Financial Asset Securitization Inc – ‘8-K’ for 10/30/97 – EX-4

As of:  Wednesday, 11/5/97   ·   For:  10/30/97   ·   Accession #:  916641-97-1043   ·   File #:  0-15483

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Fasi 8-K                                               5     15K 
 2: EX-1        Exhibit 1.1                                           25    105K 
 3: EX-4        Exhibit 4.1                                           58    213K 

EX-4   —   Exhibit 4.1
Exhibit Table of Contents

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                                                           EXHIBIT 4.1

FINANCIAL ASSET SECURITIZATION, INC., 

Seller

and 

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, 

Trustee 

POOLING AGREEMENT 
Dated as of October 1, 1997 

$55,809,878 

Financial Asset Securitization, Inc.
Mortgage Participation Securities 
Series 1997-1 

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TABLE OF CONTENTS 

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ARTICLE I -- DEFINITIONS..........................................................................................2
         Section 1.01. Defined Terms..............................................................................2
ARTICLE II -- CONVEYANCE OF THE POOLED SECURITIES AND TREASURY SECURITIES; ORIGINAL ISSUANCE OF SECURITIES.......14
         Section 2.01. Conveyance of the Pooled Certificates.....................................................14
         Section 2.02. Acceptance of Trust Fund by Trustee; Initial Issuance of Securities.......................15
         Section 2.03. Representations and Warranties of the Seller and the Trustee..............................16
         Section 2.04.  Substitution of Pooled Certificates......................................................19
ARTICLE III -- ADMINISTRATION OF THE POOLED CERTIFICATES AND TREASURY SECURITIES; PAYMENTS AND REPORTS TO          
         SECURITYHOLDERS.........................................................................................21
         Section 3.01. Administration of the Trust Fund and the Pooled Certificates..............................21
         Section 3.02. Collection of Monies......................................................................21
         Section 3.03.  Establishment of  Asset Proceeds and Trustee Fee Accounts; Deposits Therein..............22
         Section 3.04. Permitted Withdrawals From the Asset Proceeds Account.....................................23
         Section 3.05. Distributions.............................................................................24
         Section 3.06. Statements to Securityholders.............................................................25
         Section 3.07. Access to Certain Documentation and Information...........................................27
ARTICLE IV -- THE SECURITIES.....................................................................................27
         Section 4.01. The Securities............................................................................27
         Section 4.02. Registration of Transfer and Exchange of Securities.......................................29
         Section 4.03. Mutilated, Destroyed, Lost or Stolen Securities...........................................30
         Section 4.04. Persons Deemed Owners.....................................................................31
         Section 4.05.  Exchange of Securities...................................................................31
ARTICLE V -- THE TRUSTEE.........................................................................................32
         Section 5.01. Duties of Trustee.........................................................................32
         Section 5.02. Certain Matters Affecting the Trustee.....................................................33
         Section 5.03. Trustee Not Liable for Securities or Pooled Certificates or Treasury Securities...........34
         Section 5.04. Trustee May Own Securities................................................................34
         Section 5.05. Trustee's Fees; Indemnification of the Trustee............................................35
         Section 5.06. Eligibility Requirements for Trustee......................................................35
         Section 5.07. Resignation and Removal of the Trustee....................................................36
         Section 5.08. Successor Trustee.........................................................................37
         Section 5.09. Merger or Consolidation of Trustee........................................................37
         Section 5.10. Appointment of Co-Trustee or Separate Trustee.............................................38
ARTICLE VI -- THE DEPOSITOR......................................................................................39
         Section 6.01. Liability of the Seller...................................................................39
         Section 6.02. Merger, Consolidation or Conversion of the Seller.........................................39
         Section 6.03. Limitation on Liability of the Seller and Others..........................................39
ARTICLE VII -- TERMINATION.......................................................................................40
         Section 7.01. Termination...............................................................................40
ARTICLE VIII  -- TAX PROVISIONS..................................................................................42
         Section 8.01 Trust Administration.......................................................................42
         Section 8.02 Prohibited Activities......................................................................43
ARTICLE IX -- MISCELLANEOUS PROVISIONS...........................................................................43


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Section 9.01. Amendment.................................................................................43
Section 9.02. Counterparts..............................................................................45
Section 9.03. Limitation on Rights of Securityholders...................................................45
Section 9.04. Governing Law.............................................................................45
Section 9.05. Notices...................................................................................46
Section 9.06. Severability of Provisions................................................................46
Section 9.07. Successors and Assigns....................................................................46
Section 9.08. Article and Section Headings..............................................................46
Section 9.09. Notices to Rating Agencies................................................................46


Exhibit A -      Form of Class A-1 Security                                     
Exhibit B -      Form of Option Exercise Notice                                 
Schedule A -     Pooled Certificates                                            

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                  POOLING AGREEMENT, dated as of October 1, 1997, by and between
Financial Asset Securitization, Inc., as depositor (the "Seller"), and Norwest  
Bank Minnesota, National Association, as trustee (the "Trustee").               

PRELIMINARY STATEMENT 

               The Seller intends to cause the issuance of and to sell its
Mortgage Participation Securities, Series 1997-1 representing in the aggregate  
the entire beneficial ownership of a trust fund (the "Trust Fund"), the primary 
assets of which are the Pooled Certificates (defined herein) and the Treasury   
Securities (defined herein).                                                    

       All things necessary to make this Agreement a valid
declaration of trust by the Seller in accordance with its terms have been done. 

              In consideration of the premises and the mutual agreements
herein contained, the Seller and the Trustee agree as follows:                  

ARTICLE I 

DEFINITIONS 

Section 1.01.     Defined Terms             

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

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

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

                Asset Proceeds Account: The trust account or accounts, which
shall at all times be Eligible Accounts, created and maintained by the Trustee  
for the benefit of the Securityholders pursuant to Section 3.03. Funds deposited
in the Asset Proceeds Account shall be held in trust for the Securityholders for
the uses and purposes set forth in Article III hereof.                          

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         Available Funds: As of any date of determination, the
aggregate amount on deposit in the Asset Proceeds Account as of such date, net  
of any portion thereof which represents amounts to be paid to any Person        
pursuant to clauses (ii) and (iv) of Section 3.04.                              

                  Business Day: Any day other than a Saturday, a Sunday or a day
on which banking institutions in New York or in the city in which the Corporate 
Trust Office of the Trustee is located are authorized or obligated by law or    
executive order to close.                                                       

                Class:  Collectively, all of the Securities bearing the same
designation.                                                                    

                  Class A-1 Balance: The aggregate principal amount of Class A-1
Securities outstanding as of any date of determination, which is equal to the   
Original Class A-1 Balance minus all amounts received as principal on the Pooled
Certificates and Treasury Securities plus all amounts of accreted interest added
to the outstanding principal balance of the Z Certificates. If, on any          
Distribution Date, the amount by which the Z Certificates have accreted exceeds 
the aggregate distributions of principal on the other Pooled Certificates, the  
Class A-1 Balance will be increased by the amount of such excess.               

               Class A-1 Security: Any one of the Class A-1 Securities, as
executed hereunder by the Trustee and authenticated and delivered hereunder by  
the Security Registrar, substantially in the form of Exhibit A hereto.          

Closing Date:  October 30, 1997.            

         Code:  The Internal Revenue Code of 1986, as amended.

              Corporate Trust Office:  The corporate trust office of the
Trustee at which at any particular time its corporate trust business with       
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at Sixth & Marquette Streets,            
Minneapolis, Minnesota 55479, Attention:  FASI 1997-1 telephone no. (410)       
884-2000, facsimile no. (410) 884-2360.                                         

            Definitive Securities:  The meaning specified in Section
4.01(b) hereof.                                                                 

                 Deleted Pooled Certificate:  A Pooled Certificate replaced by
a Substitute Pooled Certificate.                                                

                 Deleted Treasury Security:  A Treasury Security replaced by a
Substitute Treasury Security.                                                   

                Depository:  DTC, the nominee of which is Cede & Co., or any
successor thereto.                                                              

              Depository Agreement:  The meaning specified in Subsection
4.01(a) hereof.                                                                 

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

          Determination Time:  Noon, Eastern Standard Time, on a
Distribution Date.                                                              

      Distribution Date:  With respect to any month, the
Distribution Date shall be the 25th day of such month or, if such day is not a  
Business Day, then the next succeeding Business Day.  The first Distribution    
Date shall occur on November 25, 1997.                                          

DTC:  The Depository Trust Company.         

             Eligible Account: Any of (i) an account maintained with a
federal or state chartered depository institution or trust company, the         
short-term unsecured debt obligations of which are rated at least P-1 by Moody's
and A-1+ by S&P (or comparable ratings if Moody's and S&P are not the Rating    
Agencies) at any time funds are on deposit therein, (ii) a trust account or     
accounts maintained with the trust department of a federally chartered          
depository institution or trust company acting in its fiduciary capacity, or    
(iii) a trust account or accounts maintained with the trust department of a     
state chartered depository institution or trust company acting in its fiduciary 
capacity and subject to regulations regarding fiduciary funds on deposit therein
substantially similar to 12 CFR ss. 9.10(b).                                    

                ERISA:  The Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.               

          Escrow Amount:  With respect to any Distribution Date,
one-twelfth of the product of 0.0025% and the Class A-1 Balance immediately     
prior to such Distribution Date.                                                

                  Exchange Date:  A date on which Securities are exchanged for a
pro rata portion of the Pooled Certificates and Treasury Securities pursuant to 
Section 4.05.                                                                   

       FHLMC:  The Federal Home Loan Mortgage Corporation.

               FHLMC Pooled Certificate Distribution Date: With respect to
each of the Pooled FHLMC Certificates, the 15th day of each month or, if any    
such day is not a business day as defined in the applicable Underlying          
Agreement, the next succeeding business day as so defined.                      

       Final Distribution Date: With respect to the Pooled
Certificates, the Treasury Securities or the Securities, as applicable, the     
Pooled Certificate Distribution Date, Treasury Security Distribution Date or the
Distribution Date, as applicable, on which the final distribution thereon is to 
be made in accordance with the related Underlying Agreement, the terms of the   
Treasury Securities or this Agreement, as the case may be.                      

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              Fitch:  Fitch Investors Service, L.P., or its successor in
interest.                                                                       

     FNMA:  The Federal National Mortgage Association.

              FNMA Pooled Certificate Distribution Date: With respect to
each of the Pooled FNMA Certificates, the 25th day of each month or, if any such
day is not a business day as defined in the applicable Underlying Agreement, the
next succeeding business day as so defined.                                     

                Independent: When used with respect to any specified Person,
such a Person who (i) is in fact independent of the Seller and any Affiliate of 
the Seller, (ii) does not have any direct financial interest in the Seller or in
any Affiliate of the Seller, and (iii) is not connected with the Seller or any  
Affiliate of the Seller as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.                       

               Interest Accrual Period:  The one month period beginning on
the first day and ending on the last day of the month preceding the month of a  
Distribution Date.                                                              

                Investment Company Act:  The Investment Company Act of 1940,
as amended from time to time, and the rules and regulations promulgated         
thereunder.                                                                     

             LIBOR:  London interbank offered quotations for one month
Eurodollar deposits.                                                            

        Majority Securityholders:  The Holders of Securities
evidencing in the aggregate greater than 50% of the aggregate Class A-1 Balance 
of all the Securities.                                                          

                 Monthly Distribution Amount: With respect to any Distribution
Date, the aggregate of (i) the interest distribution amount for such            
Distribution Date, and (ii) the principal distribution amount for such          
Distribution Date.                                                              

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

            Notice of Final Distribution: With respect to the Pooled
Certificates, any notice provided pursuant to the related Underlying Agreement  
to the effect that final distribution on a Pooled Certificate shall be made only
upon presentment and surrender thereof. With respect to the Securities, the     
notice to be provided pursuant to Section 7.01(b) to the effect that final      
distribution on the Securities shall be made only upon presentment and surrender
thereof.                                                                        

                  Officers' Certificate: A certificate signed by the Chairman of
the Board, the President, a Senior Vice President, a Vice President or an       
Assistant Vice President and by the Treasurer, the Secretary, an Assistant      
Treasurer or an Assistant Secretary of the Seller or the Trustee, as required by
this Agreement.                                                                 

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                Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Seller, which opinion is addressed to the Trustee and is        
reasonably acceptable to the Trustee.                                           

Original Class A-1 Balance:  $55,809,878    

               Option Exercise Fee:  The fee set forth in Section 4.05(c).

                  Option Exercise Notice: A notice, substantially in the form of
Exhibit B, delivered by a Holder or Security Owner holding not less than 10% of 
the outstanding principal amount of the Securities.                             

                  Percentage Interest: With respect to any Security, the portion
of the Class represented by such Security, expressed as a percentage, the       
numerator of which is the initial outstanding principal amount of such Security 
as of the Closing Date, as specified on the face thereof, and the denominator of
which is the Original Class A-1 Balance.                                        

           Permitted Investments: Any one or more of the following
obligations or  securities:                                                     

                     (i) direct obligations of, or obligations fully
                      guaranteed as to timely payment of principal and
                     interest by, the United States or any agency or
                        instrumentality thereof, provided such obligations
                           are backed by the full faith and credit of the United
States;                   

                       (ii) demand and time deposits in, certificates of
                           deposit of, or bankers' acceptances (which shall each
                        have an original maturity of not more than 90 days
                           and, in the case of bankers' acceptances, shall in no
                           event have an original maturity of more than 365 days
                   or a remaining maturity of more than 30 days)
                         denominated in United States dollars issued by, any
                        depository institution or trust company (including
                        the Trustee or any agent of the Trustee, acting in
                        its respective commercial capacities) incorporated
                           under the laws of the United States of America or any
                  state thereof and subject to supervision and
                 examination by federal and/or state banking
                 authorities, so long as at the time of such
                        investment or contractual commitment providing for
                   such investment the commercial paper or other
                    short-term debt obligations of such depository
                        institution or trust company (or, in the case of a
                   depository institution which is the principal
                           subsidiary of a holding company, the commercial paper
                          or other short-term debt obligations of such holding
                          company) have a credit rating of "A-1+" and P-1 from
    S&P and Moody's, respectively;

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                      (iii) repurchase obligations with respect to any
                       security described in clause (i) above where such
                           security has a remaining maturity of one year or less
                           and where such repurchase obligation has been entered
                         into with a depository institution or trust company
                           (acting as principal) described in clause (ii) above;

                   (iv) securities bearing interest or sold at a
                           discount issued by any corporation incorporated under
                           the laws of the United States of America or any state
                           thereof which securities are rated "AAA" and "Aaa" by
                        S&P and Moody's, respectively, at the time of such
                        investment or contractual commitment providing for
                         such investment; provided, however, that securities
                      issued by any particular corporation will not be
                         Permitted Investments to the extent that investment
                       therein will cause the then outstanding principal
                         amount of securities issued by such corporation and
                         held as part of the Trust Fund to exceed 10% of the
                           sum of the aggregate outstanding principal balance of
                         all Pooled Certificates and the aggregate principal
                      amount of all Permitted Investments in the Asset
Proceeds Account;         

                         (v) commercial paper (having original maturities of
                not more than 365 days) of any corporation
                         incorporated under the laws of the United States or
                        any state thereof which on the date of acquisition
                         has been rated by each Rating Agency in its highest
                     short-term rating available, provided that such
                         commercial paper shall have a remaining maturity of
not more than 30 days;    

                          (vi) certificates or receipts representing ownership
                           interests in future principal payments on obligations
                        of the United States of America or its agencies or
                        instrumentalities (which obligations are backed by
                       the full faith and credit of the United States of
                           America) held by a custodian on behalf of the holders
of such receipts; and     

                         (vii) money market funds which are rated by Moody's
                        at the time at which the investment is made in its
                       highest long-term rating category, any such money
                       market funds which provide for demand withdrawals
                       being conclusively deemed to satisfy any maturity
                         requirements for Permitted Investments set forth in
                         the Certificates or this Agreement, including money
                         market funds of the Trustee and any such funds that
                         are managed by the Trustee or its affiliates or for
                        which the Trustee or any affiliate acts as advisor
                        (as long as such funds otherwise meet the criteria
      described in this clause (vii));

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provided, however, that no instrument shall be a Permitted Investment if it     
represents, either (1) the right to receive only interest payments with respect 
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the   
principal payments with respect to such instrument provide a yield to maturity  
greater than 120% of the yield to maturity at par of such underlying            
obligations.                                                                    

             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.                                                                        

              Plan: Any employee benefit plan or retirement arrangement,
including individual retirement accounts and annuities, Keogh plans and         
collective investment funds in which such plans, accounts, annuities or         
arrangements are invested, that are described in or subject to the Plan Asset   
Regulations, ERISA or corresponding provisions of the Code.                     

                Plan Asset Regulations:  The Department of Labor regulations
set forth in 29 C.F.R. <W039> 2510.3-101.                                       

                  Pooled Certificate Class Percentage:  Means, for each class of
Pooled Certificates, the percentage which the Pooled Certificate constitutes of 
its entire class as set forth in Schedule A attached hereto under the caption "%
of Class."                                                                      

            Pooled Certificate Distribution Date:  Each of the FHLMC
Pooled Certificate Distribution Date and the FNMA Pooled Certificate            
Distribution Date.                                                              

         Pooled Certificate Distribution Date Information: The
information provided or updated monthly by FNMA and FHLMC in respect of Pooled  
Certificates in connection with each Pooled Certificate Distribution Date.      

              Pooled Certificates: The Pooled FHLMC Certificates and the
Pooled FNMA Certificates sold by the Seller to, and registered in the name of,  
or held for the benefit of, the Trustee pursuant to Section 2.01 or 2.04 and as 
more particularly described in Schedule A hereto.                               

                Pooled FHLMC Certificates: Multiclass Mortgage Participation
Certificates, issued by FHLMC and identified as the Pooled FHLMC Certificates in
Schedule A hereto.                                                              

                 Pooled FHLMC G003/SA Certificates:  FHLMC Multiclass Mortgage
Securities, Series G003, Class SA.                                              

                Pooled FHLMC G020/SB Certificates: FHLMC Multiclass Mortgage
Securities, Series G020, Class SB.                                              

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               Pooled FHLMC 1041/F Certificates: FHLMC Multiclass Mortgage
Participation Certificates, Series 1041, Class F.                               

                Pooled FHLMC 1385/S Certificates:  FHLMC Multiclass Mortgage
Participation Certificates, Series 1385, Class S.                               

                 Pooled FHLMC 1435/SB Certificates:  FHLMC Multiclass Mortgage
Participation Certificates, Series 1435, Class SB.                              

                 Pooled FHLMC 1483/FD Certificates:  FHLMC Multiclass Mortgage
Participation Certificates, Series 1483 Class FD.                               

                 Pooled FHLMC 1504/FA Certificates:  FHLMC Multiclass Mortgage
Participation Certificates, Series 1504, Class FA.                              

                 Pooled FHLMC 1578/SC Certificates:  FHLMC Multiclass Mortgage
Participation Certificates, Series 1578, Class SC.                              

                 Pooled FHLMC 1585/PM Certificates:  FHLMC Multiclass Mortgage
Participation Certificates, Series 1585, Class PM.                              

            Pooled Floating Rate Certificates:  Pooled FHLMC 1483/FD
Certificates and Pooled FHLMC 1504/FA Certificates.                             

           Pooled FNMA Certificates: Guaranteed REMIC Pass-Through
Certificates issued by FNMA and identified as the Pooled FNMA Certificates in   
Schedule A hereto.                                                              

            Pooled FNMA 93-41/SA Certificates: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1993-41, Class SA.                  

            Pooled FNMA 93-56/SB Certificates: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1993-56, Class SB.                  

            Pooled FNMA 93-60/SB Certificates: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1993-60, Class SB.                  

             Pooled FNMA 93-113/SF Certificates: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1993-113, Class SF.                 

             Pooled FNMA 93-120/SP Certificates: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1993-120, Class SP.                 

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             Pooled FNMA 93-179/SX Certificates: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1993-179, Class SX.                 

           Pooled FNMA 94-17/S Certificates: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1994-17, Class S.                   

           Pooled FNMA 97-44/Z Certificates: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1997-44, Class Z.                   

            Pooled FNMA 97-57/ZH Certificates: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1997-57, Class ZH.                  

           Pooled Inverse Floating Rate Certificates: Pooled FHLMC
G003/SA Certificates, Pooled FHLMC G020/SB Certificates, Pooled FHLMC 1041/F    
Certificates, Pooled FHLMC 1385/S Certificates, Pooled FHLMC 1435/SB            
Certificates, Pooled FHLMC 1578/SC Certificates, Pooled FHLMC 1585/PM           
Certificates, Pooled FNMA 93-41/SA Certificates, Pooled FNMA 93-56/SB           
Certificates, Pooled FNMA 93-60/SB Certificates, Pooled FNMA 93-113/SF          
Certificates, Pooled FNMA 93-120/SP Certificates, Pooled FNMA 93-179/SX         
Certificates, and Pooled FNMA 94-17/S Certificates.                             

         Pooled Securityholder:  The Trustee or its Depository
Participant for the benefit of the Securityholders.                             

                 Purchase Agreement:  The Purchase Agreement dated October 28,
1997 between Bear, Stearns & Co., Inc. and the Seller relating to the Pooled    
Certificates.                                                                   

                Rating Agency or Rating Agencies: Moody's and Fitch or their
successors. If such agencies or their successors are no longer in existence,    
"Rating Agencies" shall be deemed to refer to such nationally recognized        
statistical rating agencies, or other comparable Persons, designated by the     
Seller, notice of which designation shall be given to the Trustee, and specific 
ratings of Moody's and Fitch shall be deemed to refer to the equivalent ratings 
of the parties so designated.                                                   

                Record Date: With respect to any Distribution Date, the last
Business Day of the month preceding the month in which such Distribution Date   
occurs; provided, however, that for this purpose the Distribution Date is deemed
to occur on the 25th of each month, without regard to whether such day is a     
Business Day.                                                                   

         Remaining Pooled Certificate: Any class of the Pooled
Certificates, following the date on which the principal balance or notional     
principal balance of all other classes of the Pooled Certificates and Treasury  
Securities is reduced to zero.                                                  

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              Repurchase Price: In connection with the repurchase of any
Pooled Certificate or Treasury Security pursuant to Section 2.03(c) or Section  
7.01(a)(i), a price equal to the outstanding principal balance of the Pooled    
Certificate or principal amount of the Treasury Security as of the date of      
repurchase, plus accrued interest on the Pooled Certificate in accordance with  
the applicable Underlying Agreements.                                           

               Responsible Officer: When used with respect to the Trustee,
any officer of the Trustee assigned to and working in its Corporate Trust Office
or similar group administering the Trust Fund hereunder and also, with respect  
to a particular matter, any other officer of the Trustee to whom a particular   
matter is referred by the Trustee because of such officer's knowledge of and    
familiarity with the particular subject.                                        

                 Reserve Fund:  The portion of the Trust Fund constituting the
Treasury Securities.                                                            

               S&P:  Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies.                                                          

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

                 Security: Any Class A-1 Security as executed hereunder by the
Trustee and authenticated and delivered hereunder by the Security Registrar,    
substantially in the form of Exhibit A hereto.                                  

                Security Owner:  Any Person who is the beneficial owner of a
Security registered in the name of the Depository or its nominee.               

                Security Principal Balance: With respect to any Security, as
of any date of determination, the then outstanding principal amount of such     
Security, which is equal to the product of (a) the Percentage Interest evidenced
by such Security and (b) the then Class A-1 Balance of the Security.            

                  Security Registrar and Security Register:  Shall each have the
meanings provided in Section 4.02.                                              

                 Securityholder or Holder: As to the Securities, the person in
whose name a Security is registered in the Security Register, except that,      
solely for the purpose of giving any consent, approval or waiver pursuant to    
this Agreement, any Security registered in the name of the Seller or any        
Affiliate thereof shall be deemed not to be outstanding and shall not be taken  
into account for purposes of determining whether the Holders of Securities      
evidencing the requisite aggregate Percentage Interest necessary to effect any  
such consent, approval or waiver has been obtained, unless such Persons         
collectively own all the Securities.                                            

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             Seller:  Financial Asset Securitization, Inc., a Virginia
corporation, or its successor in interest.                                      

                  Single Security:  A Security with an original principal amount
of $1,000.                                                                      

               Substitute Pooled Certificate: One or more mortgage related
securities tendered to the Trustee pursuant to Section 2.04, issued by GNMA,    
FNMA or FHLMC, which meet the following criteria: (i) such substitution shall be
(a) in the case of the Pooled Floating Rate Certificates, with at least one     
floating rate certificate which is entitled to receive interest based on LIBOR  
whose coupon will at least equal the coupon of the Pooled Certificate being     
substituted for at all levels of LIBOR, (b) in the case of the Z Certificates,  
with one or more accrual certificates bearing a coupon no less than the coupon  
of the Pooled Certificate being substituted for, or (c) in the case of the      
Pooled Inverse Floating Rate Certificates, one or more inverse floating rate    
certificates based on LIBOR whose combined coupon will be at least equal to the 
coupon of the Pooled Certificates being substituted for at all levels of LIBOR, 
(ii) the sum of the outstanding principal amounts of the Substitute Pooled      
Certificates equals the sum of the outstanding principal amounts of the Deleted 
Pooled Certificates being substituted for, (iii) the Substitute Pooled          
Certificates as the date of substitution ultimately are backed by mortgage loans
(a) with a weighted average pass-through rate no more than 50 basis points below
and no more than 50 basis points above the weighted average pass-through rate of
the mortgage loans ultimately backing the Deleted Pooled Certificate and (b)    
which are conventional, fixed rate, one- to four-family, fully amortizing, level
payment, first mortgage loans with original maturities of up to 30 years, except
with respect to the Pooled FHLMC 1385/S Certificates and the Pooled FNMA 94-17/S
Certificates, for which the original maturity of the Mortgage Loans shall be up 
to 15 years, (iv) the inclusion of which in the Trust Fund will not result in a 
withdrawal or downgrading in the rating assigned to the Securities by the Rating
Agencies, written confirmation of which shall be provided by the Rating Agencies
to the Trustee and (v) will not cause the Trust Fund to lose its status as a    
grantor trust for federal income tax purposes as indicated in an Opinion of     
Counsel to be provided to the Trustee.                                          

           Substitute Treasury Security: One or more United States
Treasury securities tendered to the Trustee pursuant to Section 2.04 which meet 
the following criteria: (i) the maturity of the Substitute Treasury Securities  
shall be within 90 days of the maturity of the Treasury Securities being        
substituted for, (ii) the sum of the outstanding principal amounts of the       
Substitute Treasury Securities equals the sum of the outstanding principal      
amounts of the Deleted Treasury Securities being substituted for, (iii) the     
inclusion of which in the Trust Fund will not result in a withdrawal or         
downgrading in the rating assigned to the Securities by the Rating Agencies,    
written confirmation of which shall be provided by the Rating Agencies to the   
Trustee and (iv) will not cause the Trust Fund to lose its status as a grantor  
trust for federal income tax purposes as indicated in an Opinion of Counsel to  
be provided to the Trustee.                                                     

               Supplemental Distribution Date:  Shall have the meaning set
forth in Section  3.05(a).                                                      

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              Treasury Securities: The United States Treasury securities
sold by Seller to, and registered in the name of, or held for the benefit of,   
the Trustee pursuant to Section 2.01 or 2.04 and as more particularly described 
in Schedule A hereto.                                                           

            Treasury Security Distribution Date: With respect to the
Treasury Securities, February 15, 1998, August 15, 1998, February 15, 1999 and  
August 15, 1999, respectively, or the respective maturity dates of Substitute   
Treasury Securities.                                                            

               Trustee:  Norwest Bank Minnesota, National Association., in
its capacity as trustee, or its successor in interest.                          

           Trustee Fee: With respect to any Distribution Date, the
monthly fee equal to one-twelfth of the product of [0.0175%] and the Class      
Balance immediately prior to such Distribution Date, but not less than [$210.00]
with respect to any Distribution Date.                                          

              Trustee Fee Escrow Account: The trust account or accounts,
which shall at all times be Eligible Accounts, created and maintained by the    
Trustee pursuant to Section 3.03.                                               

              Trust Fund:  The segregated pool of assets subject hereto,
constituting the corpus of the trust created hereby and to be administered      
hereunder, consisting of:                                                       

(i)      the Pooled Certificates;           

             (ii)     the Treasury Securities constituting the Reserve
Fund;                                                                           

                  (iii) all amounts payable on the Pooled Certificates following
the Closing Date pursuant to the Underlying Agreements;         

               (iv) the Asset Proceeds Account and such funds or assets as
      are from time to time deposited in the Asset Proceeds Account other than
the amounts described in Section 3.04(iv) hereof;                 

                  (v)      the Seller's rights under the Purchase Agreement; and

         (vi) the income, payments and proceeds of each of the
foregoing.                                                                      

                Underlying Agreements:  The agreements pursuant to which the
related Pooled Certificates were issued, as in effect on the Closing Date.      

                Underlying Series:  Each series of securities which includes
one of the Pooled Certificates.                                                 

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               Z Certificates: Pooled FNMA 97-44/Z Certificates and Pooled
FNMA 97-57/ZH Certificates.                                                     

ARTICLE II

CONVEYANCE OF THE POOLED SECURITIES AND TREASURY SECURITIES;
ORIGINAL ISSUANCE OF SECURITIES 

            Section 2.01.     Conveyance of the Pooled Certificates.

            (a)      The Seller, concurrently with the execution and
delivery hereof, does hereby sell, transfer, assign, set-over and otherwise     
convey to the Trustee, in trust, for the use and benefit of the Securityholders,
without recourse, all the right, title and interest of the Seller (i) in and to 
the Pooled Certificates, (ii) in and to the Treasury Securities, (iii) in and to
the Purchase Agreement and (iv) in and to all other assets constituting the     
Trust Fund. Such assignment includes, without limitation, all amounts payable on
the Pooled Certificates pursuant to the Underlying Agreements and on the        
Treasury Securities following the Closing Date.                                 

                 (b)      In connection with such transfer and assignment, and
concurrently with its execution and delivery of this Agreement, the Seller shall
have caused the Pooled Certificates and the Treasury Securities to be registered
in the book-entry records of the Federal Reserve Bank of Minneapolis in the name
of the Trustee.                                                                 

            (c)      The transfer of the Pooled Certificates and the
Treasury Securities and all other assets constituting the Trust Fund is absolute
and is intended by the parties hereto as a sale.                                

                 (d)      It is intended that the conveyances by the Seller to
the Trustee of the Pooled Certificates and the Treasury Securities as provided  
for in this Section 2.01 be construed as a sale by the Seller to the Trustee of 
the Pooled Certificates and the Treasury Securities for the benefit of the      
Securityholders. Further, it is not intended that any such conveyance be deemed 
to be a pledge of the Pooled Certificates and the Treasury Securities by the    
Seller to the Trustee to secure a debt or other obligation of the Seller.       
However, in the event that the Pooled Certificates and the Treasury Securities  
are held to be property of the Seller, or if for any reason this Agreement is   
held or deemed to create a security interest in the Pooled Certificates and the 
Treasury Securities, then it is intended that (a) this Agreement shall also be  
deemed to be a security agreement within the meaning of Articles 8 and 9 of the 
New York Uniform Commercial Code and the Uniform Commercial Code of any other   
applicable jurisdiction; (b) the conveyance provided for in Section 2.01 shall  
be deemed to be a grant by the Seller to the Trustee of a security interest in  
all of the Seller's right (including the power to convey title thereto), title  
and interest, whether now owned or hereafter acquired, in and to (1) the Pooled 
Certificates and the Treasury Securities, (2) all amounts payable pursuant to   
the Pooled Certificates and the Treasury Securities in accordance with the terms
thereof and (3) any and all general intangibles consisting of, arising from or  
relating to any of the foregoing, and all                                       

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proceeds of the conversion, voluntary or involuntary, of the foregoing into     
cash, instruments, securities or other property, including without limitation   
all amounts from time to time held in the Asset Proceeds Account, whether in the
form of cash, instruments, securities or other property, other than the amounts 
described in Section 3.04(iv) hereof; (c) the possession by the Trustee or any  
agent of the Trustee of such items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the  
secured party," or possession by a purchaser or a person designated by such     
secured party, for purposes of perfecting the security interest pursuant to the 
New York Uniform Commercial Code and the Uniform Commercial Code of any other   
applicable jurisdiction (including, without limitation, Section 9-305, 8-313 or 
8-321 thereof); and (d) notifications to persons holding such property, and     
acknowledgments, receipts or confirmations from persons holding such property,  
shall be deemed notifications to, or acknowledgments, receipts or confirmations 
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.      

               The Seller and the Trustee, at the Seller's or the Majority
Securityholders' direction, shall, to the extent consistent with this Agreement,
take such reasonable actions as may be determined to be necessary to ensure     
that, if this Agreement were deemed to create a security interest in the Pooled 
Certificates and the Treasury Securities, and the other property described      
above, such security interest would be deemed to be a perfected security        
interest of first priority under applicable law and will be maintained as such  
throughout the term of this Agreement.                                          

                  Section 2.02.     Acceptance of Trust Fund by Trustee; Initial
Issuance of Securities.                                                         

                 The Trustee acknowledges receipt of the Underlying Agreements
and the transfer and assignment to it of the Pooled Certificates and the        
Treasury Securities as evidenced by the written confirmation of the registration
of such Pooled Certificates and Treasury Securities in the name of the Trustee, 
in good faith and without notice of any adverse claim, and the assignment to it 
of all other assets included in the Trust Fund and declares that it holds and   
will hold its interest in the Pooled Certificates and the Treasury Securities   
and all other assets included in the Trust Fund in trust for the exclusive use  
and benefit of all present and future Securityholders in accordance with the    
terms of this Agreement. Concurrently with such transfer and assignment and in  
exchange therefor, pursuant to the written request of the Seller executed by an 
officer of the Seller, the Trustee has executed and caused to be authenticated  
and delivered to or upon the order of the Seller, the Securities in authorized  
denominations evidencing the entire beneficial ownership of the Trust Fund.     

                 Until the Trust Fund is terminated in accordance with Section
7.01, except as provided herein, the Trustee shall not assign, sell, dispose of 
or transfer any interest in the Pooled Certificates and the Treasury Securities 
or any other asset constituting the Trust Fund or permit the Pooled Certificates
and the Treasury Securities or any other asset constituting the Trust Fund to be
subjected to any lien, claim or encumbrance arising by, through or under the    
Trustee or any person claiming by, through or under the Trustee.                

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                  Section 2.03.     Representations and Warranties of the Seller
and the Trustee.                                                                

             (a)      The Seller hereby represents and warrants to the
Trustee and for the benefit of the Securityholders, as of the Closing Date,     
that:                                                                           

                     (i) The Seller is a corporation duly organized,
                          validly existing and in good standing under the laws
                           of the State of Virginia, and the Seller is possessed
                         of all licenses necessary to carry on its business.

                          (ii) The execution and delivery of this Agreement by
                         the Seller, and the performance and compliance with
                         the terms of this Agreement by the Seller, will not
                          violate the Seller's certificate of incorporation or
                        bylaws or constitute a default (or an event which,
                  with notice or lapse of time, or both, would
                          constitute a default) under, or result in the breach
                       of, any material agreement or other instrument to
                         which it is a party or which is applicable to it or
any of its assets.        

                    (iii) The Seller has the full right, power and
                authority to enter into and consummate all
                  transactions contemplated by this Agreement,
                     including but not limited to selling the Pooled
                     Certificates and the Treasury Securities to the
                          Trustee, has duly authorized the execution, delivery
                     and performance of this Agreement, and has duly
            executed and delivered this Agreement.

                      (iv) This Agreement, assuming due authorization,
                          execution and delivery by the Trustee, constitutes a
                        valid, legal and binding obligation of the Seller,
                           enforceable against the Seller in accordance with the
                         terms hereof, subject to (A) applicable bankruptcy,
                           insolvency, reorganization, moratorium and other laws
                    affecting the enforcement of creditors' rights
                      generally, and (B) general principles of equity,
                          regardless of whether such enforcement is considered
          in a proceeding in equity or at law.

                    (v) The Seller is not in violation of, and its
                      execution and delivery of this Agreement and its
                       performance and compliance with the terms of this
                       Agreement will not constitute a violation of, any
                          law, any order or decree of any court or arbiter, or
                           any order, regulation or demand of any federal, state
                    or local governmental or regulatory authority,

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                        which violation is likely to affect materially and
                           adversely either the ability of the Seller to perform
                           its obligations under this Agreement or the financial
condition of the Seller.  

                          (vi) No litigation is pending or, to the best of the
                       Seller's knowledge, threatened against the Seller
                         which, if determined adversely to the Seller, would
                           prohibit the Seller from entering into this Agreement
                     or is likely to materially and adversely affect
                     either the ability of the Seller to perform its
                       obligations under this Agreement or the financial
condition of the Seller.  

                    (vii) The Seller was, immediately prior to the
                          transfer of the Pooled Certificates and the Treasury
                       Securities to the Trustee, the sole owner thereof
                   free and clear of any lien, pledge, charge or
                         encumbrance of any kind (except any lien created by
this Agreement).          

                        (viii) The Seller acquired the Pooled Certificates
                       and the Treasury Securities in good faith without
                notice of any adverse claim, lien, charge,
                         encumbrance or security interest (including without
                          limitation, federal tax liens or liens arising under
ERISA).                   

                          (ix) The Seller has not assigned any interest in the
                        Pooled Certificates and the Treasury Securities or
                      any distributions or payments thereon, except as
contemplated herein.      

                           (x) The Trustee, in its capacity as the holder of the
              Pooled Certificates, will be entitled to
                         distributions under the Underlying Agreements equal
                         to all distributions of interest and principal made
                        on the Pooled Certificates, and in its capacity as
                    the holder of the Treasury Securities, will be
                       entitled to all payments of principal made on the
Treasury Securities.      

                           (xi) As of the Closing Date, collectively, the Pooled
                      Certificates and the Treasury Securities have an
                          aggregate principal balance greater than or equal to
     the Original Class A-1 Balance.

                  (xii) The information relating to the Pooled
                           Certificates and the Treasury Securities set forth in
                    Schedule A is true and correct in all material
respects.                 

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                          (xiii) Each Pooled Certificate and Treasury Security
                    is an Uncertificated Security (as such term is
                          defined in Article 8 of the Uniform Commercial Code)
                          registered on the books of the Federal Reserve Banks
                         or the Depository in the name of the Trustee or its
                      financial intermediary on behalf of the Trustee.

                     (xiv) The Pooled Certificates are REMIC regular
interests.                

                   (xv) The Seller has no actual knowledge after
                         reasonable inquiry that (a) each trust issuing each
                        Pooled Certificate was not duly created and is not
                          validly existing and (b) each Pooled Certificate (1)
                         was not validly issued by such trust and (2) is not
                           outstanding, (3) is not the legal, valid, binding and
                         enforceable obligation of such trust and (4) is not
                           entitled to the benefits of the pooling and servicing
                    agreement, indenture, trust agreement or other
                        document pursuant to which such Pooled Certificate
                  was issued (except as limited by bankruptcy,
                    insolvency or other similar laws affecting the
                          enforcement of creditors' rights generally or to the
                           extent that such enforceability may be subject to the
                        exercise of judicial discretion in accordance with
    general equitable principles).

              (b)      The Trustee hereby represents and warrants to the
Seller and for the benefit of the Securityholders, as of the Closing Date, that:

                        (i) The Trustee is a national banking association,
                           duly organized and validly existing under the laws of
   the United States of America.

                          (ii) The execution and delivery of this Agreement by
                          the Trustee, and the performance and compliance with
                          the terms of this Agreement by the Trustee, will not
                           violate the Trustee's charter or bylaws or constitute
                           a default (or an event which, with notice or lapse of
                          time, or both, would constitute a default) under, or
                        result in the breach of, any material agreement or
                         other instrument to which it is a party or which is
                         applicable to it or any of its assets which default
                         is likely to affect materially and adversely either
                           the ability of the Trustee to perform its obligations
           hereunder or its financial condition.

                           (iii) The Trustee has the full power and authority to
                enter into and consummate all transactions
         contemplated by this Agreement, has

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                 duly authorized the execution, delivery and
                          performance of this Agreement, and has duly executed
   and delivered this Agreement.

                      (iv) This Agreement, assuming due authorization,
                         execution and delivery by the Seller, constitutes a
                         valid, legal and binding obligation of the Trustee,
                        enforceable against the Trustee in accordance with
                 the terms hereof, subject to (A) applicable
                        bankruptcy, insolvency, reorganization, moratorium
                 and other laws affecting the enforcement of
                  creditors' rights generally, and (B) general
                      principles of equity, regardless of whether such
                         enforcement is considered in a proceeding in equity
                   or at law or in an administrative proceeding.

                     (v) The Trustee is not in violation of, and its
                      execution and delivery of this Agreement and its
                       performance and compliance with the terms of this
                       Agreement will not constitute a violation of, any
                          law, any order or decree of any court or arbiter, or
                      any order or regulation of any federal, state or
                       local governmental or regulatory authority, which
                  violation is likely to affect materially and
                    adversely either the ability of the Trustee to
                         perform its obligations under this Agreement or the
         financial condition of the Trustee.

                          (vi) No litigation is pending or, to the best of the
                         Trustee's knowledge, threatened against the Trustee
                         which would prohibit the Trustee from entering into
                   this Agreement or is likely to materially and
                           adversely affect either the ability of the Trustee to
                         perform its obligations under this Agreement or the
         financial condition of the Trustee.

                    (vii) The Pooled Certificates and the Treasury
                         Securities will be held in the Trustee's account at
                         the Federal Reserve Bank of Minneapolis, Minnesota,
                     as evidenced by the written confirmation of the
                           registration of such Pooled Certificates and Treasury
                   Securities in the name of the Trustee; it has
                       acquired the Pooled Certificates and the Treasury
                          Securities on behalf of the Securityholders from the
                          Seller in good faith, for value, and, to the best of
                       the Trustee's knowledge, without notice or actual
                   knowledge of any adverse claim, lien, charge,
                          encumbrance or security interest (including, without
                          limitation, federal tax liens or liens arising under
                      ERISA); it has not and will not, in any capacity
                         other than as Trustee, assert any claim or interest
                 in the Pooled Certificates and the Treasury
                          Securities and will hold its interest in such Pooled
   Certificates and the Treasury

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                           Securities and the proceeds thereof in trust pursuant
                    to the terms of this Agreement; and it has not
                   encumbered or transferred its right, title or
                          interest in the Pooled Certificates and the Treasury
Securities.               

                 (c)      It is understood and agreed that the representations
and warranties set forth in Section 2.03(a) shall survive the execution and     
delivery of this Agreement. Upon discovery by either party hereto of a breach of
any of the foregoing representations and warranties which materially and        
adversely affects the interests of the Securityholders or either party hereto,  
the party discovering such breach will give prompt written notice thereof to the
other party hereto and to the Securityholders. Within thirty (30) days of the   
earlier of either discovery by or notice to the Seller of any breach of a       
representation or warranty of the Seller that materially and adversely affects  
the interests of the Securityholders, the Seller shall use its best efforts     
promptly to cure such breach in all material respects and, if such breach cannot
be cured, the Seller shall, at the election of the Majority Securityholders,    
repurchase each Pooled Certificate and Treasury Security affected by the breach 
at the Repurchase Price. If the Seller is to repurchase Pooled Certificates, the
Trustee shall promptly determine the Repurchase Price in accordance with the    
definition thereof. Repurchase of any of the Pooled Certificates or Treasury    
Securities pursuant to the foregoing provisions of this Section 2.03(c) shall be
accomplished by (i) deposit in the Asset Proceeds Account on the Business Day   
prior to the next succeeding Distribution Date of the amount of the Repurchase  
Prices of the Deleted Pooled Certificates and Deleted Treasury Securities and   
(ii) amending Schedule A hereto to remove the related Deleted Pooled            
Certificates and Deleted Treasury Securities.                                   

                  Section 2.04. Substitution of Pooled Certificates and Treasury
Securities. Notwithstanding anything to the contrary in this Agreement, in lieu 
of repurchasing a Pooled Certificate or Treasury Security pursuant to Section   
2.03(c), the Seller may, no later than the date by which such repurchase by the 
Seller would otherwise be required, cause to be registered in the book-entry    
record of the Federal Reserve Bank of Minneapolis in the name of the Trustee a  
Substitute Pooled Certificate or Substitute Treasury Security, as the case may  
be, accompanied by an Officer's Certificate of the Seller identifying such      
Substitute Pooled Certificate or Substitute Treasury Security, as the case may  
be, and confirming that it conforms to the requirements set forth in the        
definition of "Substitute Pooled Certificate" or "Substitute Treasury Security",
as the case may be; provided, however, that substitution pursuant to this       
Section 2.04 in lieu of repurchase shall not be permitted after the termination 
of the 90 day period beginning on the Closing Date. Upon receipt of such        
Officer's Certificate and the written confirmation of such transfer, such       
Substitute Pooled Certificate or Substitute Treasury Security, as the case may  
be, shall thereafter be deemed to be a Pooled Certificate or Treasury Security  
hereunder. In the event of such a substitution, payments received on the        
Substitute Pooled Certificate or Substitute Treasury Security, as the case may  
be, for the month in which the substitution occurs shall be the property of the 
Seller and payments received on the Deleted Pooled Certificate or Deleted       
Treasury Security, as the case may be, during such month shall be the property  
of the Trust Fund. Upon receipt of the foregoing with respect to the Substitute 
Pooled Certificate or Substitute Treasury Security, as the case may be, the     
Trustee shall release to the Seller and shall execute                           

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and deliver all instruments of transfer or assignment, without recourse, in form
as provided to it as are necessary to vest in the Seller title to and rights    
under the related Deleted Pooled Certificate or Deleted Treasury Security, as   
the case may be, released pursuant to this Section 2.04. The Seller shall       
deliver the documents related to the Substitute Pooled Certificate in accordance
with the provisions of Section 2.02. The representations and warranties set     
forth in 2.03(a) concerning the Pooled Certificates or Substitute Treasury      
Security, as the case may be, shall be deemed to have been made by the Seller   
with respect to each Substitute Pooled Certificate or Substitute Treasury       
Security, as the case may be, as of the date of acceptance of such Substitute   
Pooled Certificate or Substitute Treasury Security, as the case may be, by the  
Trustee. On the date of substitution, the Trustee shall (i) amend Schedule A    
hereto, to reflect such substitution and shall provide a copy of the amended    
Schedule A to the Seller and the Rating Agencies and (ii) provide written       
acknowledgment to the Seller of the transfer and assignment to it of the related
Substitute Pooled Certificate or Substitute Treasury Security, as the case may  
be, in good faith and without notice of any adverse claim, and the assignment to
it of all other related assets to be included in the Trust Fund.                

ARTICLE III 

ADMINISTRATION OF THE POOLED CERTIFICATES AND TREASURY SECURITIES;
PAYMENTS AND REPORTS TO SECURITYHOLDERS 

              Section 3.01.     Administration of the Trust Fund and the
Pooled Certificates.                                                            

       If at any time the Trustee, as a holder of a Pooled
Certificate, is requested in writing in such capacity, whether by a             
Securityholder, a holder of a certificate of an Underlying Series or a party to 
the related Underlying Agreement or any other Person, to take any action or to  
give any consent, approval or waiver, including, without limitation, in         
connection with an amendment of any Underlying Agreement, the Trustee shall     
promptly notify all of the Securityholders and the Seller of such request and of
its planned course of action with respect thereto and shall, in its capacity as 
a holder of Pooled Certificates, take such action in connection with the        
exercise and/or enforcement of any rights and/or remedies available to it in    
such capacity with respect to such request, as the Majority Securityholders     
shall direct in writing. The Trustee shall promptly furnish to the Seller and,  
upon the written request of a Securityholder, such Securityholder, all notices, 
statements, reports or other information that it receives as holder of the      
Pooled Certificates.                                                            

Section 3.02.     Collection of Monies.     

                  (a)      In connection with its receipt of any distribution on
the Pooled Certificates on any Pooled Certificate Distribution Date (or such    
later date on which the Trustee shall receive the related Pooled Certificate    
Distribution Date Information), the Trustee shall review the related Pooled     
Certificate Distribution Date Information and shall confirm that the aggregate  
amount of                                                                       

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such distribution received by the Trustee is consistent with such information   
(it being understood that the Trustee shall be entitled to rely on the accuracy 
and correctness of such information).                                           

      (b)      If the Trustee receives a Notice of Final
Distribution in respect of any of the Pooled Certificates, the Trustee shall    
present and surrender any related Pooled Certificates which are in certificated 
form for final payment thereon in accordance with the terms and conditions of   
the related Underlying Agreement and such notice. The Trustee shall promptly    
deposit in the Asset Proceeds Account the final distribution received by the    
Trustee upon presentation and surrender of such Pooled Certificates for         
distribution in accordance with Section 3.05 hereof on the next succeeding      
Distribution Date.                                                              

               Section 3.03.   Establishment of Asset Proceeds Account and
Trustee Fee Escrow Account; Deposits Therein.                                   

                 (a)      The Trustee, for the benefit of the Securityholders,
shall establish and maintain one or more interest bearing trust accounts        
(collectively, the "Asset Proceeds Account"), each of which shall be an Eligible
Account, entitled "Norwest Bank Minnesota, National Association, as trustee for 
the registered holders of Financial Asset Securitization, Inc. Mortgage         
Participation Securities, Series 1997-1, Asset Proceeds Account", held in trust 
by the Trustee for the benefit of the Securityholders. The Trustee shall cause  
all distributions received on the Pooled Certificates and all payments received 
on the Treasury Securities by the Trustee in its capacity as holder of the      
Pooled Certificates and Treasury Securities, from whatever source, and all      
amounts received by it representing payment of a Repurchase Price pursuant to   
Section 2.03(c) and 7.01(a)(i), subsequent to the Closing Date to be deposited  
directly into the Asset Proceeds Account. The Asset Proceeds Account is         
initially located at the Trustee. The Trustee shall give notice to the Seller   
and to Securityholders of any new location of the Asset Proceeds Account prior  
to any change thereof.                                                          

                (b)      In the event that payments in respect of the Pooled
Certificates and Treasury Securities are received by the Trustee prior to the   
related Distribution Date, the Trustee may invest such funds deposited in the   
Asset Proceeds Account in one or more Permitted Investments held in the name of 
the Trustee and shall receive as compensation, in addition to the Trustee Fee,  
any interest or investment income earned on such Permitted Investments, which   
may be withdrawn by the Trustee on each Distribution Date and shall not         
constitute Available Funds. Notwithstanding the foregoing, no such Permitted    
Investment may mature later than the day before such related Distribution Date  
(unless such Permitted Investment is an obligation of the Trustee, in which case
such Permitted Investment may mature on the Distribution Date) and no such      
investment shall be sold prior to its maturity date. The amount of any losses   
incurred in respect of any such investments shall be deposited in the Asset     
Proceeds Account by the Trustee out of its own funds immediately as realized.   

                 (c)      The Trustee shall establish and maintain one or more
interest bearing trust accounts (collectively, the "Trustee Fee Escrow          
Account"), each of which shall be an Eligible                                   

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Account, entitled "Norwest Bank Minnesota, National Association, as trustee for 
the registered holders of Financial Asset Securitization, Inc. Mortgage         
Participation Securities, Series 1997-1, Trustee Fee Escrow Account" held in    
trust (but outside of the Trust Fund established hereby) by the Trustee. The    
Trustee Fee Escrow Account is initially located at the Trustee. The Trustee     
shall give notice to the Seller and the Securityholders of any new location of  
the Trustee Fee Escrow Account prior to any change thereof. On each Distribution
Date the Trustee may transfer from the Asset Proceeds Account to the Trustee Fee
Escrow Account the Escrow Amount for such Distribution Date. The Trustee may    
invest any amounts deposited in the Trustee Fee Escrow Account in one or more   
Permitted Investments held in the name of the Trustee in trust. No such         
Permitted Investment may mature later than the day before any Distribution Date 
which in the Trustee's sole discretion is believed to be a Distribution Date    
upon which the Trustee Fee may exceed interest received on the Pooled           
Certificates (unless such Permitted Investment is an obligation of the Trustee, 
in which event such Permitted Investment may mature on the Distribution Date).  
No investment shall be sold prior to its maturity date unless the investment    
must be sold to pay the Trustee Fee. The amount of any losses incurred in       
respect of any investment shall be deposited in the Trustee Fee Escrow Account  
by the Seller out of its own funds immediately as realized. All interest and    
investment income on amounts in the Trustee Fee Escrow Account shall be retained
in the Trustee Fee Escrow Account. On any Distribution Date on which the Trustee
Fee for such Distribution Date exceeds the interest received from the Pooled    
Certificates for such Distribution Date, the Trustee may withdraw the amount of 
the excess from the Trustee Fee Escrow Account, and pay such excess to the      
Trustee in its individual capacity. If the Trustee resigns or is removed and a  
successor trustee is appointed, any amounts on deposit in the Trustee Fee Escrow
Account shall thereafter be held in the same manner by and for the benefit of   
the successor trustee. Upon the termination of the Trust Fund, any amount       
(including earnings) remaining in the Trustee Fee Escrow Account shall be paid  
to the Trustee.                                                                 

                 (d)      The Seller shall cause all distributions received on
the Pooled Certificates or Treasury Securities by the Seller or any of its      
Affiliates after the Closing Date to be deposited directly into the Asset       
Proceeds Account.                                                               

          Section 3.04.     Permitted Withdrawals From the Asset
Proceeds Account.                                                               

             The Trustee may from time to time withdraw funds from the
Asset Proceeds Account for the following purposes (without any particular order 
of priority):                                                                   

                         (i) to make distributions in the amounts and in the
                  manner provided for in Section 3.05;

                           (ii) to pay to the Person entitled thereto any amount
                          deposited in the Asset Proceeds Account in
error;          

                     (iii) to clear and terminate the Asset Proceeds
                                 Account upon the termination of this Agreement;
and           

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                         (iv) to pay itself, as additional compensation, the
                               net reinvestment income permitted to be paid to
                         it as provided in Section 3.03(b) and any
                          amounts to which it is entitled to be paid
         pursuant to Section 5.05.

             On each Distribution Date, the Trustee shall withdraw all
funds from the Asset Proceeds Account and shall use such funds withdrawn from   
the Asset Proceeds Account only for the purposes described in this Section 3.04 
and in Section 3.05.                                                            

Section 3.05.     Distributions.            

               (a)      On each Distribution Date, the Trustee shall apply
amounts in the Asset Proceeds Account representing Available Funds in the       
following manner and order of priority, in each case to the extent of the       
remaining Available Funds:                                                      

                                    first, from amounts with respect to interest
                                   received on the Pooled Certificates, to the
                                  Trustee, to pay the portion of the Trustee
                                  Fee not being covered by a withdrawal from
                                 the Trustee Fee Escrow Account and, after
                                  payment of the Trustee Fee, to deposit the
                               Escrow Amount in the Trustee Fee Escrow
Account;

                            second, from amounts with respect to
                        principal received on the Pooled
                                    Certificates and Treasury Securities, to the
                                 Securityholders an amount with respect to
                                  principal, if any, such that the principal
                            balance of the Securities after such
                              distribution is equal to the aggregate
                              balance of the Pooled Certificates and
                Treasury Securities; and

                                  third, from the remaining Available Funds,
                           to the Securityholders as interest.

             If the Trustee has not received a distribution on, or the
Pooled Certificate Distribution Date Information with respect to, any of the    
Pooled Certificates, or payment on any Treasury Security, by the Determination  
Time, the distribution or payment allocable to such Pooled Certificates or      
Treasury Securities will not be made on the applicable Distribution Date, but,  
if such distribution and such Pooled Certificate Distribution Date Information, 
or payment on any Treasury Security, (i) is received by the Trustee by noon,    
Eastern Standard Time, on the third Business Day after the Determination Time,  
the Trustee will distribute such amounts, in accordance with the priorities set 
forth above on the third Business Day after the Determination Time (a           
"Supplemental Distribution Date") or (ii) is received by the Trustee after noon,
Eastern Standard Time, on the third Business Day after the Determination Time,  
such amounts will be distributed by the Trustee on the next succeeding          
Distribution Date, and in neither case will additional interest be paid thereon.

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           For accounting purposes, each Distribution Date and, if
applicable, the related Supplemental Distribution Date is deemed to occur in the
same month as the concurrent or immediately preceding Pooled Certificate        
Distribution Date.                                                              

                  (b)      All distributions made to Securityholders pursuant to
Section 3.05(a) on each Distribution Date shall be allocated pro rata among the 
outstanding Securities based upon their respective Percentage Interests and,    
except in the case of the final distribution to the Securityholders, shall be   
made to the Holders of record on the related Record Date. Distributions to any  
Securityholder on any Distribution Date shall be made by wire transfer of       
immediately available funds to the account of such Securityholder at a bank or  
other entity having appropriate facilities therefor, if such Securityholder     
shall have so notified the Trustee in writing (which wiring instructions may be 
in the form of a standing order applicable to all future Distribution Dates) no 
less than five Business Days prior to the related Record Date (or, in the case  
of the initial Distribution Date, no later than the related Record Date) and is 
the registered owner of Securities with an aggregate initial Security Principal 
Balance of not less than $1,000,000, or otherwise by check mailed by first class
mail to the address of such Securityholder appearing in the Security Register.  
Final distribution to each Securityholder will be made in like manner, but only 
upon presentment and surrender of such Security at the Corporate Trust Office or
such other location specified in the notice to Securityholders of such final    
distribution.                                                                   

        (c)      Notwithstanding any other provision of this
Agreement, the Trustee shall comply with all federal withholding requirements   
respecting payments to Securityholders of interest or, subject to the receipt of
such information with respect to the Pooled Certificates and Treasury           
Securities, the accrual of original issue discount that the Trustee reasonably  
believes are applicable under the Code. The consent of Securityholders shall not
be required for such withholding. In the event the Trustee does withhold any    
amount from payments to any Securityholder pursuant to federal withholding      
requirements, the Trustee shall indicate the amount withheld to such            
Securityholders.                                                                

            (d)      The Trustee may conclusively rely on the Pooled
Certificate Distribution Date Information in making the calculations called for 
in this Section 3.05 and in Section 3.06. If the Pooled Certificate Distribution
Date Information is insufficient to make the calculations provided for in this  
Section 3.05, the Trustee shall promptly request FHLMC, with respect to the     
Pooled FHLMC Certificates, and FNMA, with respect to the Pooled FNMA            
Certificates, to provide sufficient information in writing, and after receipt of
such information the Trustee shall make on the following Distribution Date any  
necessary adjustments in the application of amounts in the Asset Proceeds       
Account. If such information is not received from FHLMC or FNMA, the Trustee    
shall not be responsible for making any such adjustment.                        

    Section 3.06.     Statements to Securityholders.

                On each Distribution Date, the Trustee shall prepare, to the
extent it receives information regarding the distributions on the Pooled        
Certificates and Treasury Securities on the                                     

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Distribution Date; and shall forward by mail, a statement to each               
Securityholder, the Seller and the Rating Agencies stating:                     

                        (i)      the Available Funds for such Distribution
Date;                     

                   (ii) the interest distribution amount and the
                         principal distribution amount for such Distribution
                    Date and, with respect to each, the components
                           thereof as reported in the related Pooled Certificate
                        Distribution Date Information or other information
                         received by the Trustee from FHLMC or FNMA pursuant
                   to Section 3.05(d) with respect to the Pooled
Certificates;             

                           (iii) the Class A-1 Balance before and after applying
         payments on such Distribution Date;

                 (iv)     the effective interest rate on the
            Securities for such Distribution Date;

                           (v) the outstanding principal and/or notional amount,
                        as the case may be, immediately prior to and after
                    taking into account distributions made on such
                         Distribution Date, and the current interest rate on
                           each of the Pooled Certificates for such Distribution
Date;                     

                        (vi) the outstanding principal amount, immediately
                          prior to and after taking into account distributions
                    made on such Distribution Date, of each of the
Treasury Securities; and  

                  (vii) the amount of the Trustee Fee for such
Distribution Date.        

                In the case of the information furnished pursuant to clauses
(ii) and (iii) above, the amounts shall also be expressed as a dollar amount per
$1000 of principal face amount. The Trustee's responsibility for reporting the  
above information is limited to the availability, timeliness of receipt of, and 
accuracy of the Pooled Certificate Distribution Date Information and any        
additional written information received by the Trustee pursuant to Section      
3.05(d) with respect to the Pooled Certificates. If the Trustee receives any    
such additional information after preparing a statement required by this        
Section, the Trustee shall report the related adjustments in a revised statement
prepared after receipt of such information.                                     

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                 In addition, the Trustee promptly will furnish to the Seller,
and upon the written request of a Securityholder, to such Securityholder, copies
of any notices, statements, reports or other communications, received by the    
Trustee in its capacity as the holder of Pooled Certificates and Treasury       
Securities.                                                                     

                On or before March 31st of each calendar year, commencing in
1998, the Trustee shall prepare and deliver by first class mail to the Seller   
and to each Person who at any time during the prior calendar year was a         
Securityholder of record a statement containing the information required to be  
contained in the regular monthly report to Securityholders, as set forth in     
clauses (ii) and (iv) above aggregated for such prior calendar year or in the   
case of a Securityholder, the applicable portion thereof during which such      
Person was a Securityholder. 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 and   
regulations thereunder as from time to time are in force.                       

              The Trustee shall be responsible for preparing, at its own
expense, signing and filing, on behalf of the Trust Fund, federal income tax and
information returns with the Internal Revenue Service ("IRS") and Minnesota     
income tax returns and the returns of any other state taxing authority the      
necessity of filing of which shall have been confirmed to the Trustee in writing
either by the delivery of an Opinion of Counsel to such effect or by the        
delivery to the Trustee of a written notification to such effect by the taxing  
authority of any such state. The Seller shall provide the Trustee within 10 days
of the Closing Date all information deemed necessary by the Trustee to fulfill  
its obligations under this paragraph. The Trustee shall furnish to each         
Securityholder at the time required by law such information reports or returns  
as are required by applicable federal, state or local law with respect to the   
Trust Fund to enable Securityholders to prepare their tax returns and will      
furnish comparable information to the IRS and other taxing authorities as and   
when required by law to do so.                                                  

              The Trustee shall be responsible for preparing, at its own
expense, signing and filing, on behalf of the Trust Fund, all filings with the  
Securities and Exchange Commission required to be made on behalf of the Trust   
Fund.                                                                           

         Section 3.07.     Access to Certain Documentation and
Information.                                                                    

                  The Trustee shall provide to the Seller access to all reports,
documents and records maintained by the Trustee in respect of its duties        
hereunder, such access being afforded without charge but only upon three        
Business Days' written request and during normal business hours at offices      
designated by the Trustee.                                                      

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ARTICLE IV

THE SECURITIES

Section 4.01.     The Securities.           

            (a)      The Depository, the Seller and the Trustee have
entered into a letter agreement dated as of October 30, 1997 (the "Depository   
Agreement"). Except as provided in Subsection 4.01(b), the Securities shall at  
all times remain registered in the name of the Depository or its nominee and at 
all times: (i) registration of such Securities may not be transferred by the    
Trustee except to a successor to the Depository; (ii) ownership and transfers of
registration of such Securities on the books of the Depository shall be governed
by applicable rules established by the Depository; (iii) the Depository may     
collect its usual and customary fees, charges and expenses from its Depository  
Participants; (iv) the Trustee shall deal with the Depository as representative 
of the Security Owners for purposes of exercising the rights of Securityholders 
under this Agreement, and requests and directions for and votes of such         
representative shall not be deemed to be inconsistent if they are made with     
respect to different Security Owners; and (v) the Trustee may rely and shall be 
fully protected in relying upon information furnished by the Depository with    
respect to its Depository Participants.                                         

                        All transfers by Security Owners of Securities shall
be made in accordance with the procedures established by the Depository         
Participant or brokerage firm representing such Security Owners.  Each          
Depository Participant shall only transfer Certificates of Security Owners it   
represents or of brokerage firms for which it acts as agent in accordance with  
the Depository's normal procedures.                                             

                 (b)       If (i)(A) the Seller advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its      
responsibilities as Depository and (B) the Trustee or the Seller is unable to   
locate a qualified successor within 30 days or (ii) the Seller at its option    
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall request that the Depository notify all
Security Owners of the occurrence of any such event and of the availability of  
definitive, fully registered Securities (the "Definitive Securities") to        
Security Owners requesting the same. Upon surrender to the Trustee of the       
Securities by the Depository, accompanied by registration instructions from the 
Depository for registration, the Trustee shall issue the Definitive Securities. 
Neither the Seller nor the Trustee shall be liable for any delay in delivery of 
such instructions and may conclusively rely on, and shall be protected in       
relying on, such instructions.                                                  

                  (c)      The Securities shall be substantially in the form set
forth in Exhibit A hereto. The Securities shall be executed by manual or        
facsimile signature on behalf of the Trustee in its capacity as trustee         
hereunder by an authorized officer. Securities bearing the manual or facsimile  
signatures of individuals who were at any time the proper officers of the       
Trustee shall be entitled to all benefits under this Agreement, subject to the  
following sentence,                                                             

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notwithstanding that such individuals or any of them have ceased to hold such   
offices prior to the authentication and delivery of such Securities or did not  
hold such offices at the date of such Securities. No Security shall be entitled 
to any benefit under this Agreement, or be valid for any purpose, unless there  
appears on such Security a certificate of authentication substantially in the   
form provided for herein executed by the Security Registrar by manual signature,
and such certificate upon any Security shall be conclusive evidence, and the    
only evidence, that such Security has been duly authenticated and delivered     
hereunder. All Securities shall be dated the date of their authentication.      

          (d)      The Securities will be registered as a single
Security held by a nominee of the Depository, and beneficial interests will be  
held by investors through the book-entry facilities of the Depository in minimum
denominations of $25,000 and increments of $1 in excess thereof, except that one
Security may be issued in a different amount so that the sum of the             
denominations of all outstanding Securities shall equal the Original Class A-1  
Balance.                                                                        

           (e)      If the Trust is terminated pursuant to Section
7.01(a)(iii), the book-entry system through the Depository shall be terminated  
by the Seller and the Trustee and the Trustee shall request that the Depository 
notify all Security Owners of the occurrence of such event and that, following  
the Final Distribution Date, the Security Owners as of the Record Date for the  
Final Distribution Date will be required to hold their pro rata portion of the  
Remaining Pooled Certificate in the book-entry records of the Federal Reserve   
Banks and that the Trustee will not release any further distributions in respect
of the Remaining Pooled Certificate to a Security Owner until such Security     
Owner or the Depository has provided the Trustee with sufficient information to 
transfer such Security Owner's pro rata portion of the Remaining Pooled         
Certificate in the book-entry records of the Federal Reserve Banks from the     
Trustee to such Security Owner.                                                 

              Section 4.02.     Registration of Transfer and Exchange of
Securities.                                                                     

                  (a)      At all times during the term of this Agreement, there
shall be maintained at the office of a registrar (the "Security Registrar") a   
register (the "Security Register") in which, subject to such reasonable         
regulations as the Security Registrar may prescribe, the Security Registrar     
shall provide for the registration of Securities and of transfers and exchanges 
of Securities as herein provided. The Trustee is initially appointed (and hereby
agrees to act in accordance with the terms hereof) as Security Registrar for the
purpose of registering Securities and transfers and exchanges of Securities as  
herein provided. For so long as the Trustee acts as Security Registrar, its     
Corporate Trust Office shall constitute the offices of the Certificate Registrar
maintained for such purposes. The Security Registrar may appoint, by a written  
instrument delivered to the Seller, any other bank or trust company in New York 
to act as an additional or co-Security Registrar under such conditions as the   
Security Registrar may prescribe, provided that the predecessor Security        
Registrar shall not be relieved of any of its duties or responsibilities        
hereunder by reason of such appointment. If the Trustee resigns or is removed in
accordance with the terms hereof, the successor trustee shall immediately       
succeed to                                                                      

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its predecessor's duties as Security Registrar. The Seller and the Trustee shall
have the right to inspect the Security Register or to obtain a copy thereof at  
all reasonable times, and to rely conclusively upon a certificate of the        
Security Registrar as to the information set forth in the Security Register.    

               Every Securityholder agrees with the Security Registrar and
the Trustee that neither the Security Registrar, nor the Trustee shall be held  
accountable by reason of the disclosure of any such information as to the names 
and addresses of the Securityholders hereunder, regardless of the source from   
which such information was derived.                                             

                 (b)      Subject to the preceding subsections, upon surrender
for registration of transfer of any Security at the offices of the Security     
Registrar maintained for such purpose, the Trustee shall execute and the        
Security Registrar shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of a like aggregate       
Percentage Interest.                                                            

               (c)      At the option of any Holder, its Securities may be
exchanged for other Securities of authorized denominations of a like aggregate  
Percentage Interest, upon surrender of the Securities to be exchanged at the    
offices of the Security Registrar maintained for such purpose. Whenever any     
Securities are so surrendered for exchange, the Trustee shall execute and the   
Security Registrar shall authenticate and deliver the Securities which the      
Securityholder making the exchange is entitled to receive.                      

                 (d)      Every Security presented or surrendered for transfer
or exchange shall (if so required by the Trustee) be duly endorsed by, or be    
accompanied by a written instrument of transfer in the form satisfactory to the 
Trustee duly executed by, the Holder thereof or his attorney duly authorized in 
writing.                                                                        

                (e)      No service charge shall be made for any transfer or
exchange of Securities, but the Trustee may require payment of a sum sufficient 
to cover any tax or governmental charge that may be imposed in connection with  
any transfer or exchange of Securities.                                         

                 (f)      All Securities surrendered for transfer and exchange
shall be destroyed by the Security Registrar without liability on its part.     

              (g)      No transfer of a Security may be made to any Plan
unless an exemption granted by the Department of Labor applies to the           
acquisition, holding or transfer of such Security. Each purchaser of a Security,
by virtue of its purchase of such Security, will be deemed to have represented  
either that (i) it is not a Plan or (ii) such an exemption exists which exempts 
the acquisition, holding or transfer of a Security by such purchaser from the   
prohibited transaction rules of ERISA and the related excise tax provisions of  
the Code.                                                                       

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          Section 4.03.     Mutilated, Destroyed, Lost or Stolen
Securities.                                                                     

                If (i) any mutilated Security is surrendered to the Security
Registrar, or the Trustee and the Security Registrar receive evidence to their  
satisfaction of the destruction, loss or theft of any Security, and (ii) (except
in the case of a mutilated Security) there is delivered to the Trustee and the  
Security Registrar such agreement, security or indemnity as may be required by  
them to save each of them harmless, then, in the absence of notice to the       
Trustee or the Security Registrar that such Security has been acquired by a bona
fide purchaser, the Trustee shall execute and the Security Registrar shall      
authenticate and deliver, in exchange for or in lieu of any such mutilated,     
destroyed, lost or stolen Security, a new Security of like tenor and Percentage 
Interest but bearing a number not contemporaneously outstanding. Upon the       
issuance of any new Security under this Section, the Trustee may require the    
payment by the Securityholder of a sum sufficient to cover any tax or other     
governmental charge that may be imposed in relation thereto. Any duplicate      
Security issued pursuant to this Section shall constitute complete and          
indefeasible evidence of ownership in the Trust Fund, as if originally issued,  
whether or not the lost, stolen or destroyed Security shall be found at any     
time.                                                                           

Section 4.04.     Persons Deemed Owners.    

              Prior to due presentment of a Security for registration of
transfer, the Seller, the Trustee, the Security Registrar and any agent of the  
Seller, the Trustee or the Security Registrar may treat the Person in whose name
any Certificate is registered as the owner of such Security for the purpose of  
receiving distributions pursuant to Section 3.05 and for all other purposes     
whatsoever, and neither the Seller, the Trustee, the Security Registrar nor any 
agent of the Seller, the Trustee or the Security Registrar shall be affected by 
notice to the contrary.                                                         

Section 4.05.  Exchange of Securities.      

                 (a)      Beginning on the Distribution Date in November 1998,
any Holder or Security Owner holding not less than 10% of the outstanding       
principal amount of the Securities shall have the option to exchange not less   
than 10% of the outstanding principal amount of the Securities for a pro rata   
portion of each of the Pooled Certificates and Treasury Securities.             

               (b)      Holders or Security Owners may exercise the option
set forth in Section 4.05(a) by delivering an Option Exercise Notice to the     
Trustee, accompanied by the Option Exercise Fee, at least five Business Days    
prior to the proposed Exchange Date, which must be a Business Day. An Option    
Exercise Notice may not be revoked after delivery to the Trustee. The Trustee   
may refuse to accept, or give effect to, any Option Exercise Notice that is     
incomplete or defective, in its sole judgment, or not accompanied by the Option 
Exercise Fee.                                                                   

               (c)      The Trustee shall be entitled to charge a fee (the
"Option Exercise Fee"), as compensation, equal to the greater of (i) $500 and   
(ii) 0.02% of the outstanding principal amount of the Securities to be exchanged
for Pooled Certificates and Treasury Securities.                                

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              (d)      On the Exchange Date, the Trustee shall cause the
transfer of such Holder's or Security Owner's pro rata portion of each of the   
Pooled Certificates and Treasury Securities in the book-entry records of the    
Federal Reserve Banks and the Depository, as applicable, from the Trustee to    
such Holder or Certificate Owner.                                               

ARTICLE V 

THE TRUSTEE 

Section 5.01.     Duties of Trustee.        

          (a)      The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other         
instruments furnished to the Trustee which are specifically required to be      
furnished pursuant to any provision of this Agreement, shall examine them to    
determine whether they are in the form required by this Agreement and the       
Underlying Agreements; provided, however, that the Trustee shall not be         
responsible to determine, confirm or recalculate the accuracy or content of any 
such resolution, certificate or other instrument furnished to it pursuant to    
this Agreement. The Trustee shall notify the Securityholders and the Rating     
Agencies of any such documents which do not materially conform to the           
requirements of this Agreement in the event that the Trustee, after so          
requesting of the party required to deliver the same, does not receive          
satisfactorily corrected documents or a satisfactory explanation regarding any  
such nonconformities.                                                           

                         The Trustee shall forward or cause to be forwarded to
the Person entitled to receive the same in a timely fashion the notices, reports
and statements required to be forwarded by the Trustee pursuant to Sections     
3.01, 3.03, 3.06 and 7.01.                                                      

                 (b)      No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own        
negligent failure to act or its own willful misconduct; provided, however, that:

                         (i) The duties and obligations of the Trustee shall
          be determined solely by the express provisions of this
             Agreement, the Trustee shall not be liable 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, in the absence of bad faith on the part of the
                  Trustee, the Trustee may conclusively rely, as to the truth of
                the statements and the correctness of the opinions expressed
               therein, upon any certificates or opinions furnished by the
         Seller to the Trustee and which on their face, do not
  contradict the requirements of this Agreement;

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                         (ii) The Trustee shall not be personally liable for
            an error of judgment made in good faith by a Responsible
             Officer or Responsible Officers of the Trustee, unless it
                  shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;                        

                           (iii) The Trustee shall not be personally liable with
                respect to any action taken, suffered or omitted to be taken
               by it in good faith in accordance with the direction of the
                 Majority Securityholders in accordance with the terms of this
                 Agreement, as to the time, method and place of conducting any
          proceeding for any remedy available to the Trustee, or
             exercising any trust or power conferred upon the Trustee,
under this Agreement;                       

                           (iv) No provision in this Agreement shall require the
                  Trustee to expend or risk its own funds or otherwise incur any
                 personal financial liability in the performance of any of its
                 duties as Trustee hereunder, or in the exercise of any of its
                  rights or powers, if the Trustee shall have reasonable grounds
               for believing that repayment of funds or adequate indemnity
               against such risk or liability is not reasonably assured to
           it; provided that this provision shall not be deemed to
           abrogate the responsibilities undertaken by the Trustee
         hereunder to perform routine administrative duties in
accordance with the terms hereof; and       

                           (v) The Trustee shall not be deemed to have notice of
                any fact or circumstance upon the occurrence of which it may
             be required to take action hereunder unless a Responsible
              Officer of the Trustee has actual knowledge of such event,
             fact or circumstance or unless written notice of any such
           event is received by the Trustee at its Corporate Trust
Office.                                     

           Section 5.02.     Certain Matters Affecting the Trustee

 Except as otherwise provided in Section 5.01:

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

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

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                       (iii) The Trustee shall be under no obligation to
        exercise any of the trusts or powers vested in it by this Agreement or
         to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the       
       Securityholders, pursuant to the provisions of this Agreement, unless
   such Securityholders shall have offered to the Trustee reasonable
         security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby;                           

                     (iv) 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,
        direction, consent, order or other paper or document, but the Trustee,
        in its discretion, may make such further inquiry or investigation into
    such facts or matters as it may see fit, and, if the Trustee shall
      determine to make such further inquiry or investigation, it shall be
      entitled to the extent reasonable under the circumstances to examine
        the books, records and premises of such Person, personally or by agent
or attorney;                                                  

                        (v) The Trustee shall not be personally liable 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; and                      

                       (vi) The Trustee may execute any of the trusts or
        powers hereunder or perform any duties hereunder either directly or by
        or through agents or attorneys and shall not be liable for the default
or misconduct of any such agents or attorneys if selected with
reasonable care.                                              

                 Section 5.03.     Trustee Not Liable for Securities or Pooled
Certificates or Treasury Securities.                                            

              The recitals contained herein and in the Securities (other
than the statements attributed to, and the representations and warranties of,   
the Trustee in Article II and the signature of the Trustee on each Security)    
shall be taken as the statements of the Seller, and the Trustee assumes no      
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement (other than as specifically set   
forth in Section 2.03(b)) or of the Securities (other than that the Securities  
shall be duly and validly executed by it as Trustee and authenticated by it as  
Security Registrar) or of the Pooled Certificates or the Treasury Securities,   
the Underlying Agreements or any related document. Except as otherwise provided 
herein, the Trustee shall not be accountable for the use or application by the  
Seller of any of the Securities or of the proceeds of such Securities, or for   
the use or application of any funds paid to the Seller in respect of the        
assignment and delivery of the Pooled Certificates or the Treasury Securities.  

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 Section 5.04.     Trustee May Own Securities.

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

            Section 5.05.     Trustee's Fees; Indemnification of the
Trustee.                                                                        

           (a)      The Trustee shall withdraw the Trustee Fee, as
compensation, from the Asset Proceeds Account, and to the extent necessary, the 
Trustee Fee Escrow Account, as provided in Sections 3.03(c) and 3.05 hereof.    

             (b)      Subject to the provisions of this paragraph, the
Trustee and any director, officer, employee or agent of the Trustee shall be    
entitled to be indemnified and held harmless by the Trust Fund against any loss,
liability or expense (including, without limitation, costs and expenses of      
litigation, and of investigation, counsel fees and expenses, damages, judgments,
amounts paid in settlement and out-of-pocket expenses) arising out of, or       
incurred in connection with, this Agreement, the Securities, the exercise and   
performance of any of the powers and duties of the Trustee hereunder; provided  
that neither the Trustee nor any of the other above specified Persons shall be  
entitled to indemnification pursuant to this Section 5.05(b) for (i) allocable  
overhead, (ii) expenses or disbursements incurred or made by or on behalf of the
Trustee in the normal course of the Trustee's performing routine administrative 
duties in accordance with any of the provisions hereof, (iii) any expense or    
liability specifically required to be borne out of the Trustee's own funds      
pursuant to the terms hereof, or (iv) any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of the
Trustee's obligations and duties.                                               

                        The provisions of this Section 5.05(b) shall survive
any resignation or removal of the Trustee and appointment of a successor        
trustee.                                                                        

            Section 5.06.     Eligibility Requirements for Trustee .

                  The Trustee hereunder shall at all times be a trust company or
banking institution organized and doing business under the laws of the United   
States of America or any State thereof, authorized under such laws to exercise  
corporate trust powers, having a combined capital, surplus and undivided profits
of at least $50,000,000 (or shall be a member of a bank holding system, the     
combined capital and surplus of which is at least $50,000,000) and subject to   
supervision or examination by federal or state authority. If such trust company 
or banking institution publishes reports of condition at least annually,        
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section the combined capital, surplus  
and undivided profits of such trust company or banking institution shall be     
deemed to be its combined capital and surplus as set forth in its most recent   
report of condition so published. The Trustee shall at all times meet the       
requirements for a trustee under Section 26(a)(1) of the Investment Company Act 
and shall in no event be an Affiliate of the                                    

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Seller or of any Person involved in the organization or operation of the Seller.
In case at any time the Trustee shall cease to be eligible in accordance with   
the provisions of this Section, the Trustee shall resign immediately in the     
manner and with the effect specified in Section 5.07.                           

             Section 5.07.     Resignation and Removal of the Trustee.

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

                  (b)      If at any time the Trustee shall cease to be eligible
in accordance with the provisions of Section 5.06 and shall fail to resign after
written request therefor by the Seller or the Majority Securityholders, or if at
any time the Trustee shall become incapable of acting, or shall be adjudged     
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, then the Seller may remove the Trustee and appoint a successor     
trustee by written instrument, in duplicate, one copy of which instrument shall 
be delivered to the Trustee so removed and one copy to the successor trustee.   

                (c)      Majority Securityholders may at any time remove the
Trustee and appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact duly authorized,  
one complete set of which instruments shall be delivered to the Seller, one     
complete set to the Trustee so removed and one complete set to the successor so 
appointed. A copy of such instrument shall be delivered to the Securityholders  
by the Seller. All reasonable out-of-pocket costs and expenses incurred in      
connection with such removal and replacement of the Trustee, including without  
limitation, reasonable attorneys fees and expenses, shall be borne by the party 
requesting such action.                                                         

               (d)      Notwithstanding anything to the contrary contained
herein, (i) any resignation or removal of the Trustee and appointment of a      
successor trustee pursuant to any of the provisions of this Section shall become
effective only upon acceptance of appointment by the successor trustee as       
provided in Section 5.08 and (ii) no entity may be appointed as a successor     
trustee if such appointment would result in a withdrawal or downgrading of any  
then current rating assigned to the Securities by a Rating Agency.              

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Section 5.08.     Successor Trustee.        

           (a)      Any successor trustee appointed as provided in
Section 5.07 shall execute, acknowledge and deliver to the Seller, the          
Securityholders and to its predecessor trustee an instrument accepting such     
appointment hereunder, and thereupon the resignation or removal of the          
predecessor trustee shall become effective and the appointment of such successor
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. The predecessor trustee shall deliver to the
successor trustee the Pooled Certificates and related documents and statements  
held by it hereunder, and the Seller, the Trustee and the predecessor trustee   
shall execute and deliver such instruments and do such other things as may be   
required for more fully and certainly vesting and confirming in the successor   
trustee all such rights, powers, duties and obligations.                        

             (b)      No successor trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor   
trustee shall be eligible under the provisions of Section 5.06.                 

                  (c)      Upon acceptance of appointment by a successor trustee
as provided in this Section, the Seller shall mail notice of the succession of  
such trustee hereunder to all Securityholders at their addresses as shown in the
Security Register. If the Seller fails to mail such notice within 10 days after 
acceptance of appointment by the successor trustee, the successor trustee shall 
cause such notice to be mailed at the expense of the Seller.                    

         Section 5.09.     Merger or Consolidation of Trustee.

           Any trust company or banking institution into which the
Trustee may be merged or converted or with which it may be consolidated or any  
trust company or banking institution resulting from any merger, conversion or   
consolidation to which the Trustee shall be a party, or any trust company or    
banking institution succeeding to all or substantially all of the corporate     
trust business of the Trustee, shall be the successor of the Trustee hereunder, 
provided such trust company or banking institution shall be eligible under the  
provisions of Section 5.06, 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. The Trustee shall mail notice of any such merger or   
consolidation to the Seller and to the Securityholders at their address as shown
in the Security Register.                                                       

           Section 5.10.     Appointment of Co-Trustee or Separate
Trustee.                                                                        

                (a)      Notwithstanding any other provisions hereof, 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 the same may at the time  
be located, the Trustee shall have the power and shall                          

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execute and deliver all instruments to appoint one or more Persons approved by  
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or   
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust    
Fund, or any part thereof, and, subject to the other provisions of this Section 
5.10, such powers, duties, obligations, rights and trusts as the Trustee may    
consider necessary or desirable. No co-trustee or separate trustee hereunder    
shall be required to meet the terms of eligibility as a successor trustee under 
Section 5.06 hereunder; provided, that if the co-trustee or separate trustee    
does not meet such eligibility standards, the Trustee shall remain liable for   
its actions hereunder, and no notice to Securityholders of the appointment of   
co-trustee(s) or separate trustee(s) shall be required under Section 5.08       
hereof.                                                                         

              (b)      In the case of any appointment of a co-trustee or
separate trustee pursuant to this Section 5.10 all rights, powers, duties and   
obligations conferred or imposed upon the Trustee shall be conferred or imposed 
upon and exercised or performed jointly by the Trustee and such separate trustee
or co-trustee, except to the extent that under any law of any jurisdiction in   
which any particular act or acts are to be performed, the Trustee shall be      
incompetent or unqualified to perform such act or acts, in which event such     
rights, powers, duties and obligations (including the holding of title to the   
Trust Fund or any portion thereof in any such jurisdiction) shall be exercised  
and performed by such separate trustee or co-trustee at the direction of the    
Trustee.                                                                        

              (c)      Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument   
appointing any separate trustee or co-trustee shall refer to this Agreement and 
the conditions of this Article V. 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.                 

                 (d)      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.                                      

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ARTICLE VI

THE DEPOSITOR 

Section 6.01.     Liability of the Seller.  

                 The Seller shall be liable in accordance herewith only to the
extent of the respective obligations specifically imposed upon and undertaken by
the Seller herein.                                                              

                Section 6.02.     Merger, Consolidation or Conversion of the
Seller.                                                                         

               Subject to the following paragraph, the Seller will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation, and will 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 and the Securities and to perform its duties   
under this Agreement.                                                           

             The Seller may be merged or consolidated with or into any
Person, or transfer all or substantially all of its assets to any Person, in    
which case any Person resulting from any merger or consolidation to which the   
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller 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.                                

               Section 6.03.     Limitation on Liability of the Seller and
Others.                                                                         

          Neither the Seller nor any of the directors, officers,
employees or agents of the Seller shall be under any liability to the Trust Fund
or the Securityholders 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 Seller or any such 
other Person against any breach of a representation or warranty made herein, or 
against any expense or liability specifically required to be borne thereby      
pursuant to the terms hereof, or against any liability which would otherwise be 
imposed by reason of willful misfeasance, bad faith or negligence in the        
performance of obligations or duties hereunder, or by reason of reckless        
disregard of such obligations and duties. The Seller and any director, officer, 
employee or agent of the Seller may rely in good faith on any document of any   
kind which, prima facie, is properly executed and submitted by any Person       
respecting any matters arising hereunder. Provided that such action is not      
related to its representations made in or its duties under this Agreement, the  
Seller shall not be under any obligation to appear in, prosecute or defend any  
action or proceeding unless such action in its opinion does not involve it in   
any expense or liability.                                                       

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ARTICLE VII 

TERMINATION 

Section 7.01.     Termination.              

              (a) The respective obligations and responsibilities of the
Seller and the Trustee created hereby with respect to the Securities (other than
the obligation to make certain payments and to send certain notices to          
Securityholders as hereinafter set forth) shall terminate upon the earlier of   
(i) the repurchase by or at the direction of the Seller of all Pooled           
Certificates and Treasury Securities at the Repurchase Price therefor as of the 
date of such repurchase; or (ii) the payment (or provision for payment) to the  
Securityholders of all amounts held by or on behalf of the Trustee and required 
to be paid to them hereunder on the Final Distribution Date following receipt of
the final distribution made on the Pooled Certificates and Treasury Securities; 
or (iii) the Distribution Date following the first Distribution Date on which   
the principal balance of all but one of the Pooled Certificates and Treasury    
Securities has been reduced to zero; provided, however, that in no event shall  
the trust created hereby continue beyond the expiration of twenty-one 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. The right of the Seller or its designee to repurchase all Pooled        
Certificates and Treasury Securities pursuant to Section 7.01(a)(i) shall be    
exercisable only if the aggregate outstanding principal balance of such Pooled  
Certificates and Treasury Securities of the time of any such repurchase is 10%  
or less than their aggregate outstanding principal balance on the Closing Date. 

                  (b)      The Trustee shall give a Notice of Final Distribution
to the Securityholders, the Seller and the Rating Agencies as soon as           
practicable of the Distribution Date on which the Trustee anticipates that the  
final distribution will be made on the Securities, which notice shall:          

                         (i)      specify the Distribution Date on which the
                                    final distribution is anticipated to be made
           to Securityholders;

                   (ii)     specify the amount of any such final
                   distribution, if known; and

                   (iii)    state that the final distribution to
                              Securityholders will be made only upon
                                  presentment and surrender of Securities at
                                    the office of the Trustee therein specified.

If the Trust Fund is not terminated on the anticipated Distribution Date for any
reason, the Trustee shall promptly mail notice thereof to each Securityholder,  
the Seller and to the Rating Agencies.                                          

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                (c)      Upon presentment and surrender of the Securities by
the Securityholders on the Final Distribution Date, the Trustee shall distribute
to the Securityholders the amounts otherwise distributable on such Distribution 
Date pursuant to Section 3.05(a). Any funds not distributed on the Final        
Distribution Date because of the failure of any Securityholders to tender their 
Securities shall be set aside and held in trust for the account of the          
appropriate non-tendering Securityholders, whereupon the Trust Fund shall       
terminate. If any Securities as to which Notice of Final Distribution has been  
given pursuant to this Section 7.01 shall not have been surrendered for         
cancellation within six months after the time specified in such notice, the     
Trustee shall mail a second notice to the remaining Securityholders, at their   
last addresses shown in the Security Register, to surrender their Securities for
cancellation in order to receive, from such funds held, the final distribution  
with respect thereto. If within one year after the second notice any Security   
shall not have been surrendered for cancellation, the Trustee shall directly or 
through an agent, take reasonable steps to contact the remaining Securityholders
concerning surrender of their Securities. If within two years after the second  
notice any Securities shall not have been surrendered for cancellation, the     
Trustee shall segregate all amounts distributable to the Holders thereof and    
shall thereafter hold such amounts for the benefit of such Holders. No interest 
shall accrue or be payable to any Securityholder on any amount held as a result 
of such Securityholder's failure to surrender its Security(s) for final payment 
thereof in accordance with this Section 7.01. The costs and expenses of         
maintaining such funds and of contacting Securityholders shall be paid out of   
the assets which remain held.                                                   

               (d)      If the option by the Seller to repurchase or cause
the repurchase of all Pooled Certificates and Treasury Securities under Section 
7.01(a)(i) above is exercised, the Seller and/or its designee shall deposit in  
the Asset Proceeds Account, by 10:00 a.m., New York City time, on the applicable
Distribution Date, an amount equal to the Repurchase Price for the Pooled       
Certificates and Treasury Securities then remaining in the Trust Fund. Upon the 
presentation and surrender of the Securities, the Trustee, as paying agent,     
shall distribute the Repurchase Price as follows to the extent of such amount:  

              first, to pay the Trustee Fee to the Trustee and any other
                 amounts then due and owing to the Trustee pursuant to Section
5.05(b);                                    

     second, the amount otherwise distributable to the
          Securityholders on such Distribution Date but for such
repurchase;                                 

               third, to the Securityholders as distributions of interest,
          the interest portion included in the Repurchase Price;

                 fourth, to the Securityholders as distributions of principal,
                 the principal portion included in the Repurchase Price, up to
the outstanding Class A-1 Balance; and      

        fifth, to the extent of the balance, if any, of such
               Repurchase Price still remaining, to the Securityholders as
additional distributions of interest.       

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Upon deposit of the required Repurchase Price and delivery to the Trustee of an 
Officer's Certificate from the Seller certifying that such deposit of the       
Repurchase Price in the Asset Proceeds Account has been made, following such    
final Distribution Date, the Trustee shall promptly release to the Seller and/or
its designee, the Pooled Certificates and Treasury Securities, subject to the   
Trustee's obligation to hold any amounts payable to Securityholders in trust    
without interest pending final distributions pursuant to Section 7.01(c).       

             (e) If the principal balance of all but one of the Pooled
Certificates has been reduced to zero as provided in Section 7.01(a)(iii), the  
Trustee shall arrange for the distribution in kind (pro rata based on           
Certificate Principal Balances) to the Securityholders of the remaining Pooled  
Certificate on the Distribution Date following the first Distribution Date on   
which the principal balance of all but such remaining Pooled Certificate has    
been reduced to zero.                                                           

ARTICLE VIII

TAX PROVISIONS

             Section 8.01 Trust Administration. For federal income tax
purposes, the Trust Fund formed pursuant to this Agreement will be classified as
a grantor trust under Subpart E, Part 1 of Subchapter J of the Code and not as  
an association taxable as a corporation.                                        

             (a)      The Seller, the Trustee, and the Securityholders
shall take any action or cause the Trust Fund to take any action necessary to   
create and maintain the status of the Trust Fund as a grantor trust for federal 
income tax purposes and shall assist each other as necessary to create or       
maintain such status.                                                           

             (b)      The Seller, the Trustee, and the Securityholders
shall not take any action or cause the Trust Fund to take any action that could 
endanger the status of the Trust Fund as a grantor trust for federal income tax 
purposes, unless the Trustee and the Seller have received an Opinion of Counsel 
(at the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status.                              

            (c)      The Trustee or its designee may employ counsel,
accountants and professional assistance to aid in the performance of the        
accounting necessary for federal and state tax reporting and compliance or the  
performance of the above powers and duties. The expense incurred by the Trustee 
or its designee in connection with the foregoing shall be reimbursed as part of 
the administrative expenses of the Trust Fund described in Section 5.05 hereof. 

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Section 8.02      Prohibited Activities.    

           (a)     No REMIC election has been or will be made with
respect to the Trust Fund.                                                      

                (b)     Neither the Trustee nor the Seller shall consent to,
approve or enter into any modification of any term of any of the Pooled         
Certificates or the Treasury Securities (including, but not limited to, the     
interest rate, the principal balance, the amortization schedule, the remaining  
term to maturity, or any other term affecting the amount or timing of payments  
on the Pooled Certificates or the Treasury Securities) unless the Trustee has   
received an Opinion of Counsel (as the expense of the party seeking to modify   
any of the Pooled Certificates or the Treasury Securities) to the effect that   
such modification would not be treated as giving rise to a new debt instrument  
for federal income tax purposes.                                                

               (c)     The Trustee shall not sell or dispose of the Pooled
Certificates or the Treasury Securities (except in a disposition pursuant to (i)
the default of any Pooled Certificate or Treasury Security, (ii) the bankruptcy 
of the Trust Fund, (iii) the termination of the Trust Fund as set forth in      
Section 7.01 hereof, or (iv) a disposition of a Pooled Certificate or Treasury  
Security pursuant to Section 2.03(c) or 2.04 hereof), nor acquire any asset for 
the Trust Fund unless it has received an Opinion of Counsel that such sale,     
disposition or acquisition will not affect adversely the status of the Trust    
Fund as a grantor trust under the Code.                                         

ARTICLE IX

MISCELLANEOUS PROVISIONS

Section 9.01.     Amendment.                

               (a)      This Agreement may be amended from time to time by
the Seller and the Trustee, without the prior consent of any Securityholder:    

     (i)      to cure any ambiguity;

                         (ii) to correct or supplement any provisions herein
               which may be inconsistent with any other provisions herein;

                        (iii) to make any other provisions with respect to
                 matters or questions arising under this Agreement which shall
                  not be materially inconsistent with the existing provisions of
this Agreement; and                         

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                         (iv) to make such modifications as may be permitted
            or required hereunder in connection with a repurchase or
             substitution of a Pooled Certificate or Treasury Security
pursuant to Section 2.03(c) or 2.04 hereof. 

provided that such amendment shall not, as evidenced by an Opinion of Counsel   
(at the expense of the party seeking such amendment) delivered to the Trustee   
(the expense of which shall be paid for by the Seller), adversely affect in any 
material respect the interests of any Securityholder. Counsel shall be entitled 
to rely on a letter from each Rating Agency that the modification will not cause
the then-existing rating of the Securities to be downgraded as conclusive       
evidence that the modification does not adversely affect in any material respect
the interests of any Securityholder.                                            

                 (b)      This Agreement may also be amended from time to time
by the Seller and the Trustee with the prior written consent of the Majority    
Securityholders 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 Securityholders; provided, however, that no such   
amendment shall:                                                                

                          (i) reduce in any manner the amount of, or delay the
               timing of, payments which are required to be distributed on
          any Security without the consent of the Holder of such
Security;                                   

                     (ii) modify the provisions of this Section 9.01
            without the consent of the Holders of all Securities; or

                           (iii) be made unless and until the Trustee shall have
               received an Opinion of Counsel (at the expense of the party
                seeking such amendment but in no event at the expense of the
           Trust Fund) to the effect that such amendment shall not
               adversely affect the status of the Trust as a grantor trust
for federal income tax purposes.            

               (c)      Promptly after the execution of any such amendment
the Trustee shall furnish written notification of the substance of such         
amendment to each Securityholder. It shall not be necessary for the consent of  
Securityholders under this Section 9.01 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 Securityholders shall be subject to   
such reasonable regulations as the Trustee may prescribe.                       

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Section 9.02.     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 9.03.     Limitation on Rights of Securityholders.

                (a)      The death or incapacity of any Securityholder shall
not operate to terminate this Agreement or the Trust Fund, nor entitle such     
Securityholder's legal representatives or heirs to claim an accounting or to    
take any action or proceeding in any court for a partition or winding up of the 
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the 
parties hereto or any of them.                                                  

           (b)      No Securityholder shall have any right to vote
(except as expressly provided for 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   
Securities, be construed so as to constitute the Securityholders from time to   
time as partners or members of an association; nor shall any Securityholder 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.                     

                (c)      No Securityholder shall have any right by virtue of
any provision of this Agreement to institute any suit, action or proceeding in  
equity or at law upon or under or with respect to this Agreement, unless such   
Holder previously shall have given to the Trustee and the Seller a written      
notice of default hereunder, and of the continuance thereof, as herein-before   
provided, and unless the Majority Securityholders also shall have made written  
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable 
indemnity as it may require against the costs, expenses and liabilities to be   
incurred therein or thereby, and the Trustee, for 30 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. For the prosecution and          
enforcement of the rights granted under this Section, each and every            
Securityholder and the Trustee shall be entitled to such relief as can be given 
either at law or in equity.                                                     

Section 9.04.     Governing Law.            

           This Agreement and the Securities shall be construed in
accordance with the laws of the State of New York applicable to agreements made 
and to be performed in said state (without reference to the conflicts of law    
provisions of such state), and the obligations, rights and remedies of the      
parties hereunder and the Securityholders shall be determined in accordance with
such laws.                                                                      

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Section 9.05.     Notices.                  

                All communications provided for or permitted hereunder shall
be in writing and shall be deemed to have been duly given when delivered to: (a)
in the case of the Seller, Financial Asset Securitization, Inc., 901 East Byrd  
Street, Richmond, Virginia 23219, Attention: President, or such other address as
may hereafter be furnished to the Trustee in writing by the Seller; (b) in the  
case of the Trustee, Norwest Bank Minnesota, National Association, Sixth &      
Marquette Streets, Minneapolis, Minnesota 55479, Attention: FASI 1997-1, with a 
copy to the Trustee at 11000 Broken Land Parkway, Columbia, Maryland 21044,     
Attention: FASI 1997-1 or such other address as may hereafter be furnished to   
the Seller in writing by the Trustee; (c) in the case of Moody's, Moody's       
Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention: 
Mortgage Pass-Through Monitoring Group; and (d) in the case of Fitch Investors  
Service, L.P., One State Street Plaza, 34th Floor, New York, New York 10004.    

 Section 9.06.     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 Securities or the rights of the Holders thereof.       

Section 9.07.     Successors and Assigns.   

              The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties    
hereto, and all such provisions shall inure to the benefit of the               
Securityholders.                                                                

   Section 9.08.     Article and Section Headings.

                  The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.     

 Section 9.09.     Notices to Rating Agencies.

                  The Trustee shall notify each Rating Agency at such time as it
is otherwise required pursuant to this Agreement to give notice of the          
occurrence of any of the events described in clauses (a), (b), (d), or (f) below
or provide a copy to each Rating Agency at such time as otherwise required to be
delivered pursuant to this Agreement of each of the statements described in     
clauses (c) and (e) below:                                                      

              (a)      a material change or amendment to this Agreement,

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          (b)      the termination or appointment of a successor
Trustee,                

              (c)      the monthly distribution statement required to be
                          delivered to the Securityholders pursuant to Section
3.06,                     

             (d)      the non-conformance of any documents pursuant to
Section 5.01(a),          

            (e)      the Notice of Final Distribution required to be
                delivered pursuant to Section 7.01(b), and

           (f)      a change in the location of the Asset Proceeds
                Account or the Trustee Fee Escrow Account.

               The Seller shall notify each Rating Agency of any change in
its identity.                                                                   

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              IN WITNESS WHEREOF, the Seller and the Trustee have caused
their names to be signed hereto by their respective duly authorized officers,   
all as of the day and year first above written.                                 

                         FINANCIAL ASSET SECURITIZATION, INC., as Seller

  By:  /s/William E. Hardy
       -------------------
           Name:  William E. Hardy
                      Title:    Executive Vice President

            NORWEST BANK MINNESOTA, NATIONAL
   ASSOCIATION, as Trustee

       By:   /s/Peter J. Masterman
             ---------------------
     Name:  Peter J. Masterman
    Title:    Vice President

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STATE OF VIRGINIA)                                                              
ss:                                     
COUNTY OF RICHMOND)                                                             

                On the 30 day of October, 1997 before me, a notary public in
and for said State, personally appeared William Hardy known to me to be the EVP 
of Financial Asset Securitization Inc., the corporation that executed the within
instrument, and also knoPwn to me to be the person who executed it on behalf of 
said corporation, and acknowledged to me that such corporation executed the     
within instrument.                                                              

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.         

                                        /s/ Wendy R. Manthorpe
                                        ----------------------
                                               Notary Public Commissioned as
                                 Wendy R. Mayhew

[Notarial Seal]                             Commission Expires: My commission   

                                                 Expires February 28, 2000

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STATE OF NEW YORK    )                                                          
:   ss:                               
COUNTY OF NEW YORK)                                                             

                On the 30 day of October, 1997 before me, a notary public in
and for said State, personally appeared Peter M. Masterman known to me to be a  
Vice President of Norwest Bank Minnesota, National Association, the national    
banking association that executed the within instrument, and also known to me to
be the person who executed it on behalf of said national banking association,   
and acknowledged to me that such national banking association executed the      
within instrument.                                                              

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.         

                                                  /s/ Maureen C. Marry
                                                  --------------------
                                           Notary Public

[Notarial Seal]                            Commission Expires:                  

                                      Notary Public, State of New York
                    No. 41-4668664
                                Qualified in Queens County
                                      Commission Expires July 31, 1998

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 EXHIBIT A
FORM OF CLASS A-1 SECURITY

       THIS SECURITY DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN,
FINANCIAL ASSET SECURITIZATION, INC. OR THE TRUSTEE REFERRED TO BELOW OR ANY OF 
THEIR RESPECTIVE AFFILIATES AND IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.                                                      
         THE CURRENT PRINCIPAL BALANCE OF THIS SECURITY WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE   
SECURITIES, THE CURRENT PRINCIPAL AMOUNT OF THIS SECURITY WILL BE DIFFERENT FROM
THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS SECURITY MAY ASCERTAIN ITS  
CURRENT PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.               
      UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF     
TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITIES ISSUED IS REGISTERED IN THE   
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED             
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO   
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN    
INTEREST HEREIN.                                                                
MORTGAGE PARTICIPATION
SECURITIES, 
No. A-1-1                                                       SERIES 1997-1   
 evidencing a beneficial interest in a Trust
       consisting primarily of the Pooled Certificates and Treasury Securities
(as defined in the Agreement)                                   

FINANCIAL ASSET SECURITIZATION, INC.

CUSIP No. 31738VCJ2 

                                                        [Enlarge/Download Table]
                                                                                                          

Class                            :  A-1                                                                   
First Distribution Date          :  November 25, 1997             Initial Principal Amount                
Assumed Final Distribution Date  :  October 25, 2027                of this Security                      
                                                                     ("Denomination")       :  $55,809,878
Approximate Original Class                                                                                
   Principal Amount              :  $55,809,878                                                           
Pass-Through  Rate               :  The effective per annum                                               
                                    interest rate borne by the                                            
                                    Securities during the Interest                                        
                                    Accrual Period with respect to                                        
                                    a Distribution Date will equal                                        
                                    a fraction, expressed as a                                            
                                    percentage truncated at the                                           
                                    fourth decimal place, the                                             
                                    numerator of which is equal to                                        
                                    the aggregate amount in respect                                       
                                    of interest paid to the                                               
                                    Securityholders for the related                                       
                                    Interest Accrual Period                                               
                                    multiplied by 12, and the                                             
                                    denominator of which is the                                           
                                    principal amount of the                                               
                                    Securities immediately prior to                                       
                                    such Distribution Date.                                               

THIS CERTIFIES THAT                                                             

is the registered owner of the Percentage Interest evidenced hereby in the      
beneficial ownership interest of Securities of the same Class as this Security  
in a Trust (the "Trust") consisting primarily of a portion of certain classes of
securities described in the Agreement (the "Pooled Certificates") sold by       
Financial Asset Securitization, Inc. ("FASI"). The Trust was created pursuant to
the Pooling Agreement dated as of October 1, 1997 (the "Agreement"), between    
FASI, as Seller, and Norwest Bank Minnesota, National Association, as trustee   
(the "Trustee"), a summary of certain of the pertinent provisions of which is   
set forth hereafter. To the extent not defined herein, capitalized terms used   
herein shall have the meaning ascribed to them in the Agreement. This Security  
is issued under and is subject to the terms, provisions and conditions of the   
Agreement, to which Agreement the Holder of this Security by virtue of its      
acceptance hereof assents and by which such Holder is bound.                    

   Interest on this Security will accrue during the one month period beginning
on the first day and ending on the last day of the month preceding the month of 
the Distribution Date (as hereinafter defined) at a per annum rate equal to the 
Pass Through Rate as set forth above. Distributions of principal and interest on
the Securities with respect to a month will be made on the 25th day of such     
month (each, a "Distribution Date") or, if such day is not a Business Day (as   
defined herein), then on the next succeeding Business Day. A "Business Day"     
means a day other than a Saturday, a Sunday or a day on which banking           
institutions in New York, New York or the city in which the corporate trust     
office of the Trustee is located are authorized or obligated by law or executive
order to be closed. In addition, if the Trustee has not received a distribution 
on, or the distribution information with respect to, any of the Pooled          
Certificates by noon, Eastern Standard Time, on the Distribution Date (the      
"Determination Time"), the distribution allocable to such Pooled Certificates   
will not be made on the Distribution Date, but (i) if such distribution and such
distribution information are received by noon, Eastern Standard Time, on the    
third Business Day after the Determination Time, it will be made on the third   
Business Day after the Determination Time, or (ii) if received after noon,      
Eastern Standard Time, on the third Business Day after the Determination Time,  
it will be made on the next succeeding Distribution Date, and in neither case   
will additional interest be paid thereon. Distributions will be made on each    
Distribution Date to holders of record as of the close of business on the last  
Business Day of the calendar month preceding the month in which such            
Distribution Date occurs; provided that for this purpose the Distribution Date  
is deemed to occur on the 25th of each month, without regard to whether such day
is a Business Day. The assumed Final Distribution Date is the Distribution date 
in October 2027.                                                                

  Distributions on this Security will be made by the Trustee by check mailed
to the address of the Person entitled thereto as such name and address shall    
appear on the Security Register or, if such Person so requests by notifying the 
Trustee in writing as specified in the Agreement and if such Person holds       
Securities with an initial aggregate initial Security Balance of not less than  
$1,000,000, by wire transfer in immediately available funds to the account      
specified in writing by such Person to the Trustee. Notwithstanding the above,  
the final distribution on this Security will be made after due notice by the    
Trustee of the pendency of such distribution and only upon presentation and     
surrender of this Security at the office or agency appointed by the Trustee for 
that purpose and designated in such notice.                                     

IN WITNESS WHEREOF, the Trustee has caused this Security to be duly     
executed.                                                                       

Dated:  October 30, 1997                                                        

                               NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
                                      Not in its individual capacity but
                     solely as Trustee

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

This is one of the Class A-1 Securities referred to in the within-mentioned     
Agreement.                                                                      

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Certificate Registrar          

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

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FINANCIAL ASSET SECURITIZATION, INC.
MORTGAGE PARTICIPATION SECURITIES, SERIES 1997-1

This Security is one of a duly authorized issue of Securities 
designated as set forth on the face hereof (the "Securities"). The Securities,  
in the aggregate, evidence the entire beneficial ownership interest in the Trust
formed pursuant to the Agreement.                                               

         The Securityholder, by its acceptance of this Security,  agrees that it
will look soley to the Trust for payment hereunder and that the Trustee is not  
liable to the Securityholders for any amount payable under this Security or     
the Agreement or, except as expressly provided in the Agreement, subject to any 
liability under the Agreement.                                                  

       This Security does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,   
benefits, obligations and duties evidenced hereby, and the rights, duties and   
immunities of the Trustee.                                                      

         The Agreement  permits,  with certain  exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights of the Securityholders
under the  Agreement  from time to time by the  Seller  and  the  Trustee  with 
the  consent  of the Holders of  Securities  evidencing  more than 50% of the   
aggregate Class  Balance of the  Securities.  Any such consent by the Holder of 
this Securities  shall be conclusive and binding on such Holder and upon all    
future  Holders of this  Security and of any Security issued upon the transfer  
hereof or in lieu hereof  whether or not notation  of  such  consent  is  made  
upon  this  Security.   The Agreement also permits the amendment  thereof,  in  
certain limited circumstances,  without  the  consent of the Holders of any of  
the Securities.                                                                 

       As  provided  in the  Agreement  and  subject  to certain limitations
therein set forth,  the transfer of this  Security is registrable  with the     
Trustee upon  surrender of this Security for registration of transfer at the    
offices or agencies  maintained by the Trustee in the City of Minneapolis, State
of Minnesota,  duly endorsed by, or  accompanied  by a written  instrument of   
transfer in form  satisfactory  to the Trustee duly  executed by the Holder     
hereof or such Holder's  attorney duly authorized in writing,  and thereupon one
or more new  Securities in authorized  denominations representing a like        
aggregate  principal  amount will be issued to the designated transferee.       

   The Securities are issuable only as registered Securities without
coupons in Classes and denominations specified in the Agreement. As provided in 
the Agreement and subject to certain limitations therein set forth, this        
Security is exchangeable for one or more new Securities of the same Class and   
evidencing the same aggregate Percentage Interest, as requested by the Holder   
surrendering the same.                                                          

  No service charge will be made to the Securityholders for any such
registration of transfer, but the Trustee may require payment of a sum          
sufficient to cover any tax or other governmental charge payable in connection  
therewith. The Security Registrar and the Trustee and any agent of any of them  
may treat the Person in whose name the Security is registered as the owner      
hereof for all purposes, and neither the Security Registrant, the Trustee nor   
such agent shall be affected by notice in the contrary.                         

 Any purchaser of this Security, by virtue of its purchase of this
Security, will be deemed to have represented either that (i) it is not a Plan or
(ii) an exemption granted by the Department of Labor applies that exempts the   
acquisition, holding or transfer of this Security by such purchaser from        
prohibited transaction rules of ERISA and the related excise tax provisions of  
the Code.                                                                       

         Beginning  on the  Distribution  Date in November  1998, holders of a
minimum of 10% of the  outstanding  principal  amount of the  Securities  will  
be entitled to exchange  such  Securities for a pro rata  portion  of each of   
the  Pooled  Certificates  and Treasury  Securities.  Holders of Securities to  
be exchanged  will be charged an exchange fee by the Trustee  equal to the      
greater of (i) $500 and (ii)  0.02% of the  outstanding  principal  amount of   
such  Securities.  Holders will be required to provide the Trustee with         
irrevocable  written  notice as provided  in the  Agreement, accompanied  by the
exchange  fee,  of any  proposed exchange of Securities  at least five Business 
Days prior to the proposed date of such exchange, which must be a Business Day. 

      The  obligations created by the  Agreement and the Trust created
 thereby (other than the obligations  to make  certain payments and send certain
 notices to Securityholders  with respect to the  termination  of the Agreement)
shall terminate upon the earlier of (i) the repurchase by or at the direction 
of the Seller of all Pooled  Certificates  and  Treasury Securities, if any,  
under the circumstances set forth in the Agreement;  (ii) the payment (or     
provision for payment) to the  Securityholders of all amounts held by or on   
behalf of the Trustee and required to be paid to them under the Agreement on  
the Final Distribution Date following receipt of the final distribution to be 
made on the Pooled Certificates and Treasury Securities; or (iii) the         
Distribution Date following the first Distribution Date on which only one of  
the Pooled Certificates remains entitled to payments of principal and/or      
interest. In no event, however, will the Trust created by the Agreement       
continue beyond the expiration of 21 years after the death of certain persons 
identified in the Agreement                                                   

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and   

transfer(s) unto                                                    
             -------------------------------------------------

------------------------------------------------------------------------        
(Please print or typewriter name and address including postal zip code assignee)

the within Security and hereby authorizes the transfer of registration of such  
interest to the assignee on the Security Register of the Trust Fund.            

     I (We) further direct the Security Registrar to issue a new Security of a
like denomination and Class, to the above named assignee and deliver such       
Security to the following address:                                              

Dated:                                                                          

                                   -------------------------------------
                                   Signature by or on behalf of assignor

                                   -------------------------------------
                            Signature Guaranteed

DISTRIBUTION INSTRUCTIONS 

The assignee should include the following for                         
purposes of distribution:                                             
                          --------------------------------------------

Distributions shall be made, by wire transfer or                                
otherwise, in immediately available funds to                                    
                                        --------------------------------

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

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

account number                , or, if mailed by check to                       
         ---------------                            ------------------

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

Applicable statements should be mailed to                                       
                                    ----------------------------------
This information is provided by                                                 
                          --------------------------------------------
the assignee named above, or                                                    
                         ---------------------------------------------
as its agent.                                                                   

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EXHIBIT B 

FORM OF OPTION EXERCISE NOTICE

Date:                                                                           

Norwest Bank Minnesota, National Association                                    
Sixth & Marquette Streets                                                       
Minneapolis, Minnesota  55479                                                   

Re:      Financial Asset Securitization, Inc.                                   
Mortgage Participation Securities                             
Series 1997-1 CUSIP No.:                                      

Ladies and Gentlemen:                                                           

        Reference is made to the Pooling Agreement dated as of October 1, 1997
between Financial Asset Securitization, Inc., Seller, and Norwest Bank          
Minnesota, National Association, Trustee (the "Agreement"). Terms defined in the
Agreement shall have the same meaning when used herein, except as otherwise     
provided.                                                                       

        The undersigned desires to exchange Securities for Pooled Certificates
and Treasury Securities as provided in Section 4.05 of the Agreement.  Set forth
below is information pertinent to the exchange:                                 

Principal Amount of Securities held by the undersigned:     $                   

Principal Amount of Securities to be Exchanged:             $                   

Participant Number in The Depository Trust                                      
Company:                                                                        

Federal Reserve Bank Delivery Instructions:                                     

Proposed Exchange Date:                                                         

      [Accompanying this letter is a certified check  in the amount of the
Option Exercise Fee.]                                       

        [The Option Exercise Fee  will be paid by wire transfer of immediately
      available funds to the amount of the Trustee at                  not
later than the close of business on the date hereof.]         

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         A copy of this letter will be delivered to The Depository Trust Company
not later than the close of business on the date hereof.                        

 The undersigned understands that this Option Exercise Notice is
irrevocable.                                                                    

Very truly yours,                                                               

[Name]                                                                          

By:                                                                             
--------------------                                                      
Title:                                                                          
------------------                                                    
Signature Guaranteed:                                                           

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SCHEDULE A

POOLED CERTIFICATES 

                                                        [Enlarge/Download Table]


                                                                         Current Principal  
Full Name of Series                                       % of Class           Balance      
----------------------------------                     ----------------   ------------------

Pooled FHLMC Certificates                                                                   
                                                                                            
   Multiclass Mortgage Participation Certificates,          33.96%          $702,795.17     
   Series G003, Class SA                                                                    

   Multiclass Mortgage Participation Certificates,          100.00%         $384,309.90     
   Series G020, Class SB                                                                    

   Multiclass Mortgage Participation Certificates,          31.43%          $221,374.78     
   Series 1041, Class F                                                                     

   Multiclass Mortgage Participation Certificates,          26.67%          $145,332.90     
   Series 1385, Class S                                                                     

   Multiclass Mortgage Participation Certificates,          71.22%         $3,184,158.32    
   Series 1435, Class SB                                                                    

   Multiclass Mortgage Participation Certificates,          54.60%        $10,073,742.81    
   Series 1483, Class FD                                                                    

   Multiclass Mortgage Participation Certificates,          86.67%         $4,212,204.78    
   Series 1504, Class FA                                                                    

   Multiclass Mortgage Participation Certificates,           5.58%          $555,580.32     
   Series 1578, Class SC                                                                    

   Multiclass Mortgage Participation Certificates,           4.81%          $597,977.28     
   Series 1585, Class PM                                                                    

Pooled FNMA Certificates                                                                    

   Guaranteed REMIC Pass-Through Certificates,               3.33%          $268,807.98     
   Fannie Mae REMIC Trust 1993-41, Class SA                                                 

   Guaranteed REMIC Pass-Through Certificates,              48.29%         $7,961,315.64    
   Fannie Mae REMIC Trust, 1993-56, Class SB                                                

   Guaranteed REMIC Pass-Through Certificates,              15.55%          $640,181.76     
   Fannie Mae REMIC Trust, 1993-60, Class SB                                                

   Guaranteed REMIC Pass-Through Certificates,              24.53%          $579,380.20     
   Fannie Mae REMIC Trust, 1993-113, Class SF                                               

   Guaranteed REMIC Pass-Through Certificates,               8.31%          $155,416.30     
   Fannie Mae REMIC Trust, 1993-120, Class SP                                               

   Guaranteed REMIC Pass-Through Certificates, Fannie        2.68%          $125,620.63     
   Mae REMIC Trust 1993-179, Class SX                                                       

   Guaranteed REMIC Pass-Through Certificates, Fannie        0.86%          $198,824.59     
   Mae REMIC Trust 1994-17, Class S                                                         


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                                                        [Enlarge/Download Table]

                                                                                        

   Guaranteed REMIC Pass-Through Certificates, Fannie          52.60%      $9,503,692.48
   Mae REMIC Trust 1997-44, Class Z                                                     

   Guaranteed REMIC Pass-Through Certificates, Fannie          53.10%     $11,299,162.25
   Mae REMIC Trust 1997-57, Class ZH                                                    

                              TREASURY SECURITIES                                       

                Designation         Principal Amount       Due Date                     
                -----------         ----------------       --------                     

United States Treasury Security        $1,250,000      February 15, 1998                
United States Treasury Security        $1,250,000       August 15, 1998                 
United States Treasury Security        $1,250,000      February 15, 1999                
United States Treasury Security        $1,250,000       August 15, 1999                 

Dates Referenced Herein

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		10/25/27		53					None on these Dates
		2/28/00		51
		8/15/99		15		58
		2/15/99		15		58
		8/15/98		15		58
		7/31/98		52
		2/15/98		15		58
		11/25/97		6		53
Filed on:		11/5/97
For Period End:		10/30/97		5		53
		10/28/97		12
		10/1/97		1		55
									List all Filings