      (c) The "tax matters person" with respect to each REMIC for purposes of
the REMIC Provisions shall be the beneficial owner of the Class R Certificate;
provided, however, that the Holder of a 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) It is intended that the rights of the Class A-1 Certificates, Class
A-2 Certificates, Class R Certificate, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class B-1 Certificates and Class B-2
Certificates to receive payments 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-1 Certificates, Class A-2 Certificates,
Class R Certificate, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class B-1 Certificates and Class B-2 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-1
Certificates, Class A-2 Certificates, M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates Class B-1 Certificates and Class B-2
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

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<PAGE>
regulation. On each Distribution Date, to the extent that any of the Class A-1
Certificates, Class A-2 Certificates, Class R Certificate, M-1 Certificates,
Class M-2 Certificates, Class M-3 Certificates, Class B-1 Certificates or
Class B-2 Certificates receive payments in respect of Excess 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 relevant Class of Certificates pursuant to the related
interest cap agreement.

      (e) The parties intend that the portion of the Trust Fund consisting of
the Uncertificated Class C Interest, the Cap Contract Account, the Cap
Contract 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-1
Certificates, Class A-2 Certificates, Class R Certificate, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class B-1
Certificates and Class B-2 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-1 Certificates, Class A-2 Certificates, Class R Certificate, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class B-1
Certificates, Class B-2 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 proceeds from prepayment penalties collected on the
Mortgage Loans, amounts paid by the Servicer or Seller in respect of
prepayment charges pursuant to this Agreement and amounts received with
respect to any amounts 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 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 the portion of the Trust Fund consisting of
the Class R Certificate and the right of the Class C Certificates to receive
the amounts described in Section 9.01(f) hereof shall be treated as a "grantor
trust" under the Code, for the benefit of the holders of the Class R
Certificates and the Class C Certificates, and the provisions hereof shall be
interpreted consistent with this intention. In furtherance of this intention,
the Trustee shall (i) furnish or cause to be furnished to the holders of the
Class R Certificate and the Class C Certificates information regarding their
allocable share 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 as may be applicable under the Code.

      All payments of principal and interest at the Net Mortgage Rate on each
of the Mortgage Loans (other than prepayment penalties, amounts paid by the
Servicer or the Seller in respect of prepayment penalties pursuant to this
Agreement, as applicable, and amounts received with respect to any amounts in
respect of any indemnification paid as a result of a prepayment penalty being
unenforceable in breach of the representations and warranties set forth in the
Sale Agreement) received from the Mortgage Loans shall be paid to the Lower
Tier REMIC Regular Interests until the principal balance of all such interests

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<PAGE>
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, an amount equal to 50% of the increase in the
Overcollateralization Amount shall be payable as a reduction of the principal
amounts of the Lower Tier REMIC Marker Classes (with such amount allocated
among the Lower Tier REMIC Marker Classes so that each Lower Tier REMIC Marker
Class will have its principal reduced by an amount equal to 50% of any
increase in the Overcollateralization Amount that results in a reduction in
the principal balance of its Corresponding Certificates) and will be accrued
and added to the principal balance of the Class LTX Interest. All payments of
scheduled principal and prepayments of principal on the Mortgage Loans shall
be allocated 50% to the Class LTX Interest and 50% to the Lower Tier REMIC
Marker Classes (with principal payments allocated to each of the Lower Tier
REMIC Marker Classes in an amount equal to 50% of the principal amounts
distributed to the Corresponding Certificates in reduction of their principal
amounts). Notwithstanding the preceding sentence, an amount equal to the
principal payments that result in a reduction in the Overcollateralization
Amount shall be treated as payable entirely to the Class LTX Interest.
Realized Losses that are allocated to the Certificates shall be applied to the
Lower Tier REMIC Marker Classes and the Class LTX Interest so that after all
distributions have been made on each Distribution Date (i) the principal
balance of each of the Lower Tier REMIC Marker Classes is equal to 50% of the
principal balance of the Corresponding Certificates and (ii) the principal
balance of the Class LTX Interest is equal to the sum of (x) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans and (y) 50% of the
Overcollateralization Amount. Each Lower Tier REMIC Marker Class shall be
entitled to receive an amount equal to 50% of all amounts distributed to the
Corresponding Certificates in respect of unreimbursed amounts of Realized
Losses. The Class LTX Interest shall be entitled to receive all other amounts
distributed to the Certificates in respect of unreimbursed amounts of Realized
Losses. 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 (i)
each of the Lower Tier Marker Classes has a principal balance equal to 50% of
the principal balance of the Corresponding Certificates and (ii) the Class LTX
Interest has a principal balance equal to the sum of (x) 50% of the aggregate
Stated Principal Balance of the Mortgage Loans and (y) 50% of the
Overcollateralization Amount.

      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 NIM
Insurer, the Trustee and the Trust Fund against any and all Losses resulting
from such negligence; provided, however, that the Servicer shall not be liable
for any such Losses attributable to the action or inaction of the Trustee, the
Depositor or the Holder of the 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 arising out of a negligent
performance by the Servicer of its duties and obligations set forth herein,
and (3) for any special or consequential damages to Certificateholders (in
addition to payment of principal and interest on the Certificates).

      In the event that any REMIC provided for herein fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as
a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Trustee of its duties

                                      50
<PAGE>
and obligations set forth herein, the Trustee shall indemnify the NIM Insurer
and the Trust Fund against any and all Losses resulting from such negligence;
provided, however, that the Trustee shall not be liable for any such Losses
attributable to the action or inaction of the Servicer, the Depositor 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 arising out of a negligent
performance by the Trustee of its duties and obligations set forth herein, and
(3) for any special or consequential damages to Certificateholders (in
addition to payment of principal and interest on the Certificates).

      SECTION 2.08. Covenants of the Servicer.

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

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

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

      SECTION 2.09. [RESERVED].

      SECTION 2.10. [RESERVED].

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

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

                                  ARTICLE III
                ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

      SECTION 3.01. Servicer to Service Mortgage Loans.

      For and on behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans in accordance with Accepted Servicing
Practices. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through subservicers

                                      51
<PAGE>
as provided in Section 3.02 hereof, to do or cause to be done any and all
things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf
of the Certificateholders and the Trustee, customary consents or waivers and
other instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and (iv) subject to Section 3.12(a),
to effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan; provided that, subject to
Section 6.03, the Servicer shall not take any action that is inconsistent with
or prejudices the interests of the Trust Fund or the Certificateholders in any
Mortgage Loan serviced by it under this Agreement or the rights and interests
of the other parties to this Agreement except as otherwise required by this
Agreement or by law. The Servicer shall represent and protect the interest of
the Trust Fund in the same manner as it currently protects its own interest in
mortgage loans in its own portfolio in any claim, proceeding or litigation
regarding a Mortgage Loan, but in any case not in any manner that is a lesser
standard than that provided in the first sentence of this Section 3.01. The
Servicer shall not make or permit any modification, waiver or amendment of any
term of any Mortgage Loan which would cause any of the REMICs provided for
herein to fail to qualify as a REMIC or result in the imposition of any tax
under Section 860G(a) or 860G(d) of the Code. Without limiting the generality
of the foregoing, the Servicer, in its own name or in the name of the
Depositor and the Trustee, is hereby authorized and empowered by the Depositor
and the Trustee, when the Servicer believes it appropriate in its reasonable
judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans, and with respect
to the Mortgaged Properties held for the benefit of the Certificateholders.
The Servicer shall prepare and deliver to the Depositor and/or the Trustee
such documents requiring execution and delivery by any or all of them as are
necessary or appropriate to enable the Servicer to service and administer the
Mortgage Loans. If reasonably required by the Servicer, the Trustee shall
furnish the Servicer with a power of attorney in the form attached hereto as
Exhibit J and execute such other documents delivered to it by the Servicer
that are necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Servicer. The Trustee shall have no liability with respect
to any misuse of such power of attorney and shall be indemnified by the
Servicer for any costs, liabilities or expenses incurred by the Trustee in
connection therewith.

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

                                      52
<PAGE>
      The Servicer shall deliver a list of Servicing Officers to the Trustee
by the Closing Date.

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

      The Servicer shall have at least 30 days' notice of the appointment of a
NIM Insurer prior to being required to deliver any notices pursuant to this
Agreement to such NIM Insurer.

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

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

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

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

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

      SECTION 3.04. Trustee to Act as Servicer.

      In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee
or its designee shall, within a period of time not to exceed ninety (90) days
from the date of notice of termination or resignation, thereupon assume all of
the rights and obligations of the Servicer hereunder arising thereafter except
that the Trustee shall not be (i) liable

                                      53
<PAGE>
for losses of the Servicer pursuant to Section 3.10 hereof or any acts or
omissions of such predecessor Servicer hereunder, (ii) obligated to make
Advances or Servicing Advances if it is prohibited from doing so by applicable
law, (iii) obligated to effectuate repurchases or substitutions of Mortgage
Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof, (iv)
responsible for any expenses of the Servicer pursuant to Section 2.03 or (v)
deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.04 or the first paragraph of Section 6.02 hereof;
provided, however that the Trustee (subject to clause (ii) above) or its
designee, in its capacity as the successor servicer, shall immediately assume
the terminated or resigning Servicer's obligation to make Advances and
Servicing Advances. No such termination shall affect any obligation of the
Servicer to pay amounts owed under this Agreement and to perform its duties
under this Agreement until its successor assumes all of its rights and
obligations hereunder. If the Servicer shall for any reason no longer be the
Servicer (including by reason of any Event of Default), the Trustee (or any
other successor servicer) may, at its option, succeed to any rights and
obligations of the Servicer under any subservicing agreement in accordance
with the terms thereof; provided, however, that the Trustee (or any other
successor servicer) shall not incur any liability or have any obligations in
its capacity as servicer under a subservicing agreement arising prior to the
date of such succession unless it expressly elects to assume such obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession. To the extent any costs or expenses, including
without limitation Servicing Transfer Costs incurred by the Trustee in
connection with this Section 3.04 are not paid by the Servicer pursuant to
this Agreement within 30 days of the date of the Trustee's invoice therefor,
such amounts shall be payable out of the Certificate Account; provided that
the terminated Servicer shall reimburse the Trust Fund for any such expense
incurred by the Trust Fund upon receipt of a reasonably detailed invoice
evidencing such expenses. If the Trustee is unwilling or unable to act as
servicer, or if the NIM Insurer so directs the Trustee, the Trustee shall seek
to appoint a successor servicer that is eligible in accordance with the
criteria specified this Agreement and reasonably acceptable to the NIM
Insurer.

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

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

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

      (a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the
terms and provisions of the Mortgage Loans to the extent such procedures shall
be consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing and subject to
Section 3.01 hereof, the Servicer may in its discretion (i) waive any late
payment charge or, if applicable, any penalty interest, or (ii) extend the due
dates for payments due on a Mortgage Note for a period not greater than 180
days; provided, however, that any extension pursuant to clause (ii) above
shall not affect the amortization

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schedule of any Mortgage Loan for purposes of any computation hereunder,
except as provided below; provided, further, that the NIM Insurer's prior
written consent shall be required for any modification, waiver or amendment
since the Cutoff Date if the aggregate number of outstanding Mortgage Loans
which have been modified, waived or amended exceeds 5% of the number of
Mortgage Loans as of the Cut-Off Date. In the event of any such arrangement
pursuant to clause (ii) above, subject to Section 4.01, the Servicer shall
make any Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the
judgment of the Servicer, such default is reasonably foreseeable, the
Servicer, consistent with the standards set forth in Section 3.01, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest or extend the final maturity date of such Mortgage Loan), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications,
variances, forgiveness of principal or interest, postponements, or indulgences
collectively referred to herein as "forbearance"), provided, however, that in
no event shall the Servicer grant any such forbearance (other than as
permitted by the second sentence of this Section) with respect to any one
Mortgage Loan more than once in any 12 month period or more than three times
over the life of such Mortgage Loan, and provided, further, that in
determining which course of action permitted by this sentence it shall pursue,
the Servicer shall adhere to the standards of Section 3.01. The Servicer's
analysis supporting any forbearance and the conclusion that any forbearance
meets the standards of Section 3.01 shall be reflected in writing in the
Mortgage File.

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

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

      (d) The Servicer shall establish and initially maintain, on behalf of
the Trustee for the benefit of the Certificateholders, the Collection Account.
The Servicer shall deposit into the Collection Account

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daily, within two Business Days of receipt thereof, in immediately available
funds, the following payments and collections received or made by it on and
after the Cut-Off Date with respect to the Mortgage Loans:

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

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

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

            (iv) all Compensating Interest;

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

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

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

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

            (ix) all prepayment penalties; and

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

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

      The Servicer shall give notice to the NIM Insurer and the Trustee of the
location of the Collection Account maintained by it when established and prior
to any change thereof. The Servicer shall have at least 30 days' notice of the
appointment of a NIM Insurer prior to being required to deliver notices to
such NIM Insurer. Not later than twenty days after each Distribution Date, the
Servicer shall forward to the NIM Insurer and, upon request, to the Trustee
and the Depositor the most current available bank statement for the Collection
Account. Copies of such statement shall be provided by the Trustee to any

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Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Trustee.

      (e) [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 3:00 p.m. New York City
time (or such earlier deadline for investment in the Permitted Investments
designated by the Trustee) which are required to be deposited in the
Certificate Account by the Servicer shall be invested in Permitted Investments
on the Business Day on which they were received. The foregoing requirements
for remittance by the Servicer and deposit by the Servicer into the
Certificate Account shall be exclusive. In the event that the Servicer shall
remit any amount not required to be remitted and not otherwise subject to
withdrawal pursuant to Section 3.08 hereof, it may at any time withdraw such
amount from the Certificate Account, any provision herein to the contrary
notwithstanding. All funds deposited in the Certificate Account shall be held
by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08.
In no event shall the Trustee incur liability for withdrawals from the
Certificate Account at the direction of the Servicer. The Trustee shall give
notice to the NIM Insurer and the Servicer of the location of the Certificate
Account maintained by it when established and prior to any change thereof.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            (vi) pay the Servicer any unpaid Servicing Fees and to reimburse
      it for any unreimbursed Servicing Advances, the Servicer's right to
      reimbursement of Servicing Advances pursuant to this subclause (vi) with
      respect to any Mortgage Loan being limited to amounts received on
      particular Mortgage Loan(s) (including, for this purpose, Liquidation
      Proceeds and purchase and repurchase proceeds) that represent late
      recoveries of the payments for which such advances were made pursuant to
      Section 3.01 or Section 3.06;

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

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

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

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

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

            (xii) 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 (xii) shall be deposited in the
      Collection Account by the Servicer on the next succeeding Distribution
      Date that funds are to be distributed to Certificateholders.

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

      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 and the
NIM Insurer on or prior to the next succeeding Servicer Remittance Date upon
making any withdrawals from the Collection Account pursuant to subclauses
(iii) and (viii) above.

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

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

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

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

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

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

      SECTION 3.09. [RESERVED].

      SECTION 3.10. Maintenance of Hazard Insurance.

      The Servicer shall cause to be maintained, for each Mortgage Loan,
hazard insurance with extended coverage in an amount that is at least equal to
the lesser of (i) the replacement value of the improvements that are part of
such Mortgaged Property, or (ii) the greater of (a) the outstanding principal
balance of the Mortgage Loan and (b) an amount such that the proceeds of such
policy shall be sufficient to prevent the related Mortgagor and/or mortgagee
from becoming a co-insurer or (iii) the amount required under applicable
HUD/FHA regulations. Each such policy of standard hazard insurance shall
contain, or have an accompanying endorsement that contains, a standard
mortgagee clause. The Servicer

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

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

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

      (a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy; provided,
however, that the Servicer shall not exercise any such right if the
due-on-sale clause, in the reasonable belief of the Servicer, is not
enforceable under applicable law. An opinion of counsel, which shall be
reimbursable as a Servicing Advance, delivered to the Trustee and the
Depositor to the foregoing shall conclusively establish the reasonableness of
such belief to the extent permitted under applicable law. Notwithstanding the
foregoing, the Servicer is not required to exercise such rights with respect
to a Mortgage Loan if the Person to whom the related Mortgaged Property has
been conveyed or is proposed to be conveyed satisfies the terms and conditions
contained in the Mortgage Note and Mortgage related thereto and the consent of
the mortgagee under such Mortgage Note or Mortgage is not otherwise so
required under such Mortgage Note or Mortgage as a condition to such transfer.
In the event that the Servicer is prohibited by law from enforcing any such
due-on-sale clause, or if coverage under any Required Insurance Policy would
be adversely affected, or if

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<PAGE>
nonenforcement is otherwise permitted hereunder, the Servicer is authorized,
subject to Section 3.11(b), to take or enter into an assumption and
modification agreement from or with the Person to whom such property has been
or is about to be conveyed, pursuant to which such Person becomes liable under
the Mortgage Note and, unless prohibited by applicable state law, the
Mortgagor remains liable thereon, provided that the Mortgage Loan shall
continue to be covered (if so covered before the Servicer enters such
agreement) by the applicable Required Insurance Policies. The Servicer,
subject to Section 3.11(b), is also authorized with the prior approval of the
insurers under any Required Insurance Policies to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the Mortgage Note. Notwithstanding the foregoing, the
Servicer shall not be deemed to be in default under this Section 3.11(a) by
reason of any transfer or assumption that the Servicer reasonably believes it
is restricted by law from preventing.

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

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proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the proceeds of liquidation of the related Mortgaged Property, as
contemplated in Section 3.08 hereof. If the Servicer has knowledge that a
Mortgaged Property that the Servicer is contemplating acquiring in foreclosure
or by deed-in-lieu of foreclosure is located within a one-mile radius of any
site with environmental or hazardous waste risks known to the Servicer, the
Servicer will, prior to acquiring the Mortgaged Property, consider such risks
and only take action in accordance with Accepted Servicing Practices.

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

      In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
the expiration of three years from the end of the year of its acquisition by
the Trust Fund or, at the expense of the Trust Fund, request more than 60 days
prior to the day on which such three-year period would otherwise expire, an
extension of the three-year grace period unless the Trustee and the NIM
Insurer shall have been supplied with an Opinion of Counsel addressed to the
Trustee and the NIM Insurer (such Opinion of Counsel not to be an expense of
the Trustee or the NIM Insurer) to the effect that the holding by the Trust
Fund of such Mortgaged Property subsequent to such three-year period will not
result in the imposition of taxes on "prohibited transactions" of the Trust
Fund or any of the REMICs provided for herein as defined in section 860F of
the Code or cause any of the REMICs provided for herein to fail to qualify as
a REMIC at any time that any Certificates are outstanding, in which case the
Trust Fund may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel). Notwithstanding any other
provision of this Agreement, no Mortgaged Property acquired by the Trust Fund
shall be rented (or allowed to continue to be rented) or otherwise used for
the production of income by or on behalf of the Trust Fund in such a manner or
pursuant to any terms that would (i) cause such Mortgaged Property to fail to
qualify as "foreclosure property" within the meaning of section 860G(a)(8) of
the Code or (ii) subject the Trust Fund or any REMIC provided for herein to
the imposition of any federal, state or local income taxes on the income
earned from such Mortgaged Property under section 860G(c) of the Code or
otherwise, unless the Servicer or the Depositor has agreed to indemnify and
hold harmless the Trust Fund with respect to the imposition of any such taxes.

      The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties

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

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

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

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

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

      In the event that the Servicer is acting as the servicer and the
Servicer (or an affiliate of the Servicer) is the owner of more than 50% of
the Class of Certificates which is then currently in a first loss position and
such party is deemed to be the "Primary Beneficiary" as defined in FIN 40, the
provisions of the preceding paragraph shall not apply and the Servicer (or an
affiliate of the Servicer), in its sole discretion, shall have the right to
elect to purchase for its own account from the Trust Fund any Mortgage Loan
that is 120 days or more Delinquent or REO Property for which the Servicer has
accepted a deed-in-

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

      (d) The Servicer may write-off any second lien Mortgage Loan that has
been Delinquent for a period of 180 days or more, provided that 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.

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

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

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

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

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

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

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      SECTION 3.15. Servicing Compensation.

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

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

      SECTION 3.16. Access to Certain Documentation.

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

      SECTION 3.17. Annual Statement as to Compliance.

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

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

      On or before March 15 of each year, beginning in 2005 or such other date
in order to remain in compliance with the Section 302 Requirements, the
Servicer at its expense shall cause a nationally

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recognized firm of independent public accountants (who may also render other
services to the Servicer or any Affiliate thereof) that is a member of the
American Institute of Certified Public Accountants to furnish a USAP Report to
the Trustee, the NIM Insurer and the Depositor. Copies of the USAP Report
shall be provided by the Trustee to any Certificateholder upon request at the
Certificateholder's expense, provided such report has been delivered by the
Servicer to the Trustee. In addition, at the NIM Insurer's written request,
the Servicer shall deliver copies of evidence of the Servicer's fidelity bond
or errors and omissions insurance coverage to the NIM Insurer.

      SECTION 3.19. Rights of the NIM Insurer. Each of the rights of the NIM
Insurer set forth in this agreement shall exist so long as the notes issued
pursuant to the Indenture remain outstanding or the NIM Insurer is owed
amounts in respect of its guarantee of payment on such notes.

      SECTION 3.20. Periodic Filings.

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

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

      (c) [RESERVED].

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

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

      SECTION 3.21. Annual Certificate by Trustee.

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

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

      SECTION 3.22. Annual Certificate by Servicer.

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

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

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

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

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

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

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

      SECTION 3.23. Prepayment Penalty Reporting Requirements.

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

            (i)   loan number;

            (ii)  current Mortgage Rate;

            (iii) current principal balance;

            (iv)  original principal balance;

            (v)   prepayment penalty amount due;

            (vi)  prepayment penalty amount collected; and

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

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

      SECTION 3.25. Indemnification.

      The Servicer shall indemnify the Seller, the Trust Fund, Trustee, the
Depositor and the NIM Insurer 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

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

      SECTION 3.26. Nonsolicitation.

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

      SECTION 3.27. Existing Servicing Agreement.

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

                                  ARTICLE IV
                                 DISTRIBUTIONS

      SECTION 4.01. Advances.

      Subject to the conditions of this Article IV, the Servicer, as required
below, shall make an Advance and deposit such Advance in the Collection
Account. Each such Advance shall be remitted to the Collection Account no
later than 1:00 p.m. New York City time on the Servicer Advance Date in
immediately available funds. The Servicer shall be obligated to make any such
Advance only to the extent that such advance would not be a Non-Recoverable
Advance. If the Servicer shall have determined that it has made a
Non-Recoverable Advance or that a proposed Advance or a lesser portion of such
Advance would constitute a Non-Recoverable Advance, the Servicer shall deliver
(i) to the Trustee for the benefit of the Certificateholders funds
constituting the remaining portion of such Advance, if applicable, and (ii) to
the Depositor, the NIM Insurer, each Rating Agency and the Trustee an
Officer's Certificate setting forth the basis for such determination. The
Servicer may, in its sole discretion, make an Advance with respect to the
principal portion of the final Scheduled Payment on a Balloon Loan, but the
Servicer is under no obligation to do so; provided, however, that nothing in
this sentence shall affect the Servicer's obligation under this Section 4.01
to Advance the interest portion of the final Scheduled Payment with respect to
a Balloon Loan as if such Balloon Loan were a fully amortizing Mortgage Loan.
If a Mortgagor does not pay its final Scheduled Payment on a Balloon Loan when
due, the Servicer shall

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Advance (unless it determines in its good faith judgment that such amounts
would constitute a Non Recoverable Advance) a full month of interest (net of
the Servicing Fee) on the Stated Principal Balance thereof each month until
its Stated Principal Balance is reduced to zero.

      In lieu of making all or a portion of such Advance from its own funds,
the Servicer may (i) cause to be made an appropriate entry in its records
relating to the Collection Account that any amount held for future
distribution has been used by the Servicer in discharge of its obligation to
make any such Advance and (ii) transfer such funds from the Collection Account
to the Certificate Account. In addition, the Servicer shall have the right to
reimburse itself for any such Advance from amounts held from time to time in
the Collection Account to the extent such amounts are not then required to be
distributed. Any funds so applied and transferred pursuant to the previous two
sentences shall be replaced by the Servicer by deposit in the Collection
Account no later than the close of business on the Servicer Advance Date on
which such funds are required to be distributed pursuant to this Agreement.
The Servicer shall be entitled to be reimbursed from the Collection Account
for all Advances of its own funds made pursuant to this Section as provided in
Section 3.08. The obligation to make Advances with respect to any Mortgage
Loan shall continue until such Mortgage Loan is paid in full or the related
Mortgaged Property or related REO Property has been liquidated or until the
purchase or repurchase thereof (or substitution therefor) from the Trust Fund
pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section 4.01.

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

      In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Servicer shall, from amounts in respect of the
Servicing Fee for such Distribution Date, deposit into the Collection Account,
as a reduction of the Servicing Fee for such Distribution Date, no later than
the Servicer Advance Date immediately preceding such Distribution Date, an
amount up to the Prepayment Interest Shortfall; provided that the amount so
deposited with respect to any Distribution Date shall be limited to the
product of (x) one-twelfth of 0.30% and (y) the aggregate Stated Principal
Balance of the Mortgage Loans. In case of such deposit, the Servicer shall not
be entitled to any recovery or reimbursement from the Depositor, the Trustee,
the Trust Fund or the Certificateholders. With respect to any Distribution
Date, to the extent that the Prepayment Interest Shortfall exceeds
Compensating Interest (such excess, a "Non-Supported Interest Shortfall"),
such Non-Supported Interest Shortfall shall reduce the Current Interest with
respect to each Class of Certificates, pro rata based upon the amount of
interest each such Class would otherwise be entitled to receive on such
Distribution Date. Notwithstanding the foregoing, there shall be no reduction
of the Servicing Fee in connection with Prepayment Interest Shortfalls related
to the Relief Act and the Servicer shall not be obligated to pay Compensating
Interest with respect to Prepayment Interest Shortfalls related to the Relief
Act.

      SECTION 4.03. Distributions on the REMIC Interests.

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

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      (b) On each 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, an amount equal to any prepayment
      penalties collected on the Mortgage Loans and (A) any amounts paid by
      the Seller 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;

            (ii) to each Class of the Class R, Class A-1 and Class A-2
      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
      any Interest Carry Forward Amount to all of the Class R, Class A-1 and
      Class A-2 Certificates, such amount will be distributed pro rata among
      each Class of the Class R, Class A-1 and Class A-2 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, Class A-1 and Class A-2
      Certificates;

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

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

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

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

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

            (viii) [RESERVED]; and

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

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

      (c) 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).

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         (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) The Group One Principal Distribution Amount will be
         distributed sequentially to the Class R and Class A-1 Certificates
         until their respective Certificate Principal Balances have been reduced
         to zero and the Group Two Principal Distribution Amount will be
         distributed to the Class A-2 Certificates until the Certificate
         Principal Balance thereof has been reduced to zero;

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

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

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

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

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

                  (vii) 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)(ix) and 4.04(d)(vii) hereof and, to the
extent required to make the distributions set forth below in clauses (i) through
(vii) of this Section 4.04(e), and each such distribution shall be made only
after all distributions pursuant to Sections 4.04(b) and (d) above shall have
been made until such remainders shall have been fully distributed for such
Distribution Date:

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

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

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

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

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

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

                  (vii) to the Offered Certificates, on a pro rata basis, the
         Floating Rate Certificate Carryover for each such class; and

                  (viii) 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)(viii) as follows:

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

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

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

         (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 and Subordinated Certificates in the following order of
priority:

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

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

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

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

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

                  (vi) 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.

         (j) The Trustee is hereby directed by the Depositor to execute the
Cap Contract on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of such Cap
Contract, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Trustee under the Cap Contract at
closing shall be paid by the

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Depositor. Notwithstanding anything to the contrary contained herein or in the
Cap Contract, the Trustee shall not be required to make any payments to the
counterparty under the Cap Contract. Any payments received under the terms of
the Cap Contract will be available to pay the holders of the Offered
Certificates up to the amount of any Floating Rate Certificate Carryovers
remaining after all other distributions required under this Section 4.04 are
made on such Distribution Date, other than Floating Rate Certificate Carryovers
attributable to the fact that Applied Realized Loss Amounts are not allocated to
the Class A and Class R Certificates. Any amounts received under the terms of
the 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
shall be paid to the Offered Certificates, pro rata based upon such Floating
Rate Certificate Carryovers for each class of Offered Certificates.

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

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

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

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

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

         SECTION 4.05.    Monthly Statements to Certificateholders.

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

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

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

                  (iii) any Interest Carry Forward Amount for each Class of the
         Offered Certificates;

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

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

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

                  (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;

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

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

                  (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 last day of the calendar month preceding such
         Distribution Date and the date of acquisition thereof, in the aggregate
         and with respect to the Group One Mortgage Loans and Group Two Mortgage
         Loans;

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

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

                  (xv) whether a Stepdown Trigger Event or Stepup Trigger Event
         has occurred and is in effect;

                  (xvi) 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;

                  (xvii) with respect to each Class Certificates any Interest
         Carryover Amount with respect to such Distribution Date for each such
         Class, any Interest Carryover Amount paid for each such Class and any
         remaining Interest Carryover Amount for each such Class;

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

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

                  (xx) reserved;

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

                  (xxii) the amount of any payments to each Class of
         Certificates that are treated as payments received in respect of a
         REMIC Regular 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; and

                  (xxiii) as of each Distribution Date, the amount, if any, to
         be deposited in the Cap Contract Account pursuant to the Cap Contract
         as described in Section 4.04(j) and the amount thereof to be paid to
         the Offered Certificates as described in Section 4.04(j) hereof.

         (b) The Servicer shall deliver to the NIM Insurer a copy of any report
delivered by the Servicer to the Trustee.

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

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

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                  (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 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                     $321,788,000.00
A-2                $25,000.00                     $1.00                     $150,000,000.00
M-1                $25,000.00                     $1.00                      $38,525,000.00
M-2                $25,000.00                     $1.00                      $31,913,000.00
M-3                $25,000.00                     $1.00                       $9,775,000.00
B-1                $25,000.00                     $1.00                      $15,813,000.00
B-2                $25,000.00                     $1.00                       $7,186,000.00
C                       (1)                        (1)                           $29,168.58
R                     $100.00                      N/A                              $100.00
P                       (2)                        (2)                                (2)
</TABLE>

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(1)      The Class C Certificates shall not have a minimum dollar denominations
         as the Certificate Principal Balance thereof shall vary over time as
         described herein.

(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 25%.

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

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

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

         At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of a Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute
and the Trustee shall authenticate and deliver the Certificates that the
Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of Transfer or exchange
shall be accompanied by a 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, whether or not such notes
are guaranteed by the NIM Insurer) each certify to each 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 each 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.

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No transfer of an ERISA Restricted Certificate that is a Class R Certificate
may be made to any Person that is an employee benefit plan subject to Title I
of ERISA, a plan subject to Section 4975 of the Code or a plan subject to any
state, local or other federal law substantively similar to the foregoing
provisions of ERISA or the Code ("Similar Law"), or to any Person directly or
indirectly acting on behalf of or using any assets of any such plan
(collectively, "Plan"). Each Person to whom a Class R Certificate is to be
transferred shall be required or deemed to represent that it is not a Plan.

         No transfer of an ERISA-Restricted Certificate that is a Class C or
Class P Certificate shall be made to any Person unless the Trustee has
received (A) a representation that either (I) such transferee is not a Plan,
or (II) if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, a representation that such transferee is an insurance company
that is acquiring the Certificate with funds contained in an "insurance
company general account," as defined in Section V(e) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(B) solely in the case of any such Certificate that is a Definitive
Certificate, an Opinion of Counsel satisfactory to the Trustee to the effect
that the acquisition and holding of such Certificate will not constitute or
result in a nonexempt prohibited transaction under ERISA or the Code, or a
violation of Similar Law, and will not subject the Trustee or the NIM Insurer
to any obligation in addition to those expressly undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Trustee or the NIM
Insurer.

                  For purposes of the two immediately preceding paragraphs of
this Subsection 5.02(b), other than clause (B) in the immediately preceding
paragraph, the representations as set forth therein shall be deemed to have
been made to the Trustee by the transferee's acceptance of an ERISA Restricted
Certificate (or the acceptance by a Certificate Owner of the beneficial
interest in any Class of ERISA Restricted Certificates). Notwithstanding any
other provision herein to the contrary, any purported transfer of an ERISA
Restricted Certificate to or on behalf of a Plan without the delivery to the
Trustee of a representation or an Opinion of Counsel satisfactory to the
Trustee as described above shall be void and of no effect. Neither the Trustee
nor the NIM Insurer shall be under any liability to any Person for any
registration of transfer of any ERISA Restricted Certificate that is in fact
not permitted by this Section 5.02(b) nor shall the Trustee be under any
liability for making any payments due on such Certificate to the Holder
thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the transfer was registered by the
Trustee in accordance with the foregoing requirements. The Trustee and the NIM
Insurer shall be entitled, but not obligated, to recover from any Holder of
any ERISA Restricted Certificate that was in fact a Plan and that held such
Certificate in violation of this Section 5.02(b) all payments made on such
ERISA Restricted Certificate at and after at the time it commenced such
holding. Any such payments so recovered shall be paid and delivered to the
last preceding Holder of such Certificate that is not a Plan.

         No Transfer of a Class C 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 Code) or (ii) a Disqualified Organization 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 a
Class C Certificate unless the Trustee shall have been furnished with a
Transferee Letter or a letter from the initial Holder of the Class C
Certificates in the form attached as Exhibit M. Any Transfer of a Class C
Certificate in violation of the provisions of

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this Section 5.02(b) shall be absolutely null and void and the purported
Transferee shall acquire absolutely no rights in such Class C Certificate.

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

                  (iii) Each Person holding or acquiring any Ownership Interest
         in a Class R Certificate shall agree (A) to obtain a Transfer Affidavit
         from any other Person to whom such Person attempts to Transfer its
         Ownership Interest in a Class R Certificate, (B) to obtain a Transfer
         Affidavit from any Person for whom such Person is acting as nominee,
         trustee or agent in connection with any Transfer of a Class R
         Certificate and (C) not to Transfer its Ownership Interest in a Class R
         Certificate or to cause the Transfer of an Ownership Interest in a
         Class R Certificate to any other Person if it has actual knowledge that
         such Person is not a Permitted Transferee. Further, no transfer, sale
         or other disposition of any Ownership Interest in a Class R Certificate
         may be made to a person who is not a U.S. Person (within the meaning of
         section 7701 of the Code) unless such person furnishes the transferor
         and the Trustee with a duly completed and effective Internal Revenue
         Service Form W-8ECI (or any successor thereto) and the Trustee consents
         to such transfer, sale or other disposition in writing.

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Class R Certificate in violation of the provisions of
         this Section 5.02(c) shall be absolutely null and void and shall vest
         no rights in the purported Transferee. If any purported transferee
         shall become a Holder of a Class R Certificate in violation of the
         provisions of this Section 5.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Class R
         Certificate. The Trustee shall be under no liability to any Person for
         any registration of Transfer of a Class R Certificate that is in fact
         not permitted by Section 5.02(b) and this Section 5.02(c) or for making
         any payments due on such Certificate to the Holder thereof or taking
         any other action with respect to such Holder under the provisions of
         this Agreement so long as the Transfer was registered after receipt of
         the related Transfer Affidavit. The Trustee shall be entitled but not
         obligated to recover from any Holder of a Class R Certificate that was
         in fact not a Permitted Transferee at the time it became a Holder or,
         at such

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         subsequent time as it became other than a Permitted Transferee, all
         payments made on such Class R Certificate at and after either such
         time. Any such payments so recovered by the Trustee shall be paid and
         delivered by the Trustee to the last preceding Permitted Transferee of
         such Certificate.

                  (v) At the option of the Holder of the Class R Certificate,
         the Class LTR Interest, and the Residual Interest may be severed and
         represented by separate certificates; provided, however, that such
         separate certification may not occur until the NIM Insurer and the
         Trustee receive an Opinion of Counsel addressed to the Trustee to the
         effect that separate certification in the form and manner proposed
         would not result in the imposition of federal tax upon the Trust Fund
         or any of the REMICs provided for herein or cause any of the REMICs
         provided for herein to fail to qualify as a REMIC; and provided
         further, that the provisions of Sections 5.02(b) and (c) will apply to
         each such separate certificate as if the separate certificate were a
         Class R Certificate. If, as evidenced by an Opinion of Counsel, it is
         necessary to preserve the REMIC status of any of the REMICs provided
         for herein, the Class LTR Interest, and the Residual Interest shall be
         severed and represented by separate Certificates.

         The restrictions on Transfers of a Class R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee and the NIM Insurer of an Opinion of
Counsel addressed to the Trustee, which Opinion of Counsel shall not be an
expense of the Trustee or the Depositor, to the effect that the elimination of
such restrictions will not cause any of the REMICs provided for herein to fail
to qualify as a REMIC at any time that the Certificates are outstanding or
result in the imposition of any tax on the Trust Fund, any REMIC provided for
herein, a Certificateholder or another Person. Each Person holding or acquiring
any Ownership Interest in a Class 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 Trust Fund, the Depositor or the Trustee.

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

         If (a) any mutilated Certificate is surrendered to the Trustee or the
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and of the ownership thereof and (b) there is
delivered to the Trustee and the NIM Insurer such security or indemnity as may
be required by them to save each of them harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like Class, tenor and Percentage Interest. In connection
with the issuance of any new Certificate under this Section 5.03, the Trustee
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate issued pursuant to this Section 5.03 shall
constitute complete and indefeasible evidence of ownership in the Trust Fund,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time. All Certificates

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

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

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

         SECTION 5.06.    Book-Entry Certificates.

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

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

         (b) the Depositor, the Trustee and the NIM Insurer 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;

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      (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.

      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 and the NIM Insurer,
through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners of such Class
requesting the same. The Depositor shall provide the Trustee with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Trustee of any such Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall authenticate and deliver such Definitive
Certificates. Neither the Depositor nor the Trustee shall be liable for any
delay in delivery of such instructions and each may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon or to
be performed by the Depository shall be deemed to be imposed upon and performed
by the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of such Definitive
Certificates as Certificateholders hereunder.

      SECTION 5.09.    Maintenance of Office or Agency.

      The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange. The Trustee

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      initially designates its office at 2001 Bryan Street, 8th Floor, Dallas,
Texas 75201, Attention: Institutional Trust Services/Transfer Department as
offices for such purposes. The Trustee will give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.

                                   ARTICLE VI
                         THE DEPOSITOR AND THE SERVICER

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

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

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

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

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

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

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

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

      SECTION 6.04.  Limitation on Resignation of Servicer.

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

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

      SECTION 6.05.  Errors and Omissions Insurance; Fidelity Bonds.

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

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<PAGE>
                                   ARTICLE VII
                        DEFAULT; TERMINATION OF SERVICER

      SECTION 7.01. Events of Default.

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

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

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

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

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

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

      If an Event of Default shall occur with respect to the Servicer, then, and
in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, or solely with respect to
clause (i) above by 5:00 p.m. on the Servicer Remittance Date, the Trustee may
(with the written consent of the NIM Insurer, except after a NIM Insurer
Default), or at the direction of the NIM Insurer or the Holders of Certificates
evidencing not less than 50% of the Voting Rights evidenced by the Certificates
(with the written consent of the NIM Insurer, except after a NIM Insurer
Default), shall, by notice in writing to the Servicer (with a copy to each
Rating Agency), terminate all of the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. On or after the receipt
by the Servicer of such written notice, all authority and power of the Servicer
hereunder, 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

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

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

      SECTION 7.02.  Servicer Trigger Event

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

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

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

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

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

      SECTION 7.03.   Trustee to Act; Appointment of Successor.

      On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 or 7.02 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof and
applicable law including the obligation to make advances pursuant to Section
4.01. As compensation therefor, subject to the last paragraph of Section 7.01 or
7.02, as applicable, the Trustee shall be entitled to all compensation and
reimbursement for costs and expenses that the Servicer would have been entitled
to hereunder if the Servicer had continued to act hereunder. Notwithstanding the
foregoing, if the Trustee has become the successor to the Servicer in accordance
with Section 7.01 or 7.02 hereof, the Trustee may, if it shall be unwilling to
so act, or shall, if it is prohibited by applicable law from making Advances
pursuant to Section 4.01 hereof or if it is otherwise unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which successor shall be
approved by the NIM Insurer and which does not adversely affect the then current
rating of the Certificates by each Rating Agency as the successor to the
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder. Any successor servicer shall be
an institution that is acceptable to the NIM Insurer and is a Fannie Mae and
Freddie Mac approved seller/servicer in good standing, that has a net worth of
at least $15,000,000, and that is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, that contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer (other than liabilities of the Servicer under Section 6.03 hereof
incurred prior to termination of the Servicer under Section 7.01 or 7.02), with
like effect as if originally named as a party to this Agreement; and provided
further that each Rating Agency acknowledges that its rating of the Certificates
in effect immediately prior to such assignment and delegation will not be
qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Servicer hereunder shall be effective until
the Trustee and the NIM Insurer shall have consented thereto, prior written
consent of the NIM Insurer is obtained and written notice of such proposed
appointment shall have been provided by the Trustee to each Certificateholder.
The Trustee shall not resign as servicer until a successor servicer has been
appointed and has accepted such appointment. Pending appointment of a successor
to the

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

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

      SECTION 7.04.    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, the
NIM Insurer and to each Rating Agency.

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

                                  ARTICLE VIII
                             CONCERNING THE TRUSTEE

      SECTION 8.01.    Duties of Trustee.

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

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

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<PAGE>
the Trustee will provide notice thereof to the NIM Insurer and the
Certificateholders and take such further action as directed by the NIM Insurer
and the Certificateholders.

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

            (i) prior to the occurrence of an Event of Default, and after the
      curing of all such Events of Default that may have occurred, the duties
      and obligations of the Trustee shall be determined solely by the express
      provisions of this Agreement, the Trustee shall not be liable,
      individually or as Trustee, except for the performance of such duties and
      obligations as are specifically set forth in this Agreement, no implied
      covenants or obligations shall be read into this Agreement against the
      Trustee and the Trustee may conclusively rely, as to the truth of the
      statements and the correctness of the opinions expressed therein, upon any
      certificates or opinions furnished to the Trustee and conforming to 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 NIM Insurer or 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 NIM Insurer or the Holders of the
      Certificates representing more than 50% of the Voting Rights allocated to
      any Class of Certificates, shall take such action as may be appropriate to
      enforce such payment or performance, including the institution and
      prosecution of appropriate proceedings.

      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:

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<PAGE>
            (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 NIM Insurer
      or 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);

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

            (ix) the Trustee shall be under no obligation to exercise any of the
      trusts or powers vested in it by this Agreement or to make any
      investigation of matters arising hereunder or to institute, conduct or
      defend any litigation hereunder or in relation hereto at the request,
      order or direction of any of the NIM Insurer or the Certificateholders,
      pursuant to the provisions of this Agreement, unless the NIM Insurer or
      such Certificateholders shall have offered to the Trustee reasonable
      security or indemnity against the costs, expenses and liabilities that may
      be incurred therein or thereby; and

            (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

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<PAGE>
      indemnified by the Servicer for all liabilities, costs and expenses
      incurred by the Trustee in connection with the Servicer's use or misuse of
      such powers of attorney.

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

      SECTION 8.03.    Trustee Not Liable for Mortgage Loans.

      The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement, of any Mortgage Loan, of any
guarantee of a NIM Insurer or related document other than with respect to the
Trustee's execution and authentication of the Certificates. The Trustee shall
not be accountable for the use or application by the Depositor or the Servicer
of any funds paid to the Depositor or the Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Collection Account or 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 Trust Fund for any loss,
liability or expense incurred in connection with any legal proceeding or
incurred without negligence or willful misconduct on their part, arising out of,
or in connection with, the acceptance or administration of the trusts created
hereunder or in connection with the performance of their duties hereunder,
including any applicable fees and expenses payable hereunder and the costs and
expenses of defending themselves against any claim in connection with the
exercise or performance of any of their powers or duties hereunder, provided
that:

            (i) with respect to any such claim, the Trustee shall have given the
      Depositor and the Holders written notice thereof promptly after the
      Trustee shall have knowledge thereof; provided that failure to so notify
      shall not relieve the Trust Fund of the obligation to indemnify the
      Trustee; however, any reasonable delay by the Trustee to provide written
      notice to the Depositor and the Holders promptly after the Trustee shall
      have obtained knowledge of a claim shall not relieve the Trust Fund of the
      obligation to indemnify the Trustee under this Section 8.06;

            (ii) while maintaining control over its own defense, the Trustee
      shall cooperate and consult fully with the Depositor in preparing such
      defense;

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<PAGE>
            (iii) notwithstanding anything to the contrary in this Section 8.06,
      the Trust Fund shall not be liable for settlement of any such claim by the
      Trustee entered into without the prior consent of the Depositor, which
      consent shall not be unreasonably withheld; and

            (iv) any such loss, liability or expense to be indemnified by the
      Trust Fund must constitute an "unanticipated expense" of the Trust Fund
      within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).

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

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

      (c) The Trustee's right to indemnification and reimbursement shall be
subject to a cap of $300,000, excluding any Servicing Transfer Costs and any
auction expenses incurred by the Trustee in connection with Section 9.01(a)(i),
in the aggregate in any calendar year; 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 and all amounts
which the NIM Insurer is entitled to be paid or reimbursed shall have been paid
or reimbursed. Any amounts not in excess of this cap may be withdrawn by the
Trustee from the Certificate Account at any time.

      SECTION 8.07.  Eligibility Requirements for Trustee.

      The Trustee hereunder shall, at all times, be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers having a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating that would
not cause any of the Rating Agencies to reduce their respective ratings of any
Class of Certificates below the ratings issued on the Closing Date (or having
provided such security from time to time as is sufficient to avoid such
reduction) and reasonably acceptable to the NIM Insurer. If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 8.07 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.08 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor and the NIM Insurer and their respective
Affiliates; provided, however, that such corporation cannot be an Affiliate of
the Servicer other than the Trustee in its role as successor to the Servicer.

      SECTION 8.08.    Resignation and Removal of Trustee.

      The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor and
the NIM Insurer and by mailing notice of resignation by first class mail,
postage prepaid, to the Certificateholders at their addresses appearing on

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the Certificate Register and each Rating Agency, not less than 60 days before
the date specified in such notice when, subject to Section 8.09, such
resignation is to take effect, and (2) acceptance of appointment by a successor
trustee acceptable to the NIM Insurer in accordance with Section 8.09 and
meeting the qualifications set forth in Section 8.07. If no successor trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.

      If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor or the NIM Insurer, (ii) the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the NIM
Insurer may remove the Trustee and the Depositor with the consent of the NIM
Insurer shall promptly appoint a successor trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee, one
copy of which shall be delivered to the Servicer and one copy of which shall be
delivered to the successor trustee.

      The Holders evidencing at least 51% of the Voting Rights of all Classes of
Certificates, with the consent of the NIM Insurer, or the NIM Insurer upon
failure of the Trustee to perform its obligations hereunder may at any time
remove the Trustee and the Depositor shall appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized (or by the NIM Insurer), one complete
set of which instruments shall be delivered by the successor Trustee to the
Servicer, one complete set to the Trustee so removed and one complete set to the
successor so appointed. Notice of any removal of the Trustee shall be given to
the NIM Insurer and each Rating Agency by the Successor Trustee.

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

      SECTION 8.09.    Successor Trustee.

      Any successor trustee appointed as provided in Section 8.08 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee, the NIM Insurer and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein.

      No successor trustee shall accept appointment as provided in this Section
8.09 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.

      Upon acceptance of appointment by a successor trustee as provided in this
Section 8.09, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.

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      SECTION 8.10.    Merger or Consolidation of Trustee.

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

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

      Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee and the NIM Insurer to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the Trust
Fund or any part thereof, whichever is applicable, and, subject to the other
provisions of this Section 8.11, such powers, duties, obligations, rights and
trusts as the Servicer and the Trustee may consider necessary or desirable. Any
such co-trustee or separate trustee shall be subject to the written approval of
the Servicer and the NIM Insurer. 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 and the NIM
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.07 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.09.

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

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

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

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

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

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

      SECTION 8.12.    Tax Matters.

      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 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 days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for each of the REMICs provided for
herein; (c) make or cause to be made elections, on behalf of each of the REMICs
provided for herein to be treated as a REMIC on the federal tax return of such
REMICs for their first taxable years (and, if necessary, under applicable state
law); (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions or other applicable tax
law, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class 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

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affairs of each of the REMICs and grantor trusts provided for herein at all
times that any Certificates are outstanding so as to maintain the status of each
of the REMICs provided for herein as a REMIC under the REMIC Provisions and the
status of each of the grantor trusts provided for herein as a grantor trust
under Subpart E, Part I of Subchapter J of the Code; (g) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of tax upon any such REMIC; (h) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the grantor trust status under Subpart E, Part I of Subchapter J
of the Code of any of the grantor trusts provided for herein or result in the
imposition of tax upon any such grantor trust; (i) pay, from the sources
specified in the last paragraph of this Section 8.12, the amount of any federal,
state and local taxes, including prohibited transaction taxes as described
below, imposed on each of the REMICs provided for herein prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (j) sign or cause to be signed federal, state
or local income tax or information returns; (k) maintain records relating to
each of the REMICs provided for herein, including but not limited to the income,
expenses, assets and liabilities of each of the REMICs 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 10
days after the Closing Date all information or data that the Trustee requests in
writing and determines to be relevant for tax purposes to the valuations and
offering prices of the Certificates, including, without limitation, the price,
yield, prepayment assumption and projected cash flows of the Certificates and
the Mortgage Loans. Thereafter, the Depositor shall provide to the Trustee
promptly upon written request therefor, any such additional information or data
that the Trustee may, from time to time, request in order to enable the Trustee
to perform its duties as set forth herein. The Depositor hereby agrees to
indemnify the Trustee for any losses, liabilities, damages, claims or expenses
of the Trustee arising from any errors or miscalculations of the Trustee that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trustee on a timely basis.

      In the event that any tax is imposed on "prohibited transactions" of any
of the REMICs provided for herein as defined in Section 860F(a)(2) of the Code,
on the "net income from foreclosure property" of any of such REMICs as defined
in Section 860G(c) of the Code, on any contribution to the Trust Fund after the
Startup Day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, if not paid as otherwise provided for herein, such tax shall be paid by
(i) the Trustee, if any such other tax arises out of or results from a breach by
the Trustee of any of its obligations under this Agreement or as a result of the
location of the Trustee, (ii) any party hereto (other than the Trustee) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or as a result of the
location of such other party or (iii) in all other cases, or in the event that
any liable party here fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid first with amounts otherwise to be
distributed to the Class R Certificateholders (pro rata) pursuant to Section
4.04, and second with amounts otherwise to be distributed to all other
Certificateholders in the following order

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of priority: first, to the Class C Certificates (pro rata), second, to the Class
B-2 Certificates (pro rata), third, to the Class B-1 Certificates (pro rata),
fourth to the Class M-3 Certificates (pro rata), fifth, to the Class M-2
Certificates (pro rata), sixth, to the Class M-1 Certificates (pro rata), and
seventh, to the Class A Certificates (pro rata). Notwithstanding anything to the
contrary contained herein, to the extent that such tax is payable by the Class 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.

      (a) Each of the Depositor and the Trustee agrees not to knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein.

                                   ARTICLE IX
                                   TERMINATION

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

      (a) Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earliest of (i) the successful completion of the
auction referred to in Section 9.01(b), (ii) the exercise by the NIM Insurer (or
the Servicer) of the Clean Up Call on any Distribution Date on or after the
Clean Up Call Date and (iii) the later of (x) the maturity or other liquidation
(or any Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund and the disposition of all REO Property and (y) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death of
the last survivor of the descendants of Joseph P. Kennedy, the late Ambassador
of the United States to the Court of St. James's, living on the date hereof and
(ii) the 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 NIM Insurer (or
the Servicer as provided in clause (e) below) may, at its option, terminate the
Trust Fund on any Distribution Date by purchasing all of the Mortgage Loans and
REO Properties at the price equal to the Clean Up Call Price.

Notwithstanding anything to the contrary herein, the Auction Termination Amount
received by the Trustee or the Clean Up Call Price paid by the NIM Insurer or
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 NIM Insurer or the Servicer shall be paid by the NIM
Insurer or the Servicer to the Trustee for deposit into the Certificate Account.

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

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

      Any purchase shall be accomplished by deposit into the Certificate Account
of the amount paid by the winning bidder if an Auction Termination has occurred
or the amount described in the definition of "Clean Up Call Price" and only
following the delivery of an Opinion of Counsel in form and substance acceptable
to the Trustee that such termination is a "Qualified Liquidation" under Section
860F of the Code.
      (d) The right of the Depositor to direct the Trustee to effect an Auction
Termination or of the NIM Insurer or the Servicer to effect a Clean Up Call
pursuant to clause (a)(i) or (a)(ii) above shall be conditioned upon the
aggregate Stated Principal Balance of the Mortgage Loans, at the time of any
such repurchase, aggregating ten percent (10%) or less of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.

      (e) In the event that the Trustee is unable to complete a sale at the
Auction Termination and the NIM Insurer does not exercise a Clean Up Call, 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) The Class R Certificateholder hereby assigns to the Class C
Certificateholders that portion of any amount received by the Class R
Certificate upon an Auction Termination or Clean Up Call of the Trust Fund that
is attributable to clause (C) of the definition of Auction Termination Price or
clause (c) of the definition of Clean Up Call Price and required to cover what
would otherwise be a shortfall in the amounts described in clause (C) of the
definition of Auction Termination Price or clause (c) of the definition of Clean
Up Call Price.

      SECTION 9.02.    Final Distribution on the Certificates.

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

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terminates the Trust Fund pursuant to Section 9.01(a)(ii) or 9.01(e), at least
10 days prior to the date notice is to be mailed to the affected
Certificateholders, the Trustee shall notify the Depositor and the Servicer of
the date such electing party intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.

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

      In the event such notice is given, the Servicer shall cause all funds in
the Collection Account to be deposited in the Certificate Account on the
Business Day prior to the applicable Distribution Date in an amount equal to the
final distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Trustee of a Request for
Release therefor, the Trustee shall promptly release to the Trustee or the NIM
Insurer, as applicable, the Mortgage Files for the Mortgage Loans.

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

      In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto. Upon payment to the Class R Certificateholders of such
funds and assets, the Trustee shall have no further duties or obligations with
respect thereto.

      SECTION 9.03.    Additional Termination Requirements.

      (a) In the event the Trustee is able to effect an Auction Termination or
the NIM Insurer or the Servicer conducts a Clean Up Call as provided in Section
9.01, the Trust Fund shall be terminated in accordance with the following
additional requirements, unless the Trustee has been supplied with an Opinion of
Counsel addressed to the Trustee, at the expense of the Trust Fund or the NIM
Insurer, as applicable, to the effect that the failure of the Trust Fund to
comply with the requirements of this Section 9.03 will not (i) result in the
imposition of taxes on "prohibited transactions" of any of the REMICs

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provided for herein as defined in section 860F of the Code, or (ii) cause any of
the REMICs provided for herein to fail to qualify as a REMIC at any time that
any Certificates are outstanding:

            (i) The Depositor shall establish a 90-day liquidation period and
      notify the Trustee thereof, which shall in turn specify the first day of
      such period in a statement attached to the final tax returns of each of
      the REMICs provided for herein pursuant to Treasury Regulation Section
      1.860F-1. The Depositor shall satisfy all the requirements of a qualified
      liquidation under Section 860F of the Code and any regulations thereunder,
      as evidenced by an Opinion of Counsel obtained at the expense of the Trust
      Fund or the NIM Insurer, as applicable;

            (ii) During such 90-day liquidation period, and at or prior to the
      time of making the final payment on the Certificates, the Depositor as
      agent of the Trustee shall sell all of the assets of the Trust Fund for
      cash; and

            (iii) At the time of the making of the final payment on the
      Certificates, the Trustee shall distribute or credit, or cause to be
      distributed or credited, to the Class R Certificateholders all cash on
      hand (other than cash retained to meet outstanding claims known to the
      Trustee), and the Trust Fund shall terminate at that time, whereupon the
      Trustee shall have no further duties or obligations with respect to sums
      distributed or credited to the Class R Certificateholders.

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

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

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

      SECTION 10.01.    Amendment.

      This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, with the consent of the NIM Insurer and without the
consent of any of the Certificateholders to,

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

            (ii)  To correct, modify or supplement any provision 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
      effect in any material respect the interests of any Holder; provided,
      further, however, that such amendment will be deemed to not adversely
      affect in any material respect the interest of any Holder if the Person
      requesting such amendment obtains a letter from each Rating

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      Agency stating that such amendment will not result in a reduction or
      withdrawal of its rating of any Class of the Certificates, it being
      understood and agreed that any such letter in and of itself will not
      represent a determination as to the materiality of any such amendment and
      will represent a determination only as to the credit issues affecting any
      such rating.

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

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

      Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel addressed to the Trustee, which opinion shall be
an expense of the party requesting such amendment but in any case shall not be
an expense of the Trustee, to the effect that such amendment is permitted
hereunder and will not cause the imposition of any tax on the Trust Fund, any of
the REMICs provided for herein or the Certificateholders or cause any of the
REMICs provided for herein to fail to qualify as a REMIC at any time that any
Certificates are outstanding. A copy of such Opinion of Counsel shall be
provided to the NIM Insurer.

      Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee or upon the written request of
the Trustee to the Servicer, the Servicer shall furnish written notification of
the substance of such amendment to each Certificateholder, the NIM Insurer and
each Rating Agency.

      It shall not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.

                                      105
<PAGE>
      Nothing in this Agreement shall require the Trustee or the Servicer to
enter into an amendment without receiving an Opinion of Counsel, satisfactory to
the Trustee or the Servicer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01.

      The Trustee may, but shall not be obligated to, enter into any supplement,
modification or waiver which affects its rights, duties or obligations
hereunder.

      SECTION 10.02.    Counterparts.

      This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.

      SECTION 10.03.    Governing Law.

      THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

      SECTION 10.04.    Intention of Parties.

      It is the express intent of the parties hereto that the conveyance of the
Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies
and any modifications, extensions and/or assumption agreements and private
mortgage insurance policies relating to the Mortgage Loans by the Depositor to
the Trustee be, and be construed as, an absolute sale thereof to the Trustee. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Depositor to the Trustee. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant by the Depositor
to the Trustee, for the benefit of the Certificateholders, of a security
interest in all of the assets that constitute the Trust Fund, whether now owned
or hereafter acquired.

      The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.

                                      106
<PAGE>
      SECTION 10.05.    Notices.

      (a) The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency and the NIM Insurer with respect to each of the following of
which a Responsible Officer of the Trustee has actual knowledge:

            (i)   Any material change or amendment to this Agreement;

            (ii)  The occurrence of any Event of Default that has not been
      cured;

            (iii) The resignation or termination of the Trustee or the
      Servicer and the appointment of any successor;

            (iv)  The repurchase or substitution of Mortgage Loans
      pursuant to Sections 2.02, 2.03 and 3.12;

            (v)   The final payment to Certificateholders; and

            (vi)  Any change in the location of the Certificate Account or
      the Certificate Account.

      The Trustee shall promptly furnish or make available to each Rating Agency
copies of the following:

            (i)   Each report to Certificateholders described in Section
      4.05;

            (ii)  Each annual statement as to compliance described in
      Section 3.17; and

            (iii) Each annual independent public accountants' servicing report
      described in Section 3.18.

      (b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of the
Depositor, Merrill Lynch Mortgage Investors, Inc., 250 Vesey Street, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Trustee, JPMorgan Chase Bank, 4 New York Plaza,
6th Floor, New York, New York 10004, Attention: Institutional Trust
Services/Structured Finance Services, SURF Series 2004-BC2; (c) in the case of
the Rating Agencies, (i) Standard and Poor's Ratings Services, a division of the
McGraw Hill Companies, Inc., 55 Water Street, New York, New York 10041, (ii)
Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007; (d)
in the case of NIM Insurer, an address to be specified; (e) in the case of the
Servicer, Litton Loan Servicing LP, 4282 Loop Central Drive, Houston, Texas
77018-2226, Attention: Larry Litton, Sr.; and in the case of any of the
foregoing persons, such other addresses as may hereafter be furnished by any
such persons to the other parties to this Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.

      SECTION 10.06.    Severability of Provisions.

      If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

                                      107
<PAGE>
      SECTION 10.07.    Assignment.

      Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor.

      SECTION 10.08.    Limitation on Rights of Certificateholders.

      The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

      No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

      No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, the Holders
of Certificates evidencing not less than 25% of the Voting Rights evidenced by
the Certificates shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates and/or the NIM
Insurer, or to obtain or seek to obtain priority over or preference to any other
such Holder and/or the NIM Insurer or to enforce any right under this Agreement,
except in the manner herein provided and for the common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 10.08, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

      SECTION 10.09.    Inspection and Audit Rights.

      The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the NIM Insurer, the Depositor or the Trustee during the
Servicer's normal business hours, to examine all the books of account, records,
reports and other papers of the Servicer relating to the Mortgage Loans, to make
copies and extracts therefrom, to cause such books to be audited by independent
certified public accountants selected by the NIM Insurer, 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 NIM
Insurer,

                                      108
<PAGE>
Depositor or the Trustee of any right under this Section 10.09 shall be borne by
the party requesting such inspection; all other such expenses shall be borne by
the Servicer.

      SECTION 10.10.    Certificates Nonassessable and Fully Paid.

      It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.

      SECTION 10.11.    Third Party Rights.

      The NIM Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.

      SECTION 10.12.    Additional Rights of the NIM Insurer.

      (a) Each party to this Agreement, any agent thereof and any successor
thereto shall furnish to the NIM Insurer a copy of any notice, direction,
demand, opinion, schedule, list, certificate, report, statement, filing,
information, data or other communication provided by it or on its behalf to any
other Person pursuant to this Agreement at the same time, in the same form and
in the same manner as such communication is so provided and shall address or
cause such communication to be addressed to the NIM Insurer in addition to any
other addressee thereof. The Servicer shall cause the NIM Insurer to be an
addressee of any report furnished pursuant to this Agreement.

      (b) Wherever in this Agreement there shall be a requirement that there be
no downgrade, reduction, withdrawal or qualification of or other effect on the
rating of any Class of Certificates by any Rating Agency as of any date, there
also shall be deemed to be a requirement that there be no such effect on any
class of notes issued pursuant to the Indenture and guaranteed by the NIM
Insurer as of such date. In addition, unless there exists a continuance of any
failure by the NIM Insurer to make a required payment under the policy insuring
the NIM Notes (such event, a "NIM Insurer Default"), wherever in this Agreement
there shall be a requirement that any Person or any communication, object or
other matter be acceptable or satisfactory to or otherwise receive the consent
or other approval of any other Person (whether as a condition to the eligibility
of such Person to act in any capacity, as a condition to any circumstance or
state of affairs related to such matter, or otherwise), there also shall be
deemed to be a requirement that such Person or matter be approved in writing by
the NIM Insurer, which approval shall not be unreasonably withheld or delayed.

      SECTION 10.13.  Reserved.

      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

                                      109
<PAGE>
Person agrees to fund all the Advances and/or Servicing Advances required to be
made by the Servicer pursuant to this Agreement. No consent of the Trustee,
Certificateholders or any other party shall be required before the Servicer may
enter into an Advance Facility nor shall the Trustee or the Certificateholders
be a third party beneficiary of any obligation of an Advance Financing Person to
the Servicer. Notwithstanding the existence of any Advance Facility under which
an Advance Financing Person agrees to fund Advances and/or Servicing Advances,
(A) the Servicer (i) shall remain obligated pursuant to this Agreement to make
Advances and/or Servicing Advances pursuant to and as required by this Agreement
and (ii) shall not be relieved of such obligations by virtue of such Advance
Facility and (B) neither the Advance Financing Person nor any Servicer's
Assignee (as hereinafter defined) shall have any right to proceed against or
otherwise contact any Mortgagor for the purpose of collecting any payment that
may be due with respect to any related Mortgage Loan or enforcing any covenant
of such Mortgagor under the related Mortgage Loan documents.

      (b) If the Servicer enters into an Advance Facility, the Servicer and the
related Advance Financing Person shall deliver to the Trustee at the address set
forth in Section 10.05 hereof a written notice (an "Advance Facility Notice"),
stating (a) the identity of the Advance Financing Person and (b) the identity of
the Person (the "Servicer's Assignee") that will, subject to Section 10.14(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 Trust Fund for any claim, loss,
liability or damage resulting from any claim by the related Advance Financing
Person, except to the extent that such claim, loss, liability or damage resulted
from or arose out of negligence, recklessness or willful misconduct on the part
of the Depositor, the Trustee or any successor servicer, as the case may be, or
failure by the successor servicer or the Trustee, as the case may be, to remit
funds as

                                      110
<PAGE>
required by this Agreement or the commission of an act or omission to act by the
successor servicer or the Trustee, as the case may be, and the passage of any
applicable cure or grace period, such that an Event of Default under this
Agreement occurs or such entity is subject to termination for cause under this
Agreement. The Servicer shall maintain and provide to any successor servicer
and, upon request, the Trustee a detailed accounting on a loan-by-loan basis as
to amounts advanced by, pledged or assigned to, and reimbursed to any Advance
Financing Person. The successor servicer shall be entitled to rely on any such
information provided by the predecessor Servicer, and the successor servicer
shall not be liable for any errors in such information.

      (d)   [RESERVED]

      (e) As between a predecessor Servicer and its Advance Financing Person, on
the one hand, and a successor servicer and its Advance Financing Person, if any,
on the other hand, Advance Reimbursement Amounts on a loan-by-loan basis with
respect to each Mortgage Loan as to which an Advance and/or Servicing Advance
shall have been made and be outstanding shall be allocated on a "first-in, first
out" basis. In the event the Servicer's Assignee shall have received some or all
of an Advance Reimbursement Amount related to Advances and/or Servicing Advances
that were made by a Person other than such predecessor Servicer or its related
Advance Financing Person in error, then such Servicer's Assignee shall be
required to remit any portion of such Advance Reimbursement Amount to each
Person entitled to such portion of such Advance Reimbursement Amount. Without
limiting the generality of the foregoing, the Servicer shall remain entitled to
be reimbursed by the Advance Financing Person for all Advances and/or Servicing
Advances funded by the Servicer to the extent the related Advance Reimbursement
Amounts have not been assigned or pledged to such Advance Financing Person or
Servicer's Assignee.

      (f) For purposes of any Officer's Certificate of the Servicer made
pursuant to Section 4.01, any Non-Recoverable Advance or Non-Recoverable
Servicing Advance referred to therein may have been made by such Servicer or any
predecessor Servicer. In making its determination that any Advance or 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.

                                      111
<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:  John G. Winchester
                                 Title: Vice President

                                 LITTON LOAN SERVICING LP,
                                       as Servicer

                                 By:  ________________________________________
                                 Name:  Janice McClure
                                 Title: Senior Vice President

                                 JPMORGAN CHASE BANK
                                    not in its individual capacity, but
                                       solely as Trustee

                                 By:  ________________________________________
                                 Name:  Andrew M. Cooper
                                 Title: Assistant Vice President

<PAGE>

                                   EXHIBIT A

                         FORMS OF OFFERED CERTIFICATES

                            [Intentionally Omitted]

                                      A-1
<PAGE>
                                  EXHIBIT B-1

                 MORTGAGE LOAN SCHEDULE - TOTAL MORTGAGE POOL

                            [Intentionally Omitted]

                                     B-1
<PAGE>
                                  EXHIBIT B-2

               MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS

                            [Intentionally Omitted]

                                     B-2
<PAGE>
                                  EXHIBIT B-3

               MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS

                            [Intentionally Omitted]

                                     B-3
<PAGE>
                                   EXHIBIT C

                                  [RESERVED]

                                      C-1
<PAGE>
                                   EXHIBIT D

                         FORM OF TRUSTEE CERTIFICATION

                                    [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York  10080

Litton Loan Servicing LP
4282 Loop Central Drive
Houston, Texas 77018-2226
Attention:  Larry Litton, Sr.;

Re:   Pooling and Servicing Agreement dated as of July 1, 2004 among Merrill
      Lynch Mortgage Investors, Inc., as depositor, Litton Loan Servicing LP,
      as servicer and JPMorgan Chase Bank, as trustee, relating to Specialty
      Underwriting and Residential Finance Trust, Mortgage Loan Asset-Backed
      Certificates, Series 2004-BC2

Ladies and Gentlemen:

      In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid
in full or listed on the attachment hereto) it has reviewed the Mortgage File
and the Mortgage Loan Schedule and has determined that:

      (i) All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;

      (ii) In connection with each Mortgage Loan as to which documentary
evidence of recording was not received on the Closing Date, it has received
evidence of such recording; and

      (iii) Such documents have been reviewed by it and such documents do not
contain any material omissions or defects within the meaning of Section 2.01
or 2.02.

      The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number and the name of the Mortgagor in each Mortgage File conform to the
respective Mortgage Loan number and name listed on the Mortgage Loan Schedule
and (ii) the existence in each Mortgage File of each of the documents listed
in subparagraphs (i)(A) through (E), inclusive, of Section 2.01 in the
Agreement and documents listed in clause (F) to the extent the Trustee has
received written notice of the existence of such documents from the Depositor
or the Seller. The Trustee makes no representations or warranties as to the
validity, legality, recordability, sufficiency, recordability, enforceability
or genuineness of any of the documents contained in each Mortgage Loan or the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.

                                     D-1
<PAGE>
      Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                JPMORGAN CHASE BANK, as Trustee

                                By:  ___________________________________________
                                Name:  _________________________________________
                                Title:  ________________________________________

                                     D-2
<PAGE>
                                   EXHIBIT E

                          FORM OF TRANSFEREE'S LETTER
             SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST,
           MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-BC2

                                    [DATE]

JPMorgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas 75201
Attention:  Institutional Trust Services-Transfer Department - SURF 2004-BC2

Ladies and Gentlemen:

      We propose to purchase the Specialty Underwriting and Residential
Finance Trust, Mortgage Loan Asset-Backed Certificates, Series 2004-BC2, Class
R Certificate, described in the Prospectus Supplement, dated June 22, 2004,
and Prospectus, dated June 18, 2004.

      1._______We certify that (a) we are not a disqualified organization and
(b) we are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of
any of the foregoing (except any entity treated as other than an
instrumentality of the foregoing for purposes of Section 168(h)(2)(D) of the
Internal Revenue Code of 1986, as amended (the "Code")), any organization
(other than a cooperative described in Section 521 of the Code) that is exempt
from taxation under the Code (unless such organization is subject to tax on
excess inclusions) and any organization that is described in Section
1381(a)(2)(C) of the Code. We understand that any breach by us of this
certification may cause us to be liable for an excise tax imposed upon
transfers to disqualified organizations.

      2._______We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to
pay our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificate, and (d) we
intend to pay any taxes associated with holding the Class R Certificate as
they become due and (e) we will not cause income from the Class R Certificate
to be attributable to a foreign permanent establishment or fixed base (within
the meaning of an applicable income tax treaty) of ours or another U.S.
taxpayer.

      3._______We acknowledge that we will be the beneficial owner of the
Class R Certificate and:1

      ___ The Class R Certificate will be registered in our name.

      ___ The Class R Certificate will be held in the name of our nominee
____________, which is not a disqualified organization.

--------
1     Check appropriate box and if necessary fill in the name of the
      Transferee's nominee.

                                    E-1-1
<PAGE>
      4._______We certify that we are not an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Code or a plan subject to
state, local law, or other federal law substantively materially similar to the
foregoing provisions of ERISA and the Code (each, a "Plan"), and are not
directly or indirectly purchasing the Class R Certificate on behalf of, as
investment manager of, as named fiduciary of, as trustee of or with any assets
of a Plan, including but not limited to the assets of any insurance company
separate account or general account containing any "plan assets" or of any
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, the Trustee and
the Trustee with a duly completed and effective Internal Revenue Service Form
W-8ECI or successor form at the time and in the manner required by the Code;
for this purpose the term "U.S. person" means a citizen or resident of the
United States, a corporation, or partnership (unless, in the case of a
partnership, Treasury regulations are adopted that provide otherwise) created
or organized in or under the laws of the United States, any State thereof or
the District of Columbia, including an entity treated as a corporation or
partnership for federal income tax purposes, an estate whose income is subject
to United States federal income tax regardless of the source of its income, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more such U.S.
persons have the authority to control all substantial decisions of the trust
(or, to the extent provided in applicable Treasury regulations, certain trusts
in existence on August 20, 1996 which are eligible to elect to be treated as
U.S. Persons. We agree that any breach by us of this certification shall
render the transfer of any interest in the Class 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, the Trustee and the
Trustee with a duly completed and effective Internal Revenue Service Form
W-8ECI or successor form at the time and in the manner required by the Code
and (iii) has delivered to the Trustee and the Trustee a letter in the form of
this letter (including the affidavit appended hereto) and, we will provide the
Trustee and the Trustee a written statement substantially in the form of
Exhibit E-2 to the Agreement.

                                    E-1-2
<PAGE>
      7._______We hereby designate ___________________ as our fiduciary to act
as the tax matters person for each of the REMICs provided for in the
Agreement.

                                            Very truly yours,

                                            [PURCHASER]

                                            By:_________________________________
                                                Name:
                                                Title:
Accepted as of _________ __, 200_.

MERRILL LYNCH MORTGAGE INVESTORS, INC.

By:________________________________
   Name:
   Title:

                                    E-1-3
<PAGE>
                                  APPENDIX A

                                            Affidavit pursuant to (i) Section
                                            860E(e)(4) of the Internal Revenue
                                            Code of 1986, as amended, and (ii)
                                            certain provisions of the Pooling
                                            and Servicing Agreement

Under penalties of perjury, the undersigned declares that the following is
true:

(1)   He or she is an officer of       (the "Transferee"),

(2)   the Transferee's Employer Identification number is       ,

(3)   the Transferee is not a "disqualified organization" (as defined below),
      has no plan or intention of becoming a disqualified organization, and is
      not acquiring any of its interest in the Specialty Underwriting and
      Residential Finance Trust, Mortgage Loan Asset-Backed Certificates,
      Series 2004-BC2, Class R Certificate on behalf of a disqualified
      organization or any other entity,

(4)   unless Merrill Lynch Mortgage Investors, Inc.("MLMI") has consented to
      the transfer to the Transferee by executing the form of Consent affixed
      as Appendix B to the Transferee's Letter to which this Certificate is
      affixed as Appendix A, the Transferee is a "U.S. person" (as defined
      below),

(5)   that no purpose of the transfer is to avoid or impede the assessment or
      collection of tax,

(6)   the Transferee has historically paid its debts as they became due,

(7)   the Transferee intends, and believes that it will be able, to continue
      to pay its debts as they become due in the future,

(8)   the Transferee understands that, as beneficial owner of the Class R
      Certificate, it may incur tax liabilities in excess of any cash flows
      generated by the Class R Certificate,

(9)   the Transferee intends to pay any taxes associated with holding the
      Class R Certificate as they become due,

(10)  the Transferee consents to any amendment of the Pooling and Servicing
      Agreement that shall be deemed necessary by MLMI (upon advice of
      counsel) to constitute a reasonable arrangement to ensure that the Class
      R Certificate will not be owned directly or indirectly by a disqualified
      organization, and

(11)  IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the
      transfer is not a direct or indirect transfer of the Class R Certificate
      to a foreign permanent establishment or fixed base (within the meaning
      of an applicable income tax treaty) of the Transferee, and as to each of
      the residual interests represented by the Class R Certificate, the
      present value of 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 I
      l(b)(1) of the Code, but the tax rate specified in Section 55(b)(1)(B)
      of the Code may be used in lieu of the highest rate specified in Section
      11(b)(1) of the Code if the Transferee has been subject to the
      alternative minimum tax under Section 55 of the Code in the preceding
      two years and will compute its taxable income in the current taxable
      year using the alternative minimum tax rate, and (ii) present values are
      computed using a discount rate equal to the Federal short-term rate
      prescribed by Section 1274(d) of the Code for the month of the transfer
      and the compounding period used by the Transferee;]

[(11) (A)   at the time of the transfer, and at the close of each of the
            Transferee's two fiscal years preceding the Transferee's fiscal
            year of transfer, the Transferee's gross assets for financial
            reporting purposes exceed $100 million and its net assets for
            financial reporting purposes exceed $10 million; and

      (B)   the Transferee is an eligible corporation as defined in Treasury
            regulations Section 1.860E-1(c)(6)(i) and has agreed in writing
            that any subsequent transfer of the Class 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

             SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST

           MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-BC2

                                    [DATE]

JPMorgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas  75201

Attention:  Institutional Trust Services-Transfer Department - SURF 2004-BC2

      Re:   Specialty Underwriting and Residential Finance Trust, Mortgage
            Loan Asset-Backed Certificates, Series 2004-BC2

            ____________________ (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

JPMorgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas  75201

Attention: Institutional Trust Services-Transfer Department - SURF 2004-BC2

Re:   Specialty Underwriting and Residential Finance Trust, Mortgage Loan
      Asset-Backed Certificates, Series 2004-BC2

Ladies and Gentlemen:

      In connection with our disposition of the Class [C or P] 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, (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 and (c) if we are disposing of a Class C
Certificate, we have no knowledge the Transferee is not a Permitted
Transferee. 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 June 1, 2004, among Merrill Lynch Mortgage, Inc., as depositor,
Litton Loan Servicing LP, as servicer and JPMorgan Chase Bank, as trustee.

                                       Very truly yours,

                                       ___________________________________
                                       Name of Transferor

                                       By:___________________________________
                                       Name:
                                       Title

                                     F-1
<PAGE>
                                   EXHIBIT G

                           FORM OF INVESTMENT LETTER
                            (ACCREDITED INVESTOR)

                                    [DATE]

JPMorgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas  75201

Attention:  Institutional Trust Services-Transfer Department - SURF 2004-BC2

Re:   Specialty Underwriting and Residential Finance Trust, Mortgage Loan
      Asset-Backed Certificates, Series 2004-BC2 [CLASS C OR P]

Ladies and Gentlemen:

            _______________________ (the "Purchaser") intends to purchase from
__________ (the "Transferor") $ ________ by original principal balance (the
"Transferred Certificates") of Mortgage Loan Asset-Backed Certificates, Series
2004-BC2, [CLASS C OR P] (the "Certificates"), issued pursuant to a Pooling and
Servicing Agreement, dated as of June 1, 2004 (the "Pooling and Servicing
Agreement"), among Merrill Lynch Mortgage Investors, Inc., as depositor (the
"Depositor"), Litton Loan Servicing LP, as servicer (the "Servicer") and
JPMorgan Chase Bank, as trustee (the "Trustee"). [THE PURCHASER INTENDS TO
REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF       , AS NOMINEE FOR
      .] All terms used and not otherwise defined herein shall have the meanings
set forth in the Pooling and Servicing Agreement.

      For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:

      1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (1) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement
contains restrictions regarding the transfer of the Certificates.

      2. The Certificates will bear a legend to the following effect:

      THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT,
DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR SALE,
UNLESS SUCH TRANSFER IS NOT SUBJECT TO REGISTRATION UNDER THE ACT, THE 1940
ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES
WITH THE OTHER PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE

                                      G-1
<PAGE>
SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE SERVICER (A) AN
INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B) REPRESENTATIONS FROM
THE TRANSFEROR REGARDING THE OFFERING AND SALE OF THE CERTIFICATES.

NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (A) A REPRESENTATION FROM THE TRANSFEREE EITHER (I) THAT SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF ERISA, A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, A PLAN SUBJECT TO ANY STATE, LOCAL OR
OTHER FEDERAL LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA
AND THE CODE ("SIMILAR LAW"), OR A PERSON DIRECTLY OR INDIRECTLY ACTING ON
BEHALF OF OR USING ANY ASSETS OF ANY SUCH PLAN, OR (II) IF THE CERTIFICATE HAS
BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, THAT SUCH TRANSFEREE IS
AN INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH FUNDS CONTAINED IN
AN "INSURANCE COMPANY GENERAL ACCOUNT," AS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND THE ACQUISITION AND
HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF
PTCE 95-60, OR (B) SOLELY IN THE EVENT THE CERTIFICATE IS A DEFINITIVE
CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE, AND UPON WHICH
THE TRUSTEE AND NIM INSURER 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 OR THE NIM INSURER 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 OR THE NIM INSURER. IF THE CERTIFICATE IS NOT A DEFINITIVE
CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE REPRESENTATION IN
(A)(I) OR (A)(II) ABOVE.

      3. The Purchaser is acquiring the Transferred Certificates for its own
account [FOR INVESTMENT ONLY]**/ and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates
in any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition
of the Purchaser's property shall at all times be and remain within its
control.

      4. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business
matters, and in particular in such matters related to securities similar to
the Certificates, such that it is capable of evaluating the merits and risks
of investment in the Certificates, (b) is able to bear the economic risks of
such an investment and (c) is an "accredited investor" within the meaning of
Rule 501 (a) promulgated pursuant to the Securities Act.

      5. The Purchaser will not nor has it authorized nor will it authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition

---------
**/      Not required of a broker/dealer purchaser.

                                     G-2
<PAGE>
or other transfer of any Certificate, any interest in any Certificate or any
other similar security from any person in any manner, (c) otherwise approach
or negotiate with respect to any Certificate, any interest in any Certificate
or any other similar security with any person in any manner, (d) make any
general solicitation by means of general advertising or in any other manner,
or (e) take any other action, that would constitute a distribution of any
Certificate under the Securities Act or the Investment Company Act of 1940, as
amended (the "1940 Act"), that would render the disposition of any Certificate
a violation of Section 5 of the Securities Act or any state securities law, or
that would require registration or qualification pursuant thereto. Neither the
Purchaser nor anyone acting on its behalf has offered the Certificates for
sale or made any general solicitation by means of general advertising or in
any other manner with respect to the Certificates. The Purchaser will not sell
or otherwise transfer any of the Certificates, except in compliance with the
provisions of the Pooling and Servicing Agreement.

      6. The Purchaser either (A) (i) is not an employee benefit plan subject
to Title I of ERISA, a plan subject to Section 4975 of the Code, a plan
subject to any state, local or other federal law substantively similar to the
foregoing provisions of ERISA and the Code ("Similar Law"), or a Person
directly or indirectly acting on behalf of or using any assets of any such
plan, or (ii) if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, is an insurance company that is acquiring the Certificate with
funds contained in an "insurance company general account," as defined in
Section V(e) of Prohibited Transaction Class Exemption ("PTCE") 95-60, and the
acquisition and holding of the Certificate are covered and exempt under
Sections I and III of PTCE 95-60, or (B) solely in the event the Certificate
is a Definitive Certificate, herewith delivers an Opinion of Counsel
satisfactory to the Trustee, and upon which the Trustee and NIM Insurer 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 or the NIM Insurer 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 or the NIM Insurer.

      7. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and
covenants contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit [H] to the Pooling and Servicing
Agreement.

                                     G-3
<PAGE>
      8. The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation
made herein.

                                        Very truly yours,

                                        [PURCHASER]

                                        By:_____________________________________
                                           Name:
                                           Title:

                                     G-4
<PAGE>
                                   EXHIBIT H

                      FORM OF RULE 144A INVESTMENT LETTER
                       (QUALIFIED INSTITUTIONAL BUYER)

                                    [DATE]

JP Morgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas  75201
Attention:  Institutional Trust Services-Transfer Department - SURF 2004-BC2

Re:   Specialty Underwriting and Residential Finance Trust, Mortgage Loan
      Asset-Backed Certificates, Series 2004-BC2 [CLASS C OR P]

Ladies and Gentlemen:

            ___________________________ (the "Purchaser") intends to purchase
from ______________ (the "Transferor") $_______ by original principal balance
(the "Transferred Certificates") of Mortgage Loan Asset-Backed Certificates,
Series 2004-BC2, [CLASS C OR P] (the "Certificates"), issued pursuant to a
Pooling and Servicing Agreement, dated as of June 1, 2004 (the "Pooling and
Servicing Agreement'), among Merrill Lynch Mortgage Investors, Inc., as
depositor (the "Depositor"), Litton Loan Servicing LP, as servicer (the
"Servicer"), and JPMorgan Chase Bank, as trustee (the "Trustee"). [THE PURCHASER
INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF        AS NOMINEE
FOR       .] All terms used and not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.

      For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:

      In connection with our acquisition of the above Transferred Certificates
we certify that (a) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act'), or any
state securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Transferred
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Transferred Certificates, (d)
we either (A) (i) are not an employee benefit plan subject to Title I of
ERISA, a plan subject to Section 4975 of the Code, a plan subject to any
state, local or other federal law substantively similar to the foregoing
provisions of ERISA and the Code ("Similar Law"), or Persons directly or
indirectly acting on behalf of or using any assets of any such plan, or (ii)
if the Certificate has been the subject of an ERISA-Qualifying Underwriting,
are an insurance company that is acquiring the Certificate with funds
contained in an "insurance company general account," as defined in Section
V(e) of Prohibited Transaction Class Exemption ("PTCE") 95-60, and the
acquisition and holding of the Certificate are covered and exempt under
Sections I and III of PTCE 95-60, or (B) solely in the event the Certificate
is a Definitive Certificate, herewith deliver an Opinion of Counsel
satisfactory to the Trustee, and upon which the Trustee and NIM Insurer shall
be entitled to rely, to the effect that the acquisition and holding of the

                                     H-1
<PAGE>
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 or the NIM Insurer 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 or the NIM Insurer,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy
or accept a transfer, pledge or other disposition of the Certificates, any
interest in the Certificates or any other similar security from, or otherwise
approached or negotiated with respect to the Certificates, any interest in the
Certificates or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Certificates under the Securities Act or that would render the disposition of
the Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
(f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed one of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale of the Transferred Certificates to us is being made in
reliance on Rule 144A. We are acquiring the Transferred Certificates for our
own account or for resale pursuant to Rule 144A and further understand that
such Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed by us, based upon certifications of such purchaser or
information we have in our possession, to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.

      We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.

                                            Very truly yours,

                                            [PURCHASER]

                                            By:_______________________________
                                                  Name:
                                                  Title:

                                     H-2
<PAGE>
                                                                       ANNEX 1

           QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

         [FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]

      The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

      1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.

      2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________* in securities (except
for the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Buyer satisfies the criteria in the category marked below.

            ___   Corporation, etc. The Buyer is a corporation (other than a
                  bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or
                  charitable organization described in Section 501(c)(3) of
                  the Internal Revenue Code of 1986, as amended.

            ___   Bank. The Buyer (a) is a national bank or banking
                  institution organized under the laws of any State, territory
                  or the District of Columbia, the business of which is
                  substantially confined to banking and is supervised by
                  Federal, State or territorial banking commission or similar
                  official or is a foreign bank or equivalent institution, and
                  (b) has an audited net worth of at least $25,000,000 as
                  demonstrated in its latest annual financial statements, a
                  copy of which is attached hereto.

            ___   Savings and Loan. The Buyer (a) is a savings and loan
                  association, building and loan association, cooperative
                  bank, homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority
                  having supervision over such institution or is a foreign
                  savings and loan association or equivalent institution and
                  (b) has an audited net worth of at least $25,000,000 as
                  demonstrated in its latest annual financial statements, a
                  copy of which is attached hereto.

            ___   Broker-dealer. The Buyer is a dealer registered pursuant to
                  Section 15 of the Securities Exchange Act of 1934, as
                  amended.

            ___   Insurance Company. The Buyer is an insurance company whose
                  primary and predominant business activity is the writing of
                  insurance or the reinsuring of risks underwritten by
                  insurance companies and which is subject to supervision by
                  the insurance commissioner or a similar official

---------
* 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>
or agency of the State, territory or the District of Columbia.

            ___   State or Local Plan. The Buyer is a plan established and
                  maintained by a State, its political subdivisions, or any
                  agency or instrumentality of the State or its political
                  subdivisions, for the benefit of its employees.

            ___   ERISA Plan. The Buyer is an employee benefit plan subject to
                  Title I of the Employee Retirement Income Security Act of
                  1974, as amended.

            ___   Investment Advisor. The Buyer is an investment advisor
                  registered under the Investment Advisors Act of 1940, as
                  amended.

            ___   Small Business Investment Company. Buyer is a small business
                  investment company licensed by the U.S. Small Business
                  Administration under Section 301 (c) or (d) of the Small
                  Business Investment Act of 1958, as amended.

            ___   Business Development Company. Buyer is a business
                  development company as defined in Section 202(a)(22) of the
                  Investment Advisors Act of 1940, as amended.

      3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold
allotment to or subscription by the Buyer, if the Buyer is a dealer, (iii)
securities issued or guaranteed by the U.S. or any instrumentality thereof,
(iv) bank deposit notes and certificates of deposit, (v) loan participations,
(vi) repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.

      4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and
the Buyer is not itself a reporting company under the Securities Exchange Act
of 1934, as amended.

      5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.

                                     H-4
<PAGE>
      6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the Buyer
is a bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after
they become available.

                                            By:_________________________________
                                                 Name:
                                                 Title:

                                     H-5
<PAGE>
                                                                       ANNEX 2

           QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]

      The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

      1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.

      2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used, except (1) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current information
with respect to the cost of those securities has been published. If clause
(ii) in the preceding sentence applies, the securities may be valued at
market.

            ___   The Buyer owned $ securities (other than the excluded
                  securities referred to below) as of the end of the Buyer's
                  most recent fiscal year (such amount being calculated in
                  accordance with Rule 144A).

            ___   The Buyer is part of a Family of Investment Companies which
                  owned in the aggregate $_______ in securities (other than
                  the excluded securities referred to below) as of the end of
                  the Buyer's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

      3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

      4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed by the
U.S. or any instrumentality thereof, (iii) bank deposit notes and certificates
of deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

      5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.

                                     H-6
<PAGE>
      6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.

                                            By:_________________________________
                                                  Name:
                                                  Title:

                                            IF AN ADVISER:

                                            ____________________________________
                                            Print Name of Buyer

                                            Date:_______________________________

                                     H-7
<PAGE>
                                   EXHIBIT I

                       REQUEST FOR RELEASE OF DOCUMENTS

To:   JPMorgan Chase Bank
      2001 Bryan Street
      8th Floor
      Dallas, Texas  75201
      Attention:  Institutional Trust Services-Transfer Department - SURF
                  2004-BC2

Re:   Pooling and Servicing Agreement dated as of June 1, 2004 among Merrill
      Lynch Mortgage Investors, Inc., as depositor, Litton Loan Servicing LP,
      as servicer and JPMorgan Chase Bank, as trustee, relating to Specialty
      Underwriting and Residential Finance Trust, Mortgage Loan Asset-Backed
      Certificates, Series 2004-BC2

      In connection with the administration of the Mortgage Loans held by you,
as Trustee, pursuant to the above-captioned Pooling and Servicing Agreement,
we request the release, and hereby acknowledge receipt, of the Mortgage File
for the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_______1. Mortgage Paid in Full

_______2. Foreclosure

_______3. Substitution

_______4. Other Liquidation (Repurchases, etc.)

_______5. Nonliquidation

_______6. Other Reason:

Address to which the Trustee should deliver the Mortgage File:

                                            By:_________________________________
                                                     (authorized signer)

                                            Address:____________________________

                                            Date:_______________________________

                                     I-1
<PAGE>
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to
the above specified Mortgage Loan.

If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.

Trustee

JPMorgan Chase Bank

Please acknowledge the execution of the above request by your signature and
date below:

____________________________________________       _____________________________
Signature                                          Date

Documents returned to Trustee:

____________________________________________       _____________________________
Trustee                                                        Date

                                     I-2
<PAGE>
                                   EXHIBIT J

                           FORM OF POWER OF ATTORNEY

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
LITTON LOAN SERVICING LP
4828 Loop Central Drive
Houston, Texas 77081
Attn: _________________________________

                           LIMITED POWER OF ATTORNEY

      KNOW ALL MEN BY THESE PRESENTS, that JPMorgan Chase Bank, having its
principal place of business at Four New York Plaza, 6th Floor, New York, New
York 10004, as Trustee (the "Trustee") pursuant to that Pooling and Servicing
Agreement among Merrill Lynch Mortgage Investors, Inc. (the "Depositor"),
Litton Loan Servicing LP (the "Servicer"), and the Trustee, dated as of June
1, 2004 (the "Pooling and Servicing Agreement"), hereby constitutes and
appoints the Servicer, by and through the Servicer's officers, the Trustee's
true and lawful Attorney-in-Fact, in the Trustee's name, place and stead and
for the Trustee's benefit, in connection with all mortgage loans serviced by
the Servicer pursuant to the Pooling and Servicing Agreement for the purpose
of performing all acts and executing all documents in the name of the Trustee
as may be customarily and reasonably necessary and appropriate to effectuate
the following enumerated transactions in respect of any of the mortgages or
deeds of trust (the "Mortgages" and the "Deeds of Trust", respectively) and
promissory notes secured thereby (the "Mortgage Notes") for which the
undersigned is acting as Trustee for various certificateholders (whether the
undersigned is named therein as mortgagee or beneficiary or has become
mortgagee by virtue of endorsement of the Mortgage Note secured by any such
Mortgage or Deed of Trust) and for which the Servicer is acting as servicer,
all subject to the terms of the Pooling and Servicing Agreement.

This appointment shall apply to the following enumerated transactions only:

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 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, JPMorgan Chase Bank as Trustee pursuant to that
Pooling and Servicing Agreement among the Depositor, the Servicer, and the
Trustee, dated as of June 1, 2004 (Specialty Underwriting and Residential
Finance Trust, Mortgage Loan Asset-Backed Certificates, Series 2004-BC2), has
caused its corporate seal to be hereto affixed and these presents to be signed
and acknowledged in its name and behalf by       its duly elected and authorized
____________ this     day of       ,200__.

                                            JPMORGAN CHASE BANK,

                                            as Trustee for Specialty
                                            Underwriting and Residential
                                            Finance Trust, Mortgage Loan
                                            Asset-Backed Certificates, Series
                                            2004-BC2

                                            By _________________________________
                                               Name:
                                               Title:

STATE OF_________

COUNTY OF_________

      On __________,____________ 200__, before me, the undersigned, a Notary
Public in and for said state, personally appeared , _______________ of
JPMorgan Chase Bank as Trustee for Specialty Underwriting and Residential
Finance Trust, Mortgage Loan Asset-Backed Certificates, Series 2004-BC2,
personally known to me to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed that same in his/her
authorized capacity, and that by his/her signature on the instrument the
entity upon behalf of which the person acted and executed the instrument.

WITNESS my hand and official seal.

         (SEAL)

____________________________________________
Notary Public

My Commission Expires ________________________

                                     J-3
<PAGE>
                                   EXHIBIT K

                       OFFICER'S CERTIFICATE OF TRUSTEE

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor

New York, New York  10080

Re:   Pooling and Servicing Agreement (the "Agreement") dated as of June 1,
      2004 among Merrill Lynch Mortgage Investors, Inc., as depositor, Litton
      Loan Servicing LP, as servicer and JPMorgan Chase Bank, as trustee,
      relating to Specialty Underwriting and Residential Finance Trust,
      Mortgage Loan Asset-Backed Certificates, Series 2004-BC2

The Trustee hereby certifies to the Depositor, and its officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:

1.    The Trustee has reviewed the Monthly Statements delivered pursuant to
      the Agreement since the last Officer's Certificate executed pursuant to
      Section 4.02 of the Agreement [or in the case of the first
      certification, since the Cut-off Date] (the "Trustee Information");

2.    Based on the Trustee's knowledge, the information in the Monthly
      Statement, taken as a whole, does not contain any untrue statement of a
      material fact or omit to state a material fact required by the Agreement
      to be included therein and necessary to make the statements made, in
      light of the circumstances under which such statements were made, not
      misleading as of the date hereof; and

3.    Based on the Trustee's knowledge, the Monthly Statements required to be
      prepared by the Trustee under the Agreement has been prepared and
      provided in accordance with the Agreement.

Date:

                                               JPMorgan Chase Bank, as Trustee
                                               By:______________________________
                                               Name:____________________________
                                               Title:___________________________

                                     K-1
<PAGE>
                                   EXHIBIT L

                       OFFICER'S CERTIFICATE OF SERVICER

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York  10080

JPMorgan Chase Bank
2001 Bryan Street
8th Floor
Dallas, Texas 75201

Attention:  Institutional Trust Services-Transfer Department - SURF 2004-BC2

Re:   Specialty Underwriting and Residential Finance Trust, Mortgage Loan
      Asset-Backed Certificates, Series 2004-BC2

Reference is made to the Pooling and Servicing Agreement, dated as of June 1,
2004 (the "Agreement"), by and among Merrill Lynch Mortgage Investors, Inc.,
as depositor, Litton Loan Servicing LP, as servicer (the "Servicer") and
JPMorgan Chase Bank, as trustee. The Servicer hereby certifies to the Trustee
and the Depositor, and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:

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

2.    Based on the Servicer's knowledge, the information in the Annual
      Statement of Compliance, and all servicing reports, officer's
      certificates and other information relating to the servicing of the
      Mortgage Loans submitted to the Trustee by the Servicer taken as a
      whole, does not contain any untrue statement of a material fact or omit
      to state a material fact necessary to make the statements made, in light
      of the circumstances under which such statements were made, not
      misleading as of the last day of the period covered by the Annual
      Statement of Compliance;

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

                                     L-2
<PAGE>
4.    Based upon the review required under this Agreement, and except as
      disclosed in the Annual Statement of Compliance, the Annual Independent
      Certified Public Accountant's Servicing Report and all servicing
      reports, officer's certificates and other information relating to the
      servicing of the Mortgage Loans submitted to the Trustee by the
      Servicer, the Servicer has, as of the last day of the period covered by
      the Annual Statement of Compliance fulfilled its obligations under this
      Agreement.

Date:
                                           Litton Loan Servicing LP, as Servicer

                                           By:  ________________________________

                                           Name:  ______________________________

                                           Title:  _____________________________

                                     L-3
<PAGE>
                                   EXHIBIT M

                              TRANSFEREE'S LETTER

JPMorgan Chase Bank
4 New York Plaza
6th Floor
New York, New York  10004
Attention:  Institutional Trust Services/Structured Finance Services

Re:   Specialty Underwriting and Residential Finance Trust, Mortgage Loan
      Asset-Backed Certificates, Series 2004-BC2: Class C Certificates

      The undersigned represents to the Trustee that (i) it is a United States
person (as such term is defined for purposes of Section 7701 of the Code),
(ii) it is not a Disqualified Organization, (iii) it is not acquiring an
interest in a Class C Certificate on behalf of a Person that is (x) not a
United States person (as defined for purposes of Section 7701 of the Code) or
(y) a Disqualified Organization, (iv) it will not Transfer an interest in a
Class C Certificate to any Person unless such Person provides it and the
Trustee with a Transferee Letter in the form of this letter. and (v) it is
not, for United States federal income tax purposes, an entity whose separate
existence from its owners is disregarded, or, if it is so treated, each of the
representations made in clauses (i) through (iv) would be true if made with
respect to each person that is treated as the owner of the undersigned for
United States federal income tax purposes.

                                            By:  _______________________________

                                            Name:  _____________________________

                                            Title:  ____________________________

                                     M-1
<PAGE>
                                   EXHIBIT N

                              AUCTION PROCEDURES

      The following sets forth the auction procedures to be followed in
connection with Pooling and Servicing Agreement (the "Agreement") among
Merrill Lynch Mortgage Investors, Inc., JPMorgan Chase Bank, as trustee and
Litton Loan Servicing, LP, dated June 1, 2004. Capitalized terms used herein
that are not otherwise defined shall have the meanings described thereto in
the Agreement.

1.    Upon notice to the Servicer by the Trustee of the initiation of the
      auction, the Servicer will initiate the general auction procedures
      consisting of the following: (i) prepare a general solicitation package
      along with a confidentiality agreement; (ii) derive a list of a minimum
      of three (3) bidders, each of whom shall be a nationally recognized
      participant in mortgage finance, (iii) initiate contact with all
      bidders, (iv) send a confidentiality agreement to all bidders, and (v)
      upon receipt of a signed confidentiality agreement, send bid
      solicitation package to all bidders.

2.    The general solicitation package will include (i) the Agreement; (ii) a
      copy of all monthly trustee reports or electronic access thereto; (iii)
      a form of a Mortgage Loan Purchase Agreement acceptable to the Trustee
      and Servicer (the Mortgage Loans and other property included in the
      Trust Fund will be offered and sold on an "as is, where is basis,
      without any representation or warranty, expressed or implied, of any
      kind and without recourse to, or guaranty by, the Trustee); (iv) a
      description of the minimum price as set forth in the Agreement; (v) a
      formal bidsheet as determined by the Servicer and accepted by the
      Trustee; (vi) a detailed timetable (which shall include, but not be
      limited to, the provisions and dates preliminary bids, due diligence and
      final bids); and (vii) a data tape of the Mortgage Loans as of the
      related Remittance Period reflecting substantially the same data
      attributes used in the Prospectus Supplement dated June 22, 2004.

3.    A detailed timetable will be determined approximately ten (10) days
      prior to each auction sale and shall be determined by the Servicer with
      the consent of the Trustee, which consent shall not be unreasonably
      withheld, within reasonable market conditions at the time of the auction
      sale.

4.    All bids will be submitted directly to the Trustee. Upon acceptance of a
      bid which meets or exceeds the conditions set forth in Section 9.01, the
      Trustee will distribute the proceeds from the auction to the holders of
      the Certificates on the next succeeding Distribution Date as set forth
      in the Agreement. In the event the Trustee receives two (2) or more bids
      from bidders above the Auction Termination Price and at equal bids (a
      "Tie Event"), the Trustee shall notify such bidders to resubmit a bid to
      break the Tie Event.

5.    Upon determination that the minimum price was not met, the Trustee shall
      cancel such auction sale and notify the Servicer, Depositor and NIM
      Insurer 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

                             FORM OF CAP CONTRACT

                            [Intentionally Omitted]

                                     O-1

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