Exhibit 1.2

                      MERRILL LYNCH, PIERCE, FENNER & SMITH
                                  INCORPORATED

              PREFERREDPLUS 8.375% TRUST CERTIFICATES SERIES CZN-1

                                 TERMS AGREEMENT
                                 ---------------


                                                                 August 24, 2001


To:      Merrill Lynch Depositor, Inc.
         World Financial Center
         North Tower
         New York, New York 10281
         Attention: Barry N. Finkelstein


Ladies and Gentlemen:

         We understand that Merrill Lynch Depositor, Inc., a Delaware
corporation (the "Company"), proposes to issue and sell 1,380,000 PreferredPLUS
8.375 % Trust Certificates Series CZN-1 at a $25 Stated Amount per Trust
Certificate (the "Underwritten Securities").

         Subject to the terms and conditions set forth below and subject to the
terms of the Purchase Agreement which are incorporated by reference herein, we
offer to purchase the principal amount of Underwritten Securities at the
purchase price set forth below.

         The Underwritten Securities shall have the following terms:


Title:  PreferredPLUS 8.375% Trust Certificates Series CZN-1

Ratings:  BBB from Standard & Poor's and Baa2 from Moody's

Amount: 1,380,000 Trust Certificates

Denominations:  $25 and integral multiples thereof

Currency of payment:  U.S. dollars

Distribution rate or formula: Holders of Trust Certificates will be entitled to
distributions at 8.375% per annum through October 1, 2046, unless the Trust
Certificates are redeemed or called prior to such date.

Cut-off Date:  August 29, 2001


Distribution payment dates: April 1 and October 1, commencing October 1, 2001

Regular record dates: As long as the Underlying Securities are represented by
one or more global certificated securities, the record day will be the close of
business on the Business Day prior to the relevant distribution payment dates,
unless a different record date is established for the Underlying Securities. If
the Underlying Securities are no longer represented by one or more global
certificated securities, the distribution payment date will be at least one
Business Day prior to the relevant distribution payment dates.

Stated maturity date:  October 1, 2046

Sinking fund requirements:  None

Conversion provisions:  None

Listing requirements:  Listed on the New York Stock Exchange

Black-out provisions:  None

Fixed or Variable Price Offering: Fixed Price Offering

Purchase price:  $25 per Trust Certificate

Form: Book-entry Trust Certificates with The Depository Trust Company, except in
certain limited circumstances

Closing date and location: August 29, 2001, Shearman & Sterling, 599 Lexington
Avenue, New York, New York



         Please accept this offer no later than 10:00 A.M. (New York City time)
on August 24, 2001 by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.

                                    Very truly yours,

                                    MERRILL LYNCH, PIERCE, FENNER & SMITH
                                    INCORPORATED

                                    By      /s/ Barry N. Finkelstein
                                       -----------------------------------
                                              Authorized Signatory




Accepted:

MERRILL LYNCH DEPOSITOR, INC.


By   /s/  Barry N. Finkelstein
   -----------------------------
   Name:  Barry N. Finkelstein
   Title: President