EXHIBIT

<PAGE>

                   STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,

                                     SELLER

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,

                                     TRUSTEE




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


                         POOLING AND SERVICING AGREEMENT

                          Dated as of December 1, 2000

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



                   Structured Asset Mortgage Investments Inc.
           Bear Stearns ARM Trust, Mortgage Pass-Through Certificates

                                  Series 2000-1

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
                                                     ARTICLE I

                                                    Definitions


                                                    ARTICLE II

                                           Conveyance of Mortgage Loans;
                                         Original Issuance of Certificates

         Section 2.01.     CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE...............................................26
         Section 2.02.     ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE...............................................28
         Section 2.03.     ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE AGREEMENT........................29
         Section 2.04.     SUBSTITUTION OF MORTGAGE LOANS........................................................30
         Section 2.05.     ISSUANCE OF CERTIFICATES..............................................................31
         Section 2.06.     REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER..................................32

                                                    ARTICLE III

                                  Administration and Servicing of Mortgage Loans

         Section 3.01.     MASTER SERVICER.......................................................................34
         Section 3.02.     REMIC-RELATED COVENANTS...............................................................34
         Section 3.03.     REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.................................35
         Section 3.04.     UCC...................................................................................35

                                                    ARTICLE IV

                                                     Accounts

         Section 4.01.     CERTIFICATE ACCOUNT...................................................................36
         Section 4.02.     PERMITTED WITHDRAWALS AND TRANSFERS FROM THE CERTIFICATE ACCOUNT......................37

                                                     ARTICLE V

                                                   Certificates

         Section 5.01.     CERTIFICATES..........................................................................38
         Section 5.02.     REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.................................42
         Section 5.03.     MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.....................................46
         Section 5.04.     PERSONS DEEMED OWNERS.................................................................46
         Section 5.05.     TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES........................................46
         Section 5.06.     RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES.......................................47


                                       -i-

<PAGE>



         Section 5.07.     ERISA RESTRICTIONS....................................................................48
         Section 5.08.     RULE 144A INFORMATION.................................................................49

                                                    ARTICLE VI

                                          Payments to Certificateholders

         Section 6.01.     DISTRIBUTIONS ON THE CERTIFICATES.....................................................50
         Section 6.02.     ALLOCATION OF LOSSES..................................................................52
         Section 6.03.     PAYMENTS..............................................................................54
         Section 6.04.     STATEMENTS TO CERTIFICATEHOLDERS......................................................54
         Section 6.05.     MONTHLY ADVANCES......................................................................57

                                                    ARTICLE VII

                                                  Indemnification

         Section 7.01.     INDEMNIFICATION OF THE TRUSTEE........................................................58

                                                   ARTICLE VIII

                                                      Default

         Section 8.01.     EVENTS OF DEFAULT.....................................................................59
         Section 8.02.     TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR..............................................59
         Section 8.03.     NOTIFICATION TO CERTIFICATEHOLDERS....................................................60
         Section 8.04.     WAIVER OF DEFAULTS....................................................................60
         Section 8.05.     LIST OF CERTIFICATEHOLDERS............................................................60

                                                    ARTICLE IX

                                              Concerning the Trustee

         Section 9.01.     DUTIES OF TRUSTEE.....................................................................61
         Section 9.02.     CERTAIN MATTERS AFFECTING THE TRUSTEE.................................................62
         Section 9.03.     TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.................................64
         Section 9.04.     TRUSTEE MAY OWN CERTIFICATES..........................................................65
         Section 9.05.     TRUSTEE'S FEES AND EXPENSES...........................................................65
         Section 9.06.     ELIGIBILITY REQUIREMENTS FOR TRUSTEE..................................................65
         Section 9.07.     INSURANCE.............................................................................65
         Section 9.08.     RESIGNATION AND REMOVAL OF THE TRUSTEE................................................65
         Section 9.09.     SUCCESSOR TRUSTEE.....................................................................66
         Section 9.10.     MERGER OR CONSOLIDATION OF TRUSTEE....................................................67
         Section 9.11.     APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.........................................67
         Section 9.12.     FEDERAL INFORMATION RETURNS AND REPORTS TO CERTIFICATEHOLDERS; REMIC
                           ADMINISTRATION........................................................................68


                                      -ii-

<PAGE>



         Section 9.13.     MAINTENANCE OF PMI POLICY; COLLECTIONS THEREUNDER.....................................69

                                                     ARTICLE X

                                                    Termination

         Section 10.01.    TERMINATION UPON REPURCHASE BY THE SELLER OR ITS DESIGNEE OR LIQUIDATION OF THE
                           MORTGAGE LOANS........................................................................71
         Section 10.02.    ADDITIONAL TERMINATION REQUIREMENTS...................................................73

                                                    ARTICLE XI

                                             Miscellaneous Provisions

         Section 11.01.    INTENT OF PARTIES.....................................................................74
         Section 11.02.    AMENDMENT.............................................................................74
         Section 11.03.    RECORDATION OF AGREEMENT..............................................................75
         Section 11.04.    LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS............................................75
         Section 11.06.    GOVERNING LAW.........................................................................77
         Section 11.07.    NOTICES...............................................................................77
         Section 11.08.    SEVERABILITY OF PROVISIONS............................................................77
         Section 11.09.    SUCCESSORS AND ASSIGNS................................................................77
         Section 11.10.    ARTICLE AND SECTION HEADINGS..........................................................77
         Section 11.11.    COUNTERPARTS..........................................................................77
         Section 11.12.    NOTICE TO RATING AGENCIES.............................................................78
</TABLE>



                                      -iii-

<PAGE>



                                    EXHIBITS

Exhibit A-1       -        Form of Class A Certificates
Exhibit A-2       -        Form of Class B Certificates
Exhibit A-3       -        Form of Class R Certificates
Exhibit B         -        Mortgage Loan Schedule
Exhibit C         -        Representations and Warranties of EMC Concerning
                              the Mortgage Loans
Exhibit D         -        Request for Release of Documents
Exhibit E         -        Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1       -        Form of Investment Letter
Exhibit F-1       -        Form of Rule 144A and Related Matters Certificate
Exhibit G         -        Form of Initial Certification
Exhibit H         -        Form of Final Certification
Exhibit I         -        Bank of America Servicing Agreements
Exhibit J         -        PMI Policy from PMI Insurer



                                      -iv-

<PAGE>



                         POOLING AND SERVICING AGREEMENT
                         -------------------------------


         Pooling and Servicing Agreement dated as of December 1, 2000, between
Structured Asset Mortgage Investments Inc., a Delaware corporation, as seller
(the "Seller") and Wells Fargo Bank Minnesota, National Association, a national
banking association, not in its individual capacity but solely as trustee (the
"Trustee").

                              PRELIMINARY STATEMENT

         On or prior to the Closing Date, the Seller has acquired the Mortgage
Loans from EMC Mortgage Corporation ("EMC"). On the Closing Date, the Seller
will sell the Mortgage Loans and certain other property to the Trust Fund and
receive in consideration therefor Certificates evidencing the entire beneficial
ownership interest in the Trust Fund.

         The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC I Regular Interests will be designated
"regular interests" in such REMIC and the Class R-I Certificate will be
designated the "residual interests" in such REMIC.

         The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all the Classes of REMIC II Regular Certificates will
be designated "regular interests" in such REMIC and the Class R-II Certificate
will be designated the "residual interests" in such REMIC.

         The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $1,056,472,829. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance.

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

                                    ARTICLE I

                                   Definitions

         Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.

         ACCOUNT: The Certificate Account and the Protected Account as the
context may require.

         ACCRUED CERTIFICATE INTEREST: For any Certificate for any Distribution
Date, the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount, or in the case of
the Class I-A-IO Certificates, the Notional Amount, of such Certificate
immediately prior to such Distribution Date, calculated on the basis of a
360-day year


                                       -1-

<PAGE>



consisting of twelve 30-day months, less (i) in the case of a Senior
Certificate, such Certificate's share of any Net Interest Shortfall and, after
the Cross-Over Date, the interest portion of any Realized Losses on the Mortgage
Loans allocated thereto in accordance with Section 6.02(g) and (ii) in the case
of a Subordinate Certificate, such Certificate's share of any Net Interest
Shortfall and the interest portion of any Realized Losses on the Mortgage Loans
allocated thereto in accordance with Section 6.02(g).

         AFFILIATE: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.

         AGGREGATE EXPENSE RATE: With respect to any Mortgage Loan, the sum of
the Servicing Fee Rate and the PMI Insurance Premium Rate (if applicable).

         AGGREGATE SUBORDINATE PERCENTAGE: As of any date of determination, a
fraction, expressed as a percentage, the numerator of which is the aggregate
Current Principal Amount of the Subordinate Certificates as of such date of
determination and the denominator of which is the aggregate Scheduled Principal
Balance of the Mortgage Loans in all Loan Groups as of such date of
determination.

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

         ALLOCABLE SHARE: With respect to each Class of Subordinate
Certificates:

                  (a) as to any Distribution Date and amounts distributable
         pursuant to clauses (i) and (iii) of the definition of Subordinate
         Optimal Principal Amount, the fraction, expressed as a percentage, the
         numerator of which is the Current Principal Amount of such Class and
         the denominator of which is the aggregate Current Principal Amount of
         all Classes of the Subordinate Certificates; and

                  (b) as to any Distribution Date and amounts distributable
         pursuant to clauses (ii), (iv) and (v) of the definition of Subordinate
         Optimal Principal Amount, and as to each Class of Subordinate
         Certificates (other than the Class of Subordinate Certificates having
         the lowest numerical designation as to which the Class Prepayment
         Distribution Trigger shall not be applicable) for which (x) the related
         Class Prepayment Distribution Trigger has been satisfied on such
         Distribution Date, the fraction, expressed as a percentage, the
         numerator of which is the Current Principal Amount of such Class and
         the denominator of which is the aggregate Current Principal Amount of
         all such Classes of Subordinate Certificates and (y) the related Class
         Prepayment Distribution Trigger has not been satisfied on such
         Distribution Date, 0%; provided that if on a Distribution Date, the
         Current Principal Amount of any Class of Subordinate Certificates for
         which the related Class Prepayment Distribution Trigger was satisfied
         on such Distribution Date is reduced to zero, any amounts distributed
         pursuant to


                                       -2-

<PAGE>



         this clause (b), to the extent of such Class's remaining Allocable
         Share, shall be distributed to the remaining Classes of Subordinate
         Certificates which satisfy the related Class Prepayment Distribution
         Trigger and to the Class of Subordinate Certificates having the lowest
         numerical designation in reduction of their respective Current
         Principal Amounts in the order of their numerical Class designations.

         APPLICABLE CREDIT RATING: For any long-term deposit or security, a
credit rating of AAA in the case of S&P, Aaa in the case of Moody's or AAA in
the case of Fitch. For any short-term deposit or security, or a rating of A-l+
in the case of S&P, P-1 in the case of Moody's or F-1+ in the case of Fitch.

         APPLICABLE STATE LAW: For purposes of Section 9.12(d), the Applicable
State Law shall be (a) the law of the State of New York and (b) such other state
law whose applicability shall have been brought to the attention of the Trustee
by either (i) an Opinion of Counsel reasonably acceptable to the Trustee
delivered to it by the Master Servicer or the Seller, or (ii) written notice
from the appropriate taxing authority as to the applicability of such state law.

         APPRAISED VALUE: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.

         ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT: The assignment,
assumption and recognition agreement, dated December 28, 2000, among EMC, the
Trustee and the Master Servicer.

         ASSUMED FINAL DISTRIBUTION DATE:  December 25, 2030.

         AVAILABLE FUNDS: With respect to any Distribution Date, the sum of the
Group 1 Available Fund and the Group 2 Available Funds for such Distribution
Date.

         BANK OF AMERICA:  Bank of America, N.A.

         BANKRUPTCY CODE: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C. ss.ss.101-1330.

         BOOK-ENTRY CERTIFICATES: Initially, all Classes of Certificates other
than the Private Certificates and the Residual Certificates.

         BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange is closed or on which banking
institutions in New York City, Maryland, Minnesota or California, or the
jurisdiction in which the Master Servicer is authorized or obligated by law or
executive order to be closed.

         CERTIFICATE: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibits A-1, A-2 and A-3,
with the blanks therein appropriately completed.



                                       -3-

<PAGE>



         CERTIFICATE ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.01, which shall be denominated "Wells Fargo
Bank Minnesota, National Association, as Trustee f/b/o holders of Structured
Asset Mortgage Investments Inc., Bear Stearns ARM Trust, Mortgage Pass-Through
Certificates, Series 2000-1 - Certificate Account."

         CERTIFICATE GROUP: The Group 1 Certificates or Group 2 Certificates, as
applicable.

         CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.

         CERTIFICATEHOLDER:  A Holder of a Certificate.

         CLASS: With respect to the Certificates, I-A, I-A-IO, II-A, B-1, B-2,
B-3, B-4, B-5, B-6, R-I and R-II.

         CLASS A CERTIFICATES: The Class I-A Certificates, Class I-A-IO and
Class II-A Certificates.

         CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount of such Class and each Class
of Subordinate Certificates subordinate thereto, if any, and the denominator of
which is the Scheduled Principal Balance of all of the Mortgage Loans as of the
related Due Date, equals or exceeds such percentage calculated as of the Closing
Date.

         CLASS R CERTIFICATES: The Class R-I Certificates and Class R-II
Certificates.

         CLOSING DATE:  December 28, 2000.

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

         COMPENSATING INTEREST PAYMENTS: The amounts described in Section
4.04(viii) of the Servicing Agreements.

         COOPERATIVE: A corporation that has been formed for the purpose of
cooperative apartment ownership.

         COOPERATIVE ASSETS: Shares issued by Cooperatives, the related Lease
and any other collateral securing the Cooperative Loans.

         COOPERATIVE BUILDING: The building and other property owned by a
Cooperative.

         COOPERATIVE LOAN: The indebtedness of a Mortgagor evidenced by a
Mortgage Note which is secured by Cooperative Assets and which is being sold to
the Purchaser pursuant to this Agreement, the Mortgage Loans so sold being
identified in the Final Mortgage Loan Schedule.


                                       -4-

<PAGE>



         COOPERATIVE UNIT: A specific dwelling unit in a Cooperative Building as
to which exclusive occupancy rights have been granted pursuant to a Lease.

         CORPORATE TRUST OFFICE: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55749.

         CROSS-COLLATERALIZATION TEST: With respect to any Distribution Date,
the test is satisfied if either (a) the current Aggregate Subordinate Percentage
is less than 200% times the initial Aggregate Subordinate Percentage, or (b) the
average outstanding Scheduled Principal Balance of the Mortgage Loans in either
Loan Group delinquent 60 days or more over the last six months, as a percentage
of the aggregate Current Principal Amount of the Subordinate Certificates, is
greater than or equal to 100%.

         CROSS-OVER DATE: The first Distribution Date on which the aggregate
Current Principal Amount of the Subordinate Certificates has been reduced to
zero (giving effect to all distributions on such Distribution Date).

         CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other than a
Class I-A-IO Certificate) as of any Distribution Date, the initial principal
amount of such Certificate, and reduced by (i) all amounts distributed on
previous Distribution Dates on such Certificate with respect to principal, (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Certificate, taking account of the Loss Allocation
Limitation and (iii) in the case of a Subordinate Certificate, such
Certificate's pro rata share, if any, of the applicable Subordinate Certificate
Writedown Amount for previous Distribution Dates. With respect to any Class of
Certificates (other than the Class I-A-IO Certificates), the Current Principal
Amount thereof will equal the sum of the Current Principal Amounts of all
Certificates in such Class. Notwithstanding the foregoing, solely for purposes
of giving consents, directions, waivers, approvals, requests and notices, the
Class R-I and Class R-II Certificates after the Distribution Date on which they
each receive the distribution of the last dollar of their respective original
principal amount shall be deemed to have Current Principal Amounts equal to
their respective Current Principal Amounts on the day immediately preceding such
Distribution Date.

         CUT-OFF DATE:  December 1, 2000.

         CUT-OFF DATE BALANCE:  $1,056,472,829.

         DEBT SERVICE REDUCTION: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.

         DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.



                                       -5-

<PAGE>



         DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.

         DEPOSITORY AGREEMENT: The meaning specified in Subsection 5.01(a)
hereof.

         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.

         DESIGNATED DEPOSITORY INSTITUTION: A depository institution (commercial
bank, federal savings bank mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.

         DETERMINATION DATE: The Determination Date as defined in the Servicing
Agreements.

         DISQUALIFIED ORGANIZATION: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the Freddie Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an ownership interest in a Residual Certificate by such Person
may cause the Trust or any Person having an ownership interest in the Residual
Certificate (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the transfer
of an ownership interest in a Residual Certificate to such Person. The terms
"United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.

         DISTRIBUTION DATE: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.

         DTC CUSTODIAN: Wells Fargo Bank Minnesota, National Association, or its
successors in interest as custodian for the Depository.

         DUE DATE: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the related Servicing Agreement.

         DUE PERIOD: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the month
in which the Distribution Date


                                       -6-

<PAGE>



occurs and ending at the close of business on the first day of the month in
which the Distribution Date occurs.

         EMC:  EMC Mortgage Corporation.

         ERISA: The Employee Retirement Income Security Act of 1974, as amended.

         EVENT OF DEFAULT: An event of default described in Section 9.01 of the
Servicing Agreements.

         FANNIE MAE: Federal National Mortgage Association or any successor
thereto.

         FDIC:  Federal Deposit Insurance Corporation or any successor thereto.

         FITCH:  Fitch, Inc. and its successors in interest.

         FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount, or Notional
Amount in the case of the Class I-A-IO Certificates, of such Certificate and the
denominator of which is the Current Principal Amount, or Notional Amount in the
case of the Class I-A-IO Certificates, of such Class. With respect to the
Certificates in the aggregate, the fractional undivided interest evidenced by
(i) a Class R-I, Class R-II and Class I-A-IO Certificate will be deemed to equal
0.5%, 0.5% and 1.0%, respectively, multiplied by a fraction, the numerator of
which is the Current Principal Amount, or Notional Amount in the case of the
Class I- A-IO Certificates, of such Certificate and the denominator of which is
the aggregate Current Principal Amount, or Notional Amount in the case of the
Class I-A-IO Certificates, of such respective Class and (ii) a Certificate of
any other Class will be deemed to equal 98.0% multiplied by a fraction, the
numerator of which is the Current Principal Amount of such Certificate and the
denominator of which is the aggregate Current Principal Amount of all the
Certificates.

         FREDDIE MAC: Freddie Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.

         GLOBAL CERTIFICATE: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such depository).

         GROSS MARGIN: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Rate Adjustment Date
to determine (subject to rounding, the minimum and maximum Mortgage Interest
Rate and the Periodic Rate Cap) the Mortgage Interest Rate until the next
Interest Rate Adjustment Date.

         GROUP AVAILABLE FUNDS: Reference to any one of the Group 1 Available
Funds or Group 2 Available Funds.



                                       -7-

<PAGE>



         GROUP 1 AVAILABLE FUNDS OR GROUP 2 AVAILABLE FUNDS: With respect to any
Distribution Date, an amount equal to the aggregate of the following amounts
with respect to the Mortgage Loans in the related Loan Group: (a) all previously
undistributed payments on account of principal (including the principal portion
of Scheduled Payments, Principal Prepayments and the principal portion of Net
Liquidation Proceeds) and all previously undistributed payments on account of
interest received after the Cut-off Date and on or prior to the related
Determination Date, (b) any Monthly Advances and Compensating Interest Payments
by the Master Servicer with respect to such Distribution Date and (c) any
reimbursed amount in connection with losses on investments of deposits in an
account, except:

                  (i) all payments that were due on or before the Cut-off Date;

                  (ii) all Principal Prepayments and Liquidation Proceeds
         received after the applicable Prepayment Period;

                  (iii) all payments, other than Principal Prepayments, that
         represent early receipt of Scheduled Payments due on a date or dates
         subsequent to the related Due Date;

                  (iv) amounts received on particular Mortgage Loans as late
         payments of principal or interest and respecting which, and to the
         extent that, there are any unreimbursed Monthly Advances;

                  (v) amounts representing Monthly Advances determined to be
         Nonrecoverable Advances; and

                  (vi) and any expenses of the Trustee pursuant to Section 9.05.

         GROUP 1 CROSS-COLLATERALIZATION INTEREST AMOUNT: With respect to any
Distribution Date and the Class II-A Certificates, one month's interest at the
Pass-Through Rate for the Class II-A Certificates on a balance equal to the
Group 2 Undercollateralizated Amount.

         GROUP 2 CROSS-COLLATERALIZATION INTEREST AMOUNT: With respect to any
Distribution Date and the Group 1 Senior Certificates, one month's interest at
the sum of the Pass-Through Rates for the Group 1 Senior Certificates then
outstanding on a balance equal to the Group 1 Undercollateralizated Amount.

         GROUP 1 CROSS-COLLATERALIZATION PRINCIPAL AMOUNT: With respect to any
Distribution Date, the aggregate amount distributed to the Class II-A
Certificates pursuant paragraphs FIFTH and SIXTH of Section 6.01(a)(i)(A).

         GROUP 2 CROSS-COLLATERALIZATION PRINCIPAL AMOUNT: With respect to any
Distribution Date, the aggregate amount distributed to the Class I-A
Certificates pursuant paragraphs FIFTH and SIXTH of Section 6.01(a)(i)(B).

         GROUP 1 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.


                                       -8-

<PAGE>



         GROUP 2 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.

         GROUP 1 SENIOR OPTIMAL PRINCIPAL AMOUNT or GROUP 2 SENIOR OPTIMAL
PRINCIPAL AMOUNT: As to any Distribution Date, an amount equal to the sum,
without duplication, of:

                  (i) the applicable Senior Percentage of all scheduled payments
         of principal allocated to the Scheduled Principal Balance due on each
         Outstanding Mortgage Loan in the related Loan Group on the related Due
         Date as specified in the amortization schedule at the time applicable
         thereto (after adjustments for previous Principal Prepayments but
         before any adjustment to such amortization schedule by reason of any
         bankruptcy or similar proceeding or any moratorium or similar waiver or
         grace period);

                  (ii) the applicable Senior Prepayment Percentage of all
         Principal Prepayments in part received during the related Prepayment
         Period with respect to each Mortgage Loan in the related Loan Group,
         together with the applicable Senior Prepayment Percentage of the
         Scheduled Principal Balance of each Mortgage Loan in the related Loan
         Group which was the subject of a Principal Prepayment in full during
         the related Prepayment Period;

                  (iii) the lesser of (a) the applicable Senior Prepayment
         Percentage of all Net Liquidation Proceeds, allocable to principal
         received in respect of each Mortgage Loan in the related Loan Group
         which became a Liquidated Mortgage Loan during the related Prepayment
         Period; and (b) the applicable Senior Percentage of the Scheduled
         Principal Balance of each Mortgage Loan in the related Loan Group which
         became a Liquidated Mortgage Loan during the related Prepayment Period;
         and

                  (iv) the applicable Senior Prepayment Percentage of the sum of
         (a) the Scheduled Principal Balance of each Mortgage Loan or REO
         Property in the related Loan Group which was purchased by EMC on such
         Distribution Date and (b) the excess, if any, of the Scheduled
         Principal Balance of a Mortgage Loan in the related Loan Group that has
         been replaced by the EMC with a Substitute Mortgage Loan pursuant to
         Section 2.04 on such Distribution Date over the Scheduled Principal
         Balance of such Substitute Mortgage Loan.

         GROUP 1 SENIOR PERCENTAGE: Initially 98.0%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amounts of the Group 1
Senior Certificates (other than the Class I-A-IO Certificates) immediately
preceding such Distribution Date by the aggregate Scheduled Principal Balance of
the Group 1 Mortgage Loans as of the beginning of the related Due Period.

         GROUP 2 SENIOR PERCENTAGE: Initially 98.0%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the Current Principal Amount of the Group 2 Senior
Certificates immediately preceding such Distribution Date by the aggregate
Scheduled Principal Balance of the Group 2 Mortgage Loans as of the beginning of
the related Due Period.



                                       -9-

<PAGE>



         GROUP 1 SENIOR PREPAYMENT PERCENTAGE or GROUP 2 SENIOR PREPAYMENT
PERCENTAGE: On any Distribution Date occurring during the periods set forth
below, as follows:


<TABLE>
<CAPTION>
Period (dates inclusive)                           Senior Prepayment Percentage
-----------------------------------------------------------------------------------------------
<S>                                                <C>
January 25, 2001 - December 25, 2007               100%

January 25, 2008 - December 25, 2008               applicable Senior Percentage plus 70% of the
                                                   Subordinate Percentage

January 25, 2009 - December 25, 2009               applicable Senior Percentage plus 60% of the
                                                   Subordinate Percentage

January 25, 2010 - December 25, 2010               applicable Senior Percentage plus 40% of the
                                                   Subordinate Percentage

January 25, 2011 - December 25, 2011               applicable Senior Percentage plus 20% of the
                                                   Subordinate Percentage

January 25, 2012 and thereafter                    applicable Senior Percentage
</TABLE>

         In addition, no reduction of the applicable Senior Prepayment
Percentage shall occur on any Distribution Date unless, as of the last day of
the month preceding such Distribution Date, either (A) (i) (x) the aggregate
Scheduled Principal Balance of the Mortgage Loans in all Loan Groups delinquent
60 days or more (including for this purpose any such Mortgage Loans in
foreclosure and Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the last six months, as
a percentage of the sum of the aggregate Current Principal Amount of the
Subordinate Certificates does not exceed 100%, or (y) the aggregate Scheduled
Principal Balance of the Mortgage Loans in all Loan Groups delinquent 60 days or
more (including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Scheduled Principal Balances of the Mortgage Loans in all Loan
Groups averaged over the last six months, does not exceed 2.0%; and (ii)
cumulative Realized Losses on the Mortgage Loans in all Loan Groups do not
exceed (a) 30% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2008 and December 2008,
(b) 35% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including January 2009 and December 2009, (c) 40% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including January 2010 and December 2010, (d) 45% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including January 2011 and December 2011, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
January 2012; or (B) (i) the aggregate Scheduled Principal Balance of the
Mortgage Loans in all Loan Groups delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and such Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, does not exceed 4.0% of the then-current
aggregate Scheduled Principal Balance of the Mortgage Loans in all Loans Groups;
and (ii) cumulative Realized Losses on the Mortgage Loans in all Loans Groups do
not exceed (a) 10% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2008


                                      -10-

<PAGE>



and December 2008, (b) 15% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2009 and December 2009,
(c) 20% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including January 2010 and December 2010, (d) 25% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including January 2011 and December 2011, and (e) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
January 2012.

         In addition, if the current Aggregate Subordinate Percentage is equal
to or greater than two times the initial Aggregate Subordinate Percentage for
the Certificates, and (a) the aggregate Scheduled Principal Balance of the
Mortgage Loans in all Loan Groups delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and such Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 100%
and (b) cumulative Realized Losses on the Mortgage Loans in all Loan Groups do
not exceed 10% of the Original Subordinate Principal Balance, then the related
Senior Prepayment Percentage for such Distribution Date will equal the
applicable Senior Percentage; provided, however, if the current Aggregate
Subordinate Percentage for the Certificates is equal to or greater than two
times the initial Aggregate Subordinate Percentage for the Certificates prior to
January 25, 2004, then the related Senior Prepayment Percentage for such
Distribution Date will equal the related Senior Percentage plus 50% of the
Subordinate Percentage.

         Notwithstanding the foregoing, if on any Distribution Date the related
Senior Percentage exceeds the applicable Senior Percentage as of the Cut-Off
Date, the related Senior Prepayment Percentage for such Distribution Date will
equal 100%. On the Distribution Date on which the Current Principal Amounts of
the Senior Certificates are reduced to zero, the related Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.

         GROUP 1 SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution
Date, an amount equal to the sum, without duplication, of the following (but in
no event greater than the aggregate Current Principal Amount of the Subordinate
Certificates immediately prior to such Distribution Date):

                  (i) the applicable Group 1 Subordinate Percentage of the
         principal portion of all Scheduled Payments due on each Outstanding
         Mortgage Loan in Loan Group 1 on the related Due Date as specified in
         the amortization schedule at the time applicable thereto (after
         adjustment for previous Principal Prepayments but before any adjustment
         to such amortization schedule by reason of any bankruptcy or similar
         proceeding or any moratorium or similar waiver or grace period);

                  (ii) the applicable Group 1 Subordinate Prepayment Percentage
         of each Principal Payment in part during the related Prepayment Period
         with respect to each Group 1 Mortgage Loan and the applicable Group 1
         Subordinate Prepayment Percentage of the Scheduled Principal Balance of
         each Group 1 Mortgage Loan that was the subject of a Principal
         Prepayment in full during the related Prepayment Period;



                                      -11-

<PAGE>



                  (iii) the excess, if any, of (A) all Net Liquidation Proceeds
         with respect to the Group 1 Mortgage Loans allocable to principal
         received during the related Prepayment Period over (B) the sum of the
         amounts distributable pursuant to clause (iii) of the definition of
         Group 1 Senior Optimal Principal Amount on such Distribution Date;

                  (iv) the applicable Group 1 Subordinate Prepayment Percentage
         of the sum of (a) the Scheduled Principal Balance of each Group 1
         Mortgage Loan or REO Property which was purchased with respect to such
         Distribution Date and (b) the difference, if any, between the Scheduled
         Principal Balance of a Group 1 Mortgage Loan that has been replaced
         with a Substitute Mortgage Loan on such Distribution Date over the
         Scheduled Principal Balance of such Substitute Mortgage Loan; and

                  (v) on the Distribution Date on which the Current Principal
         Amounts of the Group 1 Senior Certificates have all been reduced to
         zero, 100% of any Group 1 Senior Optimal Principal Amount; less

                  (vi) the Group 1 Cross-Collateralization Principal Amount.

After the aggregate Current Principal Amount of the Subordinate Certificates has
been reduced to zero, the Group 1 Subordinate Optimal Principal Amount shall be
zero.

         GROUP 2 SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution
Date, an amount equal to the sum, without duplication, of the following (but in
no event greater than the aggregate Current Principal Amount of the Subordinate
Certificates immediately prior to such Distribution Date):

                  (i) the applicable Group 2 Subordinate Percentage of the
         principal portion of all Scheduled Payments due on each Outstanding
         Mortgage Loan in Loan Group 2 on the related Due Date as specified in
         the amortization schedule at the time applicable thereto (after
         adjustment for previous Principal Prepayments but before any adjustment
         to such amortization schedule by reason of any bankruptcy or similar
         proceeding or any moratorium or similar waiver or grace period);

                  (ii) the applicable Group 2 Subordinate Prepayment Percentage
         of each Principal Payment in part during the related Prepayment Period
         with respect to each Group 2 Mortgage Loan and the applicable Group 2
         Subordinate Prepayment Percentage of the Scheduled Principal Balance of
         each Group 2 Mortgage Loan that was the subject of a Principal
         Prepayment in full during the related Prepayment Period;

                  (iii) the excess, if any, of (A) all Net Liquidation Proceeds
         with respect to the Group 2 Mortgage Loans allocable to principal
         received during the related Prepayment Period over (B) the sum of the
         amounts distributable pursuant to clause (iii) of the definition of
         Group 2 Senior Optimal Principal Amount on such Distribution Date;

                  (iv) the applicable Group 2 Subordinate Prepayment Percentage
         of the sum of (a) the Scheduled Principal Balance of each Group 2
         Mortgage Loan or REO Property which


                                      -12-

<PAGE>



         was purchased with respect to such Distribution Date and (b) the
         difference, if any, between the Scheduled Principal Balance of a Group
         2 Mortgage Loan that has been replaced with a Substitute Mortgage Loan
         on such Distribution Date over the Scheduled Principal Balance of such
         Substitute Mortgage Loan; and

                  (v) on the Distribution Date on which the Current Principal
         Amount of the Group 2 Senior Certificates has all been reduced to zero,
         100% of any Group 2 Senior Optimal Principal Amount; less

                  (vi) the Group 2 Cross-Collateralization Principal Amount.

After the aggregate Current Principal Amount of the Subordinate Certificates has
been reduced to zero, the Group 2 Subordinate Optimal Principal Amount shall be
zero.

         GROUP 1 UNDERCOLLATERALIZED AMOUNT: With respect to any Distribution
Date, an amount equal to the amount, if any, by which the aggregate Current
Principal Amount of the Group 1 Senior Certificates immediately prior to such
Distribution Date exceeds the aggregate Scheduled Principal Balance of the
Mortgage Loans in Loan Group 1 at the beginning of the related Due Period.

         GROUP 2 UNDERCOLLATERALIZED AMOUNT: With respect to any Distribution
Date, an amount equal to the amount, if any, by which the aggregate Current
Principal Amount of the Group 2 Senior Certificates immediately prior to such
Distribution Date exceeds the aggregate Scheduled Principal Balance of the
Mortgage Loans in Loan Group 2 at the beginning of the related Due Period.

         HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller, the Master Servicer or the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Fractional Undivided Interest evidenced thereby shall not be taken into account
in determining whether the requisite percentage of Fractional Undivided
Interests necessary to effect any such consent has been obtained.

         INDEMNIFIED PERSONS: The Trustee, its officers, directors, agents and
employees and any separate co-trustee and its officers, directors, agents and
employees.

         INDEPENDENT: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Seller or the Master
Servicer and of any Affiliate of the Seller or the Master Servicer, (b) does not
have any direct financial interest or any material indirect financial interest
in the Seller or the Master Servicer or any Affiliate of the Seller or the
Master Servicer and (c) is not connected with the Seller or the Master Servicer
or any Affiliate as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.

         INDEX: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.



                                      -13-

<PAGE>



         INDIVIDUAL CERTIFICATE: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.

         INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.

         INSURANCE POLICY: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy or title insurance policy.

         INSURANCE PROCEEDS: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse Insured Expenses.

         INTEREST ACCRUAL PERIOD: With respect to each Distribution Date, for
each Class of Certificates, the calendar month preceding the month in which such
Distribution Date occurs.

         INTEREST ADJUSTMENT DATE: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.

         INTEREST SHORTFALL: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment, constitutes a Relief Act Mortgage Loan, an amount
determined as follows:

                  (a) Partial principal prepayments: The difference between (i)
         one month's interest at the applicable Net Rate on the amount of such
         prepayment and (ii) the amount of interest for the calendar month of
         such prepayment (adjusted to the applicable Net Rate) received at the
         time of such prepayment;

                  (b) Principal prepayments in full received during the relevant
         Prepayment Period: The difference between (i) one month's interest at
         the applicable Net Rate on the Scheduled Principal Balance of such
         Mortgage Loan immediately prior to such prepayment and (ii) the amount
         of interest for the calendar month of such prepayment (adjusted to the
         applicable Net Rate) received at the time of such prepayment; and

                  (c) Relief Act Mortgage Loans: As to any Relief Act Mortgage
         Loan, the excess of (i) 30 days' interest (or, in the case of a
         principal prepayment in full, interest to the date of prepayment) on
         the Scheduled Principal Balance thereof (or, in the case of a principal
         prepayment in part, on the amount so prepaid) at the related Net Rate
         over (ii) 30 days' interest (or, in the case of a principal prepayment
         in full, interest to the date of prepayment) on such Scheduled
         Principal Balance (or, in the case of a Principal Prepayment in part,
         on the amount so prepaid) at the Net Rate required to be paid by the
         Mortgagor as limited by application of the Relief Act.



                                      -14-

<PAGE>



         INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases any Class B-4, Class B-5 and Class B-6
Certificates in connection with such purchase, substantially in the form set
forth as Exhibit F-1 hereto.

         LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
Master Servicer has determined that all amounts it expects to recover from or on
account of such Mortgage Loan have been recovered.

         LIQUIDATION DATE: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer has certified that such Mortgage Loan has
become a Liquidated Mortgage Loan.

         LIQUIDATION EXPENSES: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer, such expenses including (a) property protection expenses, (b) property
sales expenses, (c) foreclosure and sale costs, including court costs and
reasonable attorneys' fees, and (d) similar expenses reasonably paid or incurred
in connection with liquidation.

         LIQUIDATION PROCEEDS: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise.

         LOAN GROUP:  Loan Group 1 or Loan Group 2.

         LOAN GROUP 1: The group of Mortgage Loans designated as belonging to
Loan Group 1 on the Mortgage Loan Schedule.

         LOAN GROUP 2: The group of Mortgage Loans designated as belonging to
Loan Group 2 on the Mortgage Loan Schedule.

         LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.

         LOSS ALLOCATION LIMITATION: The meaning specified in Section 6.02
hereof.

         LOST NOTES: The original Mortgage Notes that have been lost, as
indicated on Exhibit K hereto.

         MASTER SERVICER: As of the Closing Date, Bank of America and,
thereafter, its respective successors in interest who meet the qualifications
pursuant to the Servicing Agreements and this Agreement.

         MASTER SERVICING FEE: As to any Mortgage Loan and Distribution Date, an
amount equal to the product of (i) the Scheduled Principal Balance of such
Mortgage Loan as of the Due Date in the preceding calendar month and (ii) the
Master Servicing Fee Rate.



                                      -15-

<PAGE>



         MASTER SERVICING FEE RATE: As to any Mortgage Loan, a per annum rate
equal to 0.250%.

         MAXIMUM LIFETIME MORTGAGE RATE: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.

         MINIMUM LIFETIME MORTGAGE RATE: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.

         MONTHLY ADVANCE: An advance of principal or interest required to be
made by the Master Servicer pursuant to Section 11.17 of the Servicing
Agreements or the Trustee pursuant to Section 6.05.

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

         MORTGAGE FILE: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.

         MORTGAGE INTEREST RATE: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is equal to the "Mortgage Interest Rate" set forth with respect thereto on
the Mortgage Loan Schedule.

         MORTGAGE LOAN: A mortgage loan (including Cooperative Loans)
transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.04
and held as a part of the Trust Fund, as identified in the Mortgage Loan
Schedule, including a mortgage loan the property securing which has become an
REO Property.

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of December 28, 2000, between EMC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto.

         MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.

         MORTGAGE NOTE: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.

         MORTGAGED PROPERTY: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.

         MORTGAGOR:  The obligor on a Mortgage Note.

         NET INTEREST SHORTFALL: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.


                                      -16-

<PAGE>



         NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the Master Servicer in accordance with the Servicing Agreements or this
Agreement and (ii) unreimbursed advances by the Master Servicer and Monthly
Advances.

         NET RATE: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the Aggregate Expense Rate (expressed as a
per annum rate).

         NONRECOVERABLE ADVANCE: Any advance (i) which was previously made or is
proposed to be made by the Master Servicer or the Trustee and (ii) which, in the
good faith judgment of the Master Servicer or the Trustee, will not or, in the
case of a proposed advance, would not, be ultimately recoverable by the Master
Servicer or the Trustee from Liquidation Proceeds, Insurance Proceeds or future
payments on the Mortgage Loan for which such advance was made.

         NOTIONAL AMOUNT: On any Distribution Date, with respect to the Class
I-A-IO Certificates, an amount equal to the Current Principal Amount of the
Class I-A Certificates, which for federal income tax purposes shall equal the
Uncertificated Principal Balance of REMIC I Regular Interest 1A.

         OFFERED CERTIFICATE: Any Class A, Class B-l, Class B-2, Class B-3 and
Class R Certificate.

         OFFERED SUBORDINATE CERTIFICATES: The Class B-l, Class B-2 and Class
B-3 Certificates.

         OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer and
delivered to the Trustee, as required by this Agreement.

         OPINION OF COUNSEL: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for the Master
Servicer or the Seller.

         ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the aggregate
Current Principal Amounts of each Class of Subordinate Certificates as of the
Closing Date.

         ORIGINAL VALUE: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Seller.

         OUTSTANDING MORTGAGE LOAN: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased or replaced.

         OUTSTANDING PRINCIPAL BALANCE: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the


                                      -17-

<PAGE>



principal balance of the related Mortgage Loan remaining to be paid by the
Mortgagor at the time such property was acquired by the Trust Fund less any Net
Insurance Proceeds with respect thereto to the extent applied to principal.

         PASS-THROUGH RATE: As to each Class of Certificates, the rate of
interest determined as provided with respect thereto, in Section 5.01(d). Any
monthly calculation of interest at a stated rate shall be based upon annual
interest at such rate divided by twelve.

         PERIODIC RATE CAP: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.

         PERMITTED INVESTMENTS: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:

                  (i) direct obligations of, and obligations the timely payment
         of which are fully guaranteed by the United States of America or any
         agency or instrumentality of the United States of America the
         obligations of which are backed by the full faith and credit of the
         United States of America;

                  (ii) (a) demand or time deposits, federal funds or bankers'
         acceptances issued by any depository institution or trust company
         incorporated under the laws of the United States of America or any
         state thereof (including the Trustee acting in its commercial banking
         capacity) and subject to supervision and examination by federal and/or
         state banking authorities, provided that the commercial paper and/or
         the short-term debt rating and/or the long-term unsecured debt
         obligations of such depository institution or trust company at the time
         of such investment or contractual commitment providing for such
         investment have the Applicable Credit Rating or better from each Rating
         Agency and (b) any other demand or time deposit or certificate of
         deposit that is fully insured by the Federal Deposit Insurance
         Corporation;

                  (iii) repurchase obligations with respect to (a) any security
         described in clause (i) above or (b) any other security issued or
         guaranteed by an agency or instrumentality of the United States of
         America, the obligations of which are backed by the full faith and
         credit of the United States of America, in either case entered into
         with a depository institution or trust company (acting as principal)
         described in clause (ii)(a) above where the Trustee holds the security
         therefor;

                  (iv) securities bearing interest or sold at a discount issued
         by any corporation (including the Trustee) incorporated under the laws
         of the United States of America or any state thereof that have the
         Applicable Credit Rating or better from each Rating Agency 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
         investments therein will cause the then outstanding principal amount of
         securities issued by such corporation and held as part of the Trust to
         exceed 10%


                                      -18-

<PAGE>



         of the aggregate Outstanding Principal Balances of all the Mortgage
         Loans and Permitted Investments held as part of the Trust;

                  (v) commercial paper (including both non-interest-bearing
         discount obligations and interest-bearing obligations payable on demand
         or on a specified date not more than one year after the date of
         issuance thereof) having the Applicable Credit Rating or better from
         each Rating Agency at the time of such investment;

                  (vi) a Reinvestment Agreement issued by any bank, insurance
         company or other corporation or entity;

                  (vii) any other demand, money market or time deposit,
         obligation, security or investment as may be acceptable to each Rating
         Agency as evidenced in writing by each Rating Agency to the Trustee;
         and

                  (viii) any money market or common trust fund having the
         Applicable Credit Rating or better from each Rating Agency, including
         any such fund for which the Trustee or any affiliate of the Trustee
         acts as a manager or an advisor;

PROVIDED, HOWEVER, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
instrument or security is purchased at a price greater than par.

         PERMITTED TRANSFEREE: Any Person other than a Disqualified Organization
or an "electing large partnership" (as defined by Section 775 of the Code).

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

         PHYSICAL CERTIFICATES: The Residual Certificates and the Private
Certificates.

         PMI INSURANCE PREMIUM: With respect to each Distribution Date, the
premium for the PMI Policy, equal to one month's interest at the PMI Insurance
Premium Rate on the Scheduled Principal Balance (as of the beginning of the
related Due Period) of the Mortgage Loans which were covered by the PMI Policy
as of the Cut-off Date, payable by the Trustee on each Distribution Date from
amounts on deposit in the Certificate Account in accordance with Section 4.02(b)
of this Agreement.

         PMI INSURANCE PREMIUM RATE: With respect to any Mortgage Loan covered
by the PMI Policy, the rate at which the premium on the PMI Policy accrues,
which is 0.155% per annum.

         PMI INSURER: Mortgage Guaranty Insurance Corporation, or a successor
appointed in accordance with Section 9.13(b) of this Agreement.



                                      -19-

<PAGE>



         PMI POLICY: The supplemental primary mortgage insurance policy of the
PMI Insurer attached hereto as Exhibit J, or any successor PMI Policy.

         PREPAYMENT CHARGE: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.

         PREPAYMENT PERIOD: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.

         PRINCIPAL PREPAYMENT: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment, including Insurance Proceeds
and the purchase price in connection with any purchase of a Mortgage Loan, any
cash deposit in connection with the substitution of a Mortgage Loan, and the
principal portion of Net Liquidation Proceeds.

         PRIVATE CERTIFICATES: Any Class B-4, Class B-5 and Class B-6
Certificates.

         PROTECTED ACCOUNT: An account established and maintained for the
benefit of Certificateholders by the Master Servicer with respect to the
Mortgage Loans and with respect to REO Property in accordance with the Servicing
Agreements.

         QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.

         QUALIFIED INSURER: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.

         RATING AGENCIES:  S&P, Moody's and Fitch.

         REALIZED LOSS: Any (i) Deficient Valuation or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, LESS (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan.

         RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.

         REINVESTMENT AGREEMENTS: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).


                                      -20-

<PAGE>



         RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.

         RELIEF ACT MORTGAGE LOAN: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act

         REMIC: A real estate mortgage investment conduit, as defined in the
Code.

         REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) the Mortgage Loans, (ii) the related Certificate
Account, (iii) any REO Property relating to the Mortgage Loans, (iv) the rights
with respect to any Servicing Agreement and (v) any proceeds of the foregoing.

         REMIC I INTERESTS: The REMIC I Regular Interests and the Class R-I
Certificates.

         REMIC I REGULAR INTERESTS: REMIC I Regular Interest 1A, REMIC I Regular
Interest 1B, REMIC I Regular Interest 1C, REMIC I Regular Interest 2A and REMIC
I Regular Interest 2B with such terms as described in Section 5.01(c).

         REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Interests.

         REMIC II CERTIFICATES: The REMIC II Regular Certificates and the Class
R-II Certificates.

         REMIC II REGULAR CERTIFICATES: As defined in Section 5.01(c).

         REMIC OPINION: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause either REMIC I or REMIC II to fail to qualify as a REMIC while any regular
interest in such REMIC is outstanding, (ii) result in a tax on prohibited
transactions with respect to either REMIC or (iii) constitute a taxable
contribution to either REMIC after the Startup Day.

         REMIC PROVISIONS: The provisions of the federal income tax law relating
to the REMIC, which appear at Sections 860A through 860G of the Code, and
related provisions and regulations promulgated thereunder, as the foregoing may
be in effect from time to time.

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

         REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased pursuant to Article II
an amount equal to the sum of (i) 100% of the Outstanding Principal Balance of
such Mortgage Loan as of the date of repurchase (or if the related Mortgaged
Property was acquired with respect thereto, 100% of the Outstanding Principal
Balance at the date of the acquisition), plus (ii) accrued but unpaid interest
on the Outstanding Principal Balance at the related Mortgage Interest Rate,
through and including the last day of the


                                      -21-

<PAGE>



month of repurchase, and reduced by (iii) any portion of the Master Servicing
Fees, Monthly Advances and advances payable to the purchaser of the Mortgage
Loan.

         REQUEST FOR RELEASE: A request for release in the form attached hereto
as Exhibit D.

         REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.

         RESIDUAL CERTIFICATES:  Any of the Class R Certificates.

         RESPONSIBLE OFFICER: Any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement.

         RULE 144A CERTIFICATE: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate) which
is a Qualified Institutional Buyer as defined under Rule 144A promulgated under
the Securities Act, substantially in the form set forth as Exhibit F-2 hereto.

         S&P: Standard and Poor's, a division of The McGraw-Hill Companies,
Inc., and its successors in interest.

         SCHEDULED PAYMENT: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.

         SCHEDULED PRINCIPAL:  The principal portion of any Scheduled Payment.

         SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) and less (ii) any Principal Prepayments (including the principal portion
of Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.

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

         SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES


                                      -22-

<PAGE>



ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN
THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR
INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A
CERTIFICATE AND THE SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS
ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED
UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT
NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, PTE 91-38, PTE
90-1, PTE 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
FIDUCIARY DUTIES ON THE PART OF THE SELLER, THE MASTER SERVICER OR THE TRUSTEE,
WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A
GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF
COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR."

         SECURITY INSTRUMENT: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed, including
any riders or addenda thereto.

         SELLER: Structured Asset Mortgage Investments Inc., a Delaware
corporation, or its successors in interest.



                                      -23-

<PAGE>



         SENIOR CERTIFICATES: The Class I-A, Class I-A-IO, Class II-A, Class R-I
and Class R-II Certificates.

         SENIOR PERCENTAGE: The Group 1 Senior Percentage or Group 2 Senior
Percentage.

         SERVICER REMITTANCE DATE: With respect to each Mortgage Loan, the date
set forth in the Servicing Agreements.

         SERVICING AGREEMENTS: The Mortgage Loan Sale and Servicing Agreement,
dated November 10, 2000, the Mortgage Loan Sale and Servicing Agreement, dated
November 21, 2000 and two Mortgage Loan Sale and Servicing Agreements, each
dated December 13, 2000, each between Bank of America as seller and servicer and
EMC as purchaser.

         STARTUP DAY:  December 28, 2000.

         STOP-LOSS AMOUNT: As of the Cut-off Date, 2.75% of the Cut-off Date
Balance. With respect to any date of determination after the Cut-off Date, the
initial Stop-Loss Amount, less the aggregate amount of claims paid by the PMI
Insurer in respect of the PMI Policy on or before such date of determination.

         SUBORDINATE CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.

         SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any Distribution Date,
the amount by which (a) the sum of the Current Principal Amounts of all the
Certificates (after giving effect to the distribution of principal and the
allocation of applicable Realized Losses in reduction of the Current Principal
Amounts of such Certificates on such Distribution Date) exceeds (b) the
aggregate Scheduled Principal Balances of the Mortgage Loans on the Due Date
related to such Distribution Date.

         SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: The Group 1 Subordinate Optimal
Principal Amount or the Group 2 Subordinate Optimal Principal Amount, as
applicable.

         SUBORDINATE PERCENTAGE: On any Distribution Date, as determined
separate for each Loan Group, 100% minus the applicable Senior Percentage.

         SUBORDINATE PREPAYMENT PERCENTAGE: With respect to each Loan Group, on
any Distribution Date, 100% minus the applicable Senior Prepayment Percentage,
except that on any Distribution Date after the Current Principal Amounts of the
applicable Senior Certificates have each been reduced to zero, the Subordinate
Prepayment Percentage will equal 100%.

         SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee
pursuant to Section 2.04, in each case, (i) which has an Outstanding Principal
Balance not greater nor materially less than the Mortgage Loan for which it is
to be substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less
than, and not materially greater than, such Mortgage Loan; (iii) which has a
maturity date not materially earlier or later than such Mortgage Loan and not
later than the latest maturity date


                                      -24-

<PAGE>



of any Mortgage Loan; (iv) which is of the same property type and occupancy type
as such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment of
principal and interest as of the date of substitution; (vii) as to which the
payment terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted and (viii) which has a Gross
Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those
of such Mortgage Loan, has the same Index and interval between Interest
Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no
lower than that of such Mortgage Loan.

         TAX ADMINISTRATION AND TAX MATTERS PERSON: The Trustee or any successor
thereto or assignee thereof shall serve as tax administrator hereunder and as
agent for the Tax Matters Person. The Holder of each Class of Residual
Certificates shall be the Tax Matters Person for the related REMIC, as more
particularly set forth in Section 9.13 hereof.

         TRUST FUND or TRUST: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans and the other assets described in Section
2.01(a).

         TRUSTEE: Wells Fargo Bank Minnesota, National Association, or its
successor in interest, or any successor trustee appointed as herein provided.

         UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or REO
Property such that the complete restoration of such Mortgaged Property or REO
Property is not fully reimbursable by the hazard insurance policies required to
be maintained pursuant to Section 4.10 of the Servicing Agreements, without
regard to whether or not such policy is maintained.

         UNITED STATES PERSON: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class R Certificates, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.


                                      -25-

<PAGE>




                                   ARTICLE II

                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates

         Section 2.01. CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE. (a) The Seller
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date, but excluding any payments of principal and interest due
on or prior to the Cut-off Date; (ii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Certificate Account, (iii) such assets relating to the Mortgage Loans as from
time to time may be held by the Master Servicer in Protected Accounts for the
benefit of the holder of the Mortgage Loans, (iv) any REO Property, (v) the
Required Insurance Policies and any amounts paid or payable by the insurer under
any Insurance Policy (to the extent the mortgagee has a claim thereto), (vi) the
Mortgage Loan Purchase Agreement to the extent provided in Subsection 2.03(a),
(vii) the Servicing Agreements, (viii) the Assignment, Assumption and
Recognition Agreement, and (ix) any proceeds of the foregoing. Although it is
the intent of the parties to this Agreement that the conveyance of the Seller's
right, title and interest in and to the Mortgage Loans and other assets in the
Trust Fund pursuant to this Agreement shall constitute a purchase and sale and
not a loan, in the event that such conveyance is deemed to be a loan, it is the
intent of the parties to this Agreement that the Seller shall be deemed to have
granted to the Trustee a first priority perfected security interest in all of
the Seller's right, title and interest in, to and under the Mortgage Loans and
other assets in the Trust Fund, and that this Agreement shall constitute a
security agreement under applicable law.

         (b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Trustee, with respect to (A) each Mortgage Loan, other
than a Cooperative Loan (i) the original Mortgage Note, endorsed without
recourse to the order of the Trustee and showing an unbroken chain of
endorsements from the original payee thereof to the Person endorsing it to the
Trustee, (ii) the original Security Instrument, which shall have been recorded,
with evidence of such recording indicated thereon, (iii) a certified copy of the
assignment (which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to the Trustee of the
Security Instrument, with evidence of recording with respect to each Mortgage
Loan in the name of the Trustee thereon (or if clause (x) in the proviso below
applies, shall be in recordable form), (iv) all intervening assignments of the
Security Instrument, if applicable and only to the extent available to the
Seller with evidence of recording thereon, (v) the original or a copy of the
policy or certificate of primary mortgage guaranty insurance, to the extent
available, if any, (vi) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title insurance and
(vii) originals of all modification agreements, if applicable and available and
(B) each Cooperative Loan (i) the original Mortgage Note, endorsed, without
recourse to the order of the Trustee, and showing, to the extent available, an
unbroken chain of title from the originator to the Trustee or, in the case of a
Mortgage Loan that is subject to the terms of a consolidation and modification
agreement, an assignment of such agreement to the Trustee; (ii) the original
duly executed assignment of security agreement to the Trustee; (iii) the
original Mortgage; (iv) the


                                      -26-

<PAGE>



acknowledgment copy of the original executed Form UCC-1 (or certified copy
thereof) with respect to the security agreement, and any required continuation
statements, with evidence of filing indicated thereon; (v) the acknowledgment
copy of the original executed Form UCC-3 with respect to the security agreement,
indicating the Trustee as the assignee of the secured party, with evidence of
filing indicated thereon; (vi) the stock certificate representing the stock
allocated to the cooperative unit, with a stock power in blank attached; (vii)
the original collateral assignment of the lease by Mortgagor to the originator
and the assignment of the collateral assignment of the lease to the Trustee
(which may be in blanket form), accompanied by the original lease; (viii) a copy
of the recognition agreement; (ix) if applicable and to the extent available,
the original intervening assignments, including warehousing assignments, if any,
showing, to the extent available, an unbroken chain of the related Mortgage Loan
to the Trustee, together with a copy of the related Form UCC-3 with evidence of
filing thereon; (x) the originals of each assumption, modification or
substitution agreement, if any, relating to the Mortgage Loan; and (xi) the
certificate of primary mortgage insurance, if applicable;

PROVIDED, HOWEVER, that in lieu of the foregoing, the Seller may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording and have
not been returned to the Seller in time to permit their delivery as specified
above, the Seller may deliver a true copy thereof with a certification by the
Seller or the Master Servicer, on the face of such copy, substantially as
follows: "Certified to be a true and correct copy of the original, which has
been transmitted for recording"; and (y) in lieu of the Security Instrument,
assignment to the Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced by a
certification from the Seller or the Master Servicer, to such effect) the Seller
may deliver photocopies of such documents containing an original certification
by the judicial or other governmental authority of the jurisdiction where such
documents were recorded; and PROVIDED, FURTHER, HOWEVER, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-off Date and prior
to the Closing Date, the Seller, in lieu of delivering the above documents, may
deliver to the Trustee a certification to such effect and shall deposit all
amounts paid in respect of such Mortgage Loans in the Certificate Account on the
Closing Date. The Seller shall deliver such original documents (including any
original documents as to which certified copies had previously been delivered)
to the Trustee promptly after they are received. The Seller shall cause, at its
expense, the assignment of the Security Instrument to the Trustee to be recorded
not later than 180 days after the Closing Date, unless such recordation is not
required by the Rating Agencies or an Opinion of Counsel has been provided as
set forth below in this Section 2.01(b). With respect to the Cooperative Loans,
the Seller will, promptly after the Closing Date, cause the related financing
statements (if not yet filed) and an assignment thereof from the Seller to the
Trustee to be filed in the appropriate offices. The Seller need not cause to be
recorded any assignment in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by the Seller to the Trustee, the
Custodian and the Rating Agencies, the recordation of such assignment is not
necessary to protect the Trustee's interest in the related Mortgage Loan;
provided, however, notwithstanding the delivery of any Opinion of Counsel, each
assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust or the Trustee, upon the earliest to
occur of : (i) reasonable direction by the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less


                                      -27-

<PAGE>



than 25% of the Trust, (ii) the occurrence of an Event of Default, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller,
(iv) the occurrence of a servicing transfer as described in Section 8.02 hereof
and (v) if the Seller is not the Master Servicer and with respect to any one
assignment, the occurrence of a bankruptcy, insolvency or foreclosure relating
to the Mortgagor under the related Mortgage. Notwithstanding the foregoing, if
the Seller fails to pay the cost of recording the assignments, such expense will
be paid by the Trustee and the Trustee shall be reimbursed for such expenses by
the Trust in accordance with Section 9.05.

         Section 2.02. ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust to it by the Seller
and receipt of, subject to further review and the exceptions which may be noted
pursuant to the procedures described below, and declares that it holds, the
documents (or certified copies thereof) delivered to it pursuant to Section
2.01, and declares that it will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it as Trustee in trust for the use and benefit of all
present and future Holders of the Certificates. No later than 45 days after the
Closing Date (or, with respect to any Substitute Mortgage Loan, within five
Business Days after the receipt by the Trustee thereof), the Trustee agrees, for
the benefit of the Certificateholders, to review each Mortgage File delivered to
it and to execute and deliver, or cause to be executed and delivered, to the
Seller an Initial Certification substantially in the form annexed hereto as
Exhibit G. In conducting such review, the Trustee will ascertain whether all
required documents have been executed and received and whether those documents
relate, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans it has received, as identified in
Exhibit B to this Agreement, as supplemented (PROVIDED, HOWEVER, that with
respect to those documents described in subclauses (b)(iv), (b)(v) and (b)(vi)
of Section 2.01, the Trustee's obligations shall extend only to documents
actually delivered pursuant to such subsections). In performing any such review,
the Trustee may conclusively rely on the purported due execution and genuineness
of any such document and on the purported genuineness of any signature thereon.
If the Trustee finds any document constituting part of the Mortgage File not to
have been executed or received, or to be unrelated to the Mortgage Loans
identified in Exhibit B or to appear to be defective on its face, the Trustee
shall promptly notify EMC. EMC shall correct or cure any such defect within 90
days from the date of notice from the Trustee of the defect and if EMC fails to
correct or cure the defect within such period, and such defect materially and
adversely affects the interests of the Certificateholders in the related
Mortgage Loan, EMC will, subject to Section 2.04, within 90 days from the
Trustee's notification purchase such Mortgage Loan at the Repurchase Price;
provided that, if such defect would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such cure
or repurchase must occur within 90 days from the date such breach was
discovered; PROVIDED, HOWEVER, that if such defect relates solely to the
inability of EMC to deliver the original Security Instrument or intervening
assignments thereof, or a certified copy because the originals of such
documents, or a certified copy have not been returned by the applicable
jurisdiction, EMC shall not be required to purchase such Mortgage Loan if EMC
delivers such original documents or certified copy promptly upon receipt, but in
no event later than 360 days after the Closing Date. The foregoing repurchase
obligation shall not apply in the event that EMC cannot deliver such original or
copy of any document submitted for recording to the appropriate recording office
in the applicable jurisdiction because such document has not been returned by
such office; provided that EMC shall instead deliver a recording receipt of such
recording office or, if such receipt is not available, a certificate confirming
that such documents have been accepted for


                                      -28-

<PAGE>



recording, and delivery to the Trustee shall be effected by EMC within thirty
days of its receipt of the original recorded document.

         (b) No later than 180 days after the Closing Date, the Trustee will
review, for the benefit of the Certificateholders, the Mortgage Files delivered
to it and will execute and deliver or cause to be executed and delivered to the
Seller a Final Certification substantially in the form annexed hereto as Exhibit
H. In conducting such review, the Trustee will ascertain whether an original of
each document required to be recorded has been returned from the recording
office with evidence of recording thereon or a certified copy has been obtained
from the recording office. If the Trustee finds any document constituting part
of the Mortgage File has not been received, or to be unrelated, determined on
the basis of the Mortgagor name, original principal balance and loan number, to
the Mortgage Loans identified in Exhibit B or to appear defective on its face,
the Trustee shall promptly notify EMC (PROVIDED, HOWEVER, that with respect to
those documents described in subsection (b)(iv), (b)(v) and (b)(vi) of Section
2.01, the Trustee's obligations shall extend only to the documents actually
delivered pursuant to such subsections). EMC shall correct or cure any such
defect or shall deliver to the Trustee an Opinion of Counsel to the effect that
such defect does not materially or adversely affect the interests of
Certificateholders in such Mortgage Loan within 90 days from the date of notice
from the Trustee of the defect and if EMC is unable to cure such defect within
such period, and if such defect materially and adversely affects the interests
of the Certificateholders in the related Mortgage Loan, EMC shall, subject to
Section 2.04, within 120 days from the Trustee's notification purchase such
Mortgage Loan at the Repurchase Price, PROVIDED, HOWEVER, that if such defect
relates solely to the inability of EMC to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy, because the
originals of such documents. or a certified copy, have not been returned by the
applicable jurisdiction, EMC shall not be required to purchase such Mortgage
Loan, if EMC delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date.

         (c) In the event that a Mortgage Loan is purchased by EMC in accordance
with Subsections 2.02(a) or (b) above, EMC shall provide the Repurchase Price to
the Trustee for deposit in the Certificate Account and shall provide to the
Trustee written notification detailing the components of the Repurchase Price.
Upon deposit of the Repurchase Price in the Certificate Account, the Trustee
shall release to EMC the related Mortgage File and shall execute and deliver all
instruments of transfer or assignment, without recourse, furnished to it by EMC
as are necessary to vest in EMC title to and rights under the Mortgage Loan.
Such purchase shall be deemed to have occurred on the date on which the
Repurchase Price in available funds is received by the Trustee. The Trustee
shall amend the Mortgage Loan Schedule, which was previously delivered to it by
Seller in a form agreed to between the Seller and the Trustee, to reflect such
repurchase and shall promptly notify the Rating Agencies of such amendment. The
obligation of EMC to repurchase any Mortgage Loan as to which such a defect in a
constituent document exists shall be the sole remedy respecting such defect
available to the Certificateholders or to the Trustee on their behalf.

         Section 2.03. ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE
AGREEMENT. (a) The Seller hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to Seller's rights and obligations
pursuant to the Servicing Agreements, provided that the Seller retains a joint
and several right in the event of breach of the representations, warranties and
covenants of the Master Servicer


                                      -29-

<PAGE>



under the Servicing Agreements to enforce the provisions thereof and to seek all
or any available remedies; and provided further that this shall not be deemed an
agreement or requirement on the part of the Seller to pursue any such remedies;
provided, further, that the obligations of EMC to substitute or repurchase, as
applicable, a Mortgage Loan shall be the Trustee's and the Certificateholders'
sole remedy for any breach thereof. At the request of the Trustee, the Seller
shall take such actions as may be necessary to enforce the above right, title
and interest on behalf of the Trustee and the Certificateholders or shall
execute such further documents as the Trustee may reasonably require in order to
enable the Trustee to carry out such enforcement.

         (b) If the Seller or the Trustee discovers a breach of any of the
representations and warranties set forth in Exhibit C or Section 7 of the
Mortgage Loan Purchase Agreement and such breach existed on the date the
representation and warranty was made, which breach materially and adversely
affects the value of the interests of Certificateholders or the Trustee in the
related Mortgage Loan, the party discovering the breach shall give prompt
written notice of the breach to the other parties. EMC within 90 days of its
discovery or receipt of notice that such breach has occurred (whichever occurs
earlier), shall cure the breach in all material respects or, subject to Section
2.04, shall purchase the Mortgage Loan or any property acquired with respect
thereto from the Trustee; PROVIDED, HOWEVER, that if there is a breach of any
representation set forth in Exhibit C and the Mortgage Loan or the related
property acquired with respect thereto has been sold, then EMC shall pay, in
lieu of the Repurchase Price, any excess of the Repurchase Price over the Net
Liquidation Proceeds received upon such sale. (If the Net Liquidation Proceeds
exceed the Repurchase Price, any excess shall be paid to EMC to the extent not
required by law to be paid to the borrower.) Any such purchase by EMC shall be
made by providing an amount equal to the Repurchase Price to the Trustee for
deposit in the Certificate Account and the Trustee, upon deposit of the
Repurchase Price in the Certificate Account and of written notification
detailing the components of such Repurchase Price, shall release to EMC the
related Mortgage File and shall execute and deliver all instruments of transfer
or assignment furnished to it by EMC, without recourse, as are necessary to vest
in EMC title to and rights under the Mortgage Loan or any property acquired with
respect thereto. Such purchase shall be deemed to have occurred on the date on
which the Repurchase Price in available funds is received by the Trustee. The
Trustee shall amend the Mortgage Loan Schedule to reflect such repurchase and
shall promptly notify the Master Servicer and the Rating Agencies of such
amendment. Enforcement of the obligation of EMC, to purchase (or substitute a
Substitute Mortgage Loan for) any Mortgage Loan or any property acquired with
respect thereto (or pay the Repurchase Price as set forth in the above proviso)
as to which a breach has occurred and is continuing shall constitute the sole
remedy respecting such breach available to the Certificateholders or the Trustee
on their behalf.

         Section 2.04. SUBSTITUTION OF MORTGAGE LOANS. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to Sections 2.02 or 2.03, EMC may, no later than the date by which such
purchase by EMC would otherwise be required, tender to the Trustee a Substitute
Mortgage Loan accompanied by a certificate of an authorized officer of EMC that
such Substitute Mortgage Loan conforms to the requirements set forth in the
definition of "Substitute Mortgage Loan"; PROVIDED, HOWEVER, that substitution
pursuant to this Section 2.04 in lieu of purchase shall not be permitted after
the termination of the two-year period beginning on the Startup Day. The Trustee
shall examine the Mortgage File for any Substitute Mortgage Loan in the manner
set forth in Section 2.02(a) and shall notify EMC in writing, within five
Business Days after


                                      -30-

<PAGE>



receipt, whether or not the documents relating to the Substitute Mortgage Loan
satisfy the requirements of the third sentence of Subsection 2.02(a). Within two
Business Days after such notification, EMC shall provide to the Trustee for
deposit in the Certificate Account the amount, if any, by which the Outstanding
Principal Balance as of the next preceding Due Date of the Mortgage Loan for
which substitution is being made, after giving effect to Scheduled Principal due
on such date, exceeds the Outstanding Principal Balance as of such date of the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such
date, which amount shall be treated for the purposes of this Agreement as if it
were the payment by EMC of the Repurchase Price for the purchase of a Mortgage
Loan by EMC. After such notification to EMC and, if any such excess exists, upon
receipt of such deposit, the Trustee shall accept such Substitute Mortgage Loan
which shall thereafter be deemed to be a Mortgage Loan hereunder. In the event
of such a substitution, accrued interest on the Substitute Mortgage Loan for the
month in which the substitution occurs and any Principal Prepayments made
thereon during such month shall be the property of the Trust Fund and accrued
interest for such month on the Mortgage Loan for which the substitution is made
and any Principal Prepayments made thereon during such month shall be the
property of EMC or the Master Servicer. The Scheduled Principal on a Substitute
Mortgage Loan due on the Due Date in the month of substitution shall be the
property of EMC and the Scheduled Principal on the Mortgage Loan for which the
substitution is made due on such Due Date shall be the property of the Trust
Fund. Upon acceptance of the Substitute Mortgage Loan, the Trustee shall release
to EMC the related Mortgage File related to any Mortgage Loan released pursuant
to this Section 2.04 and shall execute and deliver all instruments of transfer
or assignment, without recourse, in form as provided to it as are necessary to
vest in EMC title to and rights under any Mortgage Loan released pursuant to
this Section 2.04. EMC shall deliver the documents related to the Substitute
Mortgage Loan in accordance with the provisions of Subsections 2.01(b) and
2.02(b), with the date of acceptance of the Substitute Mortgage Loan deemed to
be the Closing Date for purposes of the time periods set forth in those
Subsections. The representations and warranties set forth in the applicable
Servicing Agreements and Exhibit C shall be deemed to have been made by EMC with
respect to each Substitute Mortgage Loan as of the date of acceptance of such
Mortgage Loan by the Trustee. The Trustee shall amend the Mortgage Loan Schedule
to reflect such substitution and shall provide a copy of such amended Mortgage
Loan Schedule to the Master Servicer and the Rating Agencies.

         Section 2.05. ISSUANCE OF CERTIFICATES. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the other assets comprising the Trust
Fund and, concurrently therewith, has signed, and countersigned and delivered to
the Seller, in exchange therefor, Certificates in such authorized denominations
representing such Fractional Undivided Interests as the Seller has requested.
The Trustee agrees that it will hold the Mortgage Loans and such other assets as
may from time to time be delivered to it segregated on the books of the Trustee
in trust for the benefit of the Certificateholders.

         The Seller, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Seller in and to the
REMIC I Regular Interests for the benefit of the holders of the REMIC II
Certificates. The Trustee acknowledges receipt of the REMIC I Regular Interests
(which are uncertificated) and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC II
Certificates. The interests evidenced by the Class R-II Certificates, constitute
the entire beneficial ownership interest in REMIC II.


                                      -31-

<PAGE>



         Section 2.06. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER. The
Seller hereby represents and warrants to the Trustee as follows:

                  (i) the Seller (a) is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Delaware
         and (b) is qualified and in good standing as a foreign corporation to
         do business in each jurisdiction where such qualification is necessary,
         except where the failure so to qualify would not reasonably be expected
         to have a material adverse effect on the Seller's business as presently
         conducted or on the Purchaser's ability to enter into this Agreement
         and to consummate the transactions contemplated hereby;

                  (ii) the Seller has full corporate power to own its property,
         to carry on its business as presently conducted and to enter into and
         perform its obligations under this Agreement;

                  (iii) the execution and delivery by the Seller of this
         Agreement have been duly authorized by all necessary corporate action
         on the part of the Seller; and neither the execution and delivery of
         this Agreement, nor the consummation of the transactions herein
         contemplated, nor compliance with the provisions hereof, will conflict
         with or result in a breach of, or constitute a default under, any of
         the provisions of any law, governmental rule, regulation, judgment,
         decree or order binding on the Seller or its properties or the articles
         of incorporation or by-laws of the Seller, except those conflicts,
         breaches or defaults which would not reasonably be expected to have a
         material adverse effect on the Seller's ability to enter into this
         Agreement and to consummate the transactions contemplated hereby;

                  (iv) the execution, delivery and performance by the Seller of
         this Agreement and the consummation of the transactions contemplated
         hereby do not require the consent or approval of, the giving of notice
         to, the registration with, or the taking of any other action in respect
         of, any state, federal or other governmental authority or agency,
         except those consents, approvals, notices, registrations or other
         actions as have already been obtained, given or made;

                  (v) this Agreement has been duly executed and delivered by the
         Seller and, assuming due authorization, execution and delivery by the
         other parties hereto, constitutes a valid and binding obligation of the
         Seller enforceable against it in accordance with its terms (subject to
         applicable bankruptcy and insolvency laws and other similar laws
         affecting the enforcement of the rights of creditors generally);

                  (vi) there are no actions, suits or proceedings pending or, to
         the knowledge of the Seller, threatened against the Seller, before or
         by any court, administrative agency, arbitrator or governmental body
         (i) with respect to any of the transactions contemplated by this
         Agreement or (ii) with respect to any other matter which in the
         judgment of the Seller will be determined adversely to the Seller and
         will if determined adversely to the Seller materially and adversely
         affect the Seller's ability to enter into this Agreement or perform its
         obligations under this Agreement; and the Seller is not in default with
         respect to any order of any court, administrative agency, arbitrator or
         governmental body so as to materially and adversely affect the
         transactions contemplated by this Agreement; and



                                      -32-

<PAGE>



                  (vii) immediately prior to the transfer and assignment to the
         Trustee, each Mortgage Note and each Mortgage were not subject to an
         assignment or pledge, and the Seller had good and marketable title to
         and was the sole owner thereof and had full right to transfer and sell
         such Mortgage Loan to the Trustee free and clear of any encumbrance,
         equity, lien, pledge, charge, claim or security interest.



                                      -33-

<PAGE>



                                   ARTICLE III

                 Administration and Servicing of Mortgage Loans

         Section 3.01. MASTER SERVICER. The Mortgage Loans shall be serviced
pursuant to the Servicing Agreements. The Trustee shall furnish the Master
Servicer with any powers of attorney and other documents in form as provided to
it necessary or appropriate to enable the Master Servicer to service and
administer the related Mortgage Loans and REO Property.

         The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; PROVIDED, HOWEVER, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.

         Upon receipt of a request by the Master Servicer, the Trustee shall
release within five Business Days the related Mortgage File to the Master
Servicer and execute and deliver to the Master Servicer, without recourse, a
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Security Instrument
(furnished by the Master Servicer), together with the Mortgage Note with written
evidence of cancellation thereon; PROVIDED, HOWEVER, that in the case of a
Mortgage Loan as to which the related Mortgaged Property is located in
California, the related Mortgage File shall be released upon notification from
the Master Servicer that such party reasonably expects that payment in full will
be received promptly. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Certificate
Account.

         The Trustee shall execute and deliver to the Master Servicer any court
pleadings, requests for trustee's sale or other documents necessary or desirable
to (i) the foreclosure or trustee's sale with respect to a Mortgaged Property;
(ii) any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Security Instrument; (iii) obtain a deficiency judgment against
the Mortgagor; or (iv) enforce any other rights or remedies provided by the
Mortgage Note or Security Instrument or otherwise available at law or equity.

         Section 3.02. REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee shall act in accordance herewith to assure continuing
treatment of such REMIC as a REMIC, and the Trustee shall comply with any
directions of the Seller or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to Section 2.04, accept any contribution to any REMIC
after the Startup Day without receipt of a REMIC Opinion.


                                      -34-

<PAGE>




         Section 3.03. REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
Within 15 days after each Distribution Date, the Trustee shall, in accordance
with industry standards, file with the Commission via the Electronic Data
Gathering and Retrieval System ("EDGAR"), a Form 8-K with a copy of the
statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30, 2001, the Trustee shall, in accordance with
industry standards and only if instructed by the Seller, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to March
30, 2001, the Trustee shall file a Form 10-K, in substance conforming to
industry standards, with respect to the Trust Fund. The Seller hereby grants to
the Trustee a limited power of attorney to execute and file each such document
on behalf of the Seller. Such power of attorney shall continue until either the
earlier of (i) receipt by the Trustee from the Seller of written termination of
such power of attorney and (ii) the termination of the Trust Fund. The Seller
agrees to promptly furnish to the Trustee, from time to time upon request, such
further information, reports and financial statements within its control related
to this Agreement and the Mortgage Loans as the Trustee reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The
Trustee shall have no responsibility to file any items other than those
specified in this Section 3.03; provided, however, the Trustee will cooperate
with the Seller in connection with any additional filings with respect to the
Trust Fund as the Seller deems necessary under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Copies of all reports filed by the
Trustee under the Exchange Act shall be sent to: the Seller c/o Bear, Stearns &
Co. Inc., Attn: Managing Director-Analysis and Control, One Metrotech Center
North, Brooklyn, New York 11202-3859. Fees and expenses incurred by the Trustee
in connection with this Section 3.03 shall not be reimbursable from the Trust
Fund.

         Section 3.04. UCC. The Trustee agrees to file continuation statements
for any Uniform Commercial Code financing statements which the Seller has
informed the Trustee were filed in connection with the Trust.


                                      -35-

<PAGE>




                                   ARTICLE IV

                                    Accounts

         Section 4.01. CERTIFICATE ACCOUNT. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Certificate Account as a segregated trust account or accounts. The Trustee
will deposit in the Certificate Account as identified by the Master Servicer and
as received, the following amounts:

                  (i) Any amounts withdrawn from a Protected Account;

                  (ii) Any Monthly Advance and any Compensating Interest
         Payments;

                  (iii) Any Insurance Proceeds or Liquidation Proceeds received
         by or on behalf of the Trustee which were not deposited in a Protected
         Account;

                  (iv) The Repurchase Price with respect to any Mortgage Loans
         purchased by EMC pursuant to Sections 2.02 or 2.03, any amounts which
         are to be treated pursuant to Section 2.04 as the payment of such a
         Repurchase Price, and all proceeds of any Mortgage Loans or property
         acquired in connection with a purchase pursuant to any Servicing
         Agreements or the optional termination of the Trust;

                  (v) Any amounts required to be deposited with respect to
         losses on investments of deposits in an Account; and

                  (vi) Any other amounts received by or on behalf of the Master
         Servicer or the Trustee and required to be deposited in the Certificate
         Account pursuant to this Agreement.

         (b) All amounts deposited to the Certificate Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.

         (c) The Certificate Account shall constitute a trust account of the
Trust Fund segregated on the books of the Trustee and held by the Trustee in
trust in its Corporate Trust Office, and the Certificate Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee or
the Master Servicer (whether made directly, or indirectly through a liquidator
or receiver of the Trustee or the Master Servicer). The amount at any time
credited to the Certificate Account shall be (i) fully insured by the FDIC to
the maximum coverage provided thereby or (ii) invested in the name of the
Trustee, in such Permitted Investments selected by the Trustee or deposited in
demand deposits with such depository institutions as selected by the Trustee,
provided that time deposits of such depository institutions would be a Permitted
Investment. All Permitted Investments shall mature or be subject to redemption
or withdrawal on or before, and shall be held until, the next succeeding
Distribution Date if the obligor for such Permitted Investment is the Trustee
or, if such obligor is any other Person, the Business Day preceding such
Distribution Date. All investment earnings on amounts on


                                      -36-

<PAGE>



deposit in the Certificate Account from time to time shall be for the account of
the Trustee. The Trustee shall be permitted to withdraw any and all investment
earnings from the Certificate Account at any time. If there is any loss on a
Permitted Investment or demand deposit, the Trustee shall deposit the amount of
the loss in the Certificate Account. With respect to the Certificate Account and
the funds deposited therein, the Trustee shall take such action as may be
necessary to ensure that the Certificateholders shall be entitled to the
priorities afforded to such a trust account (in addition to a claim against the
estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e), if applicable, or
any applicable comparable state statute applicable to state chartered banking
corporations.

         Section 4.02. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE CERTIFICATE
ACCOUNT. (a) The Trustee will, from time to time on demand of the Master
Servicer, make or cause to be made such withdrawals or transfers from the
Certificate Account as the Master Servicer has designated for such transfer or
withdrawal pursuant to the Servicing Agreements. The Trustee may clear and
terminate the Certificate Account pursuant to Section 10.01 and remove amounts
from time to time deposited in error.

         (b) On each Distribution Date, the Trustee shall pay the amount
distributable to the Holders of the Certificates in accordance with Section 6.01
from the funds in the Certificate Account. In addition, on each Distribution
Date, the Trustee shall pay the PMI Insurer, the PMI Insurance Premium for such
Distribution Date from the funds in the Certificate Account. The Trustee shall
direct any investments of the Certificate Account and may retain for its own
account the amount of investment earnings, net of losses, from the Certificate
Account.

         (c) On an ongoing basis, the Trustee shall withdraw from the
Certificate Account any expenses recoverable by the Trustee pursuant to Sections
7.01 and 9.05.


                                      -37-

<PAGE>

                                    ARTICLE V

                                  Certificates

     Section 5.01. CERTIFICATES. (a) The Depository, the Seller and the Trustee
have entered into a Depository Agreement dated as of December 28, 2000 (the
"Depository Agreement"). Except for the Residual Certificates, the Private
Certificates and the Individual Certificates and as provided in Subsection
5.01(b), the Certificates shall at all times remain registered in the name of
the Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to a successor to the
Depository; (ii) ownership and transfers of registration of such Certificates 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 such Certificate Owners of the
respective Class of Certificates for purposes of exercising the rights of
Certificateholders 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 Certificate 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.

     The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Trustee cause such Class to become
Global Certificates, the Trustee and the Seller will take such action as may be
reasonably required to cause the Depository to accept such Class or Classes for
trading if it may legally be so traded.

     All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate 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 Certificate
Owners of the occurrence of any such event and of the availability of
definitive, fully registered Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. 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.

                                      -38-

<PAGE>

     (c) (i) REMIC I will be evidenced by (x) the REMIC I Regular Interests,
which will be uncertificated and non-transferable, are hereby designated as the
"regular interests" and (y) the Class R-I Certificates, which is hereby
designated as the single "residual interest" in REMIC I.





         The REMIC I Regular Interests and the Class R-I Certificates will have
the following designations and pass-through rates, and distributions of
principal and interest thereon shall be allocated to the Corresponding Class of
Certificates in the following manner:


                                               Corresponding Classes
                                                  of Certificates
                                                  ---------------
                                        Pass-      Allocation         Allocation
  REMIC I    Initial Uncertificated    Through          of                of
  Interest   Principal Balance ($)      Rate        Principal         Interest
  --------   ---------------------     -------      ---------         --------
1A                 593,234,900.00        (1)           I-A               I-A
1B                  12,107,088.00        (1)           (3)               (3)
1C                          50.00        (1)          R-II               R-II
2A                 442,108,000.00        (2)          II-A               II-A
2B                   9,022,741.00        (2)           (3)               (3)
R-2                         50.00        (1)           N/A               N/A
---------------
(1) During each Interest Accrual Period, REMIC I Regular Interests 1A, 1B and 1C
and the Class R-II Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 1 Mortgage
Loans.

(2) During each Interest Accrual Period, REMIC I Regular Interests 2A and 2B
will bear interest at a variable Pass-Through Rate equal to the weighted average
of the Net Rates of the Group 2 Mortgage Loans.

(3) The corresponding Classes of Certificates for these REMIC I Regular
Interests are all the Class B Certificates. Principal and interest shall be
allocable to the Class B Certificates and shall be apportioned among such
Certificates in the same order and priority as payments are to be made on such
Certificates.

     Principal and interest shall be payable to, and shortfalls, losses and
prepayments are allocable to, the REMIC I Regular Interests in the same order
and priority as payments are to be made on, and shortfalls, losses and
prepayments are allocable to, the Corresponding Classes of Certificates.

(ii) REMIC II will be evidenced by (x) the Certificates (other than the Class R
Certificates) (the "REMIC II Regular Certificates"), which are hereby designated
as the "regular interests" in REMIC II and have the principal balances and
accrue interest at the Pass-Through Rates equal to those set forth in Section
5.01(d) and (y) the Class R-II Certificate, which is hereby designated as the
single "residual interest" in REMIC II.

     (d) The Classes of the Certificates shall have the following designations,
initial principal amounts and Pass-Through Rates:


        DESIGNATION      INITIAL PRINCIPAL AMOUNT         PASS-THROUGH RATE
        -----------      ------------------------         -----------------
     ------------------------------------------------------------------------

                                      -39-

<PAGE>

             I-A            $     593,234,900                    (1)
          I-A-IO            $    593,234,900*                  0.20173%
            II-A            $     442,108,000                    (2)
             R-I            $              50                    (3)
            R-II            $              50                    (3)
             B-1            $      10,564,000                    (4)
             B-2            $       4,226,000                    (4)
             B-3            $       2,113,000                    (4)
             B-4            $       1,585,000                    (4)
             B-5            $       1,056,000                    (4)
             B-6            $       1,585,829                    (4)

-------------
*     Notional Amount.

(1)  The Class I-A Certificates will bear interest at a variable Pass-Through
Rate equal to (a) the weighted average of the Net Rates of the Group 1 Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balances of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date (b) minus 0.20173%. The Pass-Through
Rate with respect to the first Interest Accrual Period is expected to be
approximately 7.500% per annum.

(2)  The Class II-A Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 2 Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balances of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.
The Pass-Through Rate with respect to the first Interest Accrual Period is
expected to be approximately 7.4903% per annum.

(3)  The Class R-I and Class R-II Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 1
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual Period is expected to be approximately
7.7017% per annum.

(4)  The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates will bear interest at a variable Pass-Through Rate equal to the
weighted average of the REMIC I Regular Interest 1B and REMIC I Regular Interest
2B, each weighted based on its Uncertificated Principal Balance. The
Pass-Through Rate with respect to the first Interest Accrual Period is expected
to be approximately 7.6115% per annum.

     (e) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Trust Fund has been
designated as the "latest possible maturity date" for the REMIC I Regular
Interests and the Certificates.


                                      -40-


<PAGE>

     (f) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates, interest shall be
calculated, on the basis of a 360-day year comprised of twelve 30-day months,
based upon the respective Pass-Through Rate set forth, or determined as
provided, above and the Current Principal Amount or Notional Amount of such
Class applicable to such Distribution Date.

     (g) The Certificates shall be substantially in the forms set forth in
Exhibits A-1, A-2 and A-3. On original issuance, the Trustee shall sign,
countersign and shall deliver them at the direction of the Seller. Pending the
preparation of definitive Certificates of any Class, the Trustee may sign and
countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Seller will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office of the Trustee, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and countersign and deliver in exchange therefor a like
aggregate principal amount, in authorized denominations for such Class, of
definitive Certificates of the same Class. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits as
definitive Certificates.

     (h) Each Class of Book-Entry Certificates will be registered as a single
Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $1,000
and in each case increments of $1.00 in excess thereof, and (ii) in the case of
the Offered Subordinate Certificates, $25,000 and increments of $1.00 in excess
thereof, except that one Certificate of each such Class may be issued in a
different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign Physical Certificates all in an aggregate principal amount that
shall equal the Current Principal Amount of such Class on the Closing Date. The
Class B-4, Class B-5, Class B-6 Certificates will be issued in certificated
fully-registered form in minimum denominations of $25,000 and increments of
$1.00 in excess thereof, except that one Certificate of each such Class may be
issued in a different amount so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Current Principal Amount
of such Class on the Closing Date. The Class R-I and Class R-II Certificates
shall each be issued in certificated fully-registered form in the denomination
of $50 and $50, respectively. Each Class of Global Certificates, if any, shall
be issued in fully registered form in minimum dollar denominations of $50,000
and integral multiples of $1.00 in excess thereof, except that one Certificate
of each Class may be in a different denomination so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Current Principal Amount of such Class on the Closing Date. On the Closing Date,
the Trustee shall execute and countersign (i) in the case of each Class of
Offered Certificates, the Certificate in the entire Current Principal Amount of
the

                                      -41-

<PAGE>



respective Class and (ii) in the case of each Class of Private Certificates,
Individual Certificates all in an aggregate principal amount that shall equal
the Current Principal Amount of each such respective Class on the Closing Date.
The Certificates referred to in clause (i) and if at any time there are to be
Global Certificates, the Global Certificates shall be delivered by the Seller to
the Depository or pursuant to the Depository's instructions, shall be delivered
by the Seller on behalf of the Depository to and deposited with the DTC
Custodian. The Trustee shall sign the Certificates by facsimile or manual
signature and countersign them by manual signature on behalf of the Trustee by
one or more authorized signatories, each of whom shall be Responsible Officers
of the Trustee or its agent. A Certificate bearing the manual and facsimile
signatures of individuals who were the authorized signatories of the Trustee or
its agent at the time of issuance shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.

     (i) No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate the
manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.

     (j) The Closing Date is hereby designated as the "startup" day of each
REMIC within the meaning of Section 860G(a)(9) of the Code.

     (k) For federal income tax purposes, each REMIC shall have a tax year that
is a calendar year and shall report income on an accrual basis.

     (l) The Trustee on behalf of the Trust shall cause each REMIC to timely
elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of any
Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.

     Section 5.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. (a)
The Trustee shall maintain at its Corporate Trust Office a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided.

         (b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Physical Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.

         (c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate


                                      -42-

<PAGE>



only as provided herein. In addition to the provisions of Subsection 5.02(h),
the following restrictions shall apply with respect to the transfer and
registration of transfer of an Individual Certificate to a transferee that takes
delivery in the form of an Individual Certificate:

          (i) The Trustee shall register the transfer of an Individual
     Certificate if the requested transfer is being made to a transferee who has
     provided the Trustee with a Rule 144A Certificate or comparable evidence as
     to its QIB status.

          (ii) The Trustee shall register the transfer of any Individual
     Certificate if (x) the transferor has advised the Trustee in writing that
     the Certificate is being transferred to an Institutional Accredited
     Investor; and (y) prior to the transfer the transferee furnishes to the
     Trustee an Investment Letter (and the Trustee shall be fully protected in
     so doing), provided that, if based upon an Opinion of Counsel to the effect
     that the delivery of (x) and (y) above are not sufficient to confirm that
     the proposed transfer is being made pursuant to an exemption from, or in a
     transaction not subject to, the registration requirements of the Securities
     Act and other applicable laws, the Trustee shall as a condition of the
     registration of any such transfer require the transferor to furnish such
     other certifications, legal opinions or other information prior to
     registering the transfer of an Individual Certificate as shall be set forth
     in such Opinion of Counsel.

     (d) Subject to Subsection 5.02(h), so long as a Global Certificate of such
Class is outstanding and is held by or on behalf of the Depository, transfers of
beneficial interests in such Global Certificate, or transfers by holders of
Individual Certificates of such Class to transferees that take delivery in the
form of beneficial interests in the Global Certificate, may be made only in
accordance with this Subsection 5.02(d) and in accordance with the rules of the
Depository:

          (i) In the case of a beneficial interest in the Global Certificate
     being transferred to an Institutional Accredited Investor, such transferee
     shall be required to take delivery in the form of an Individual Certificate
     or Certificates and the Trustee shall register such transfer only upon
     compliance with the provisions of Subsection 5.02(c)(ii).

          (ii) In the case of a beneficial interest in a Class of Global
     Certificates being transferred to a transferee that takes delivery in the
     form of an Individual Certificate or Certificates of such Class, except as
     set forth in clause (i) above, the Trustee shall register such transfer
     only upon compliance with the provisions of Subsection 5.02(c)(i).

          (iii) In the case of an Individual Certificate of a Class being
     transferred to a transferee that takes delivery in the form of a beneficial
     interest in a Global Certificate of such Class, the Trustee shall register
     such transfer if the transferee has provided the Trustee with a Rule 144A
     Certificate or comparable evidence as to its QIB status.

          (iv) No restrictions shall apply with respect to the transfer or
     registration of transfer of a beneficial interest in the Global Certificate
     of a Class to a transferee that takes delivery in the form of a beneficial
     interest in the Global Certificate of such Class; provided that each such
     transferee shall be deemed to have made such representations and warranties
     contained in the Rule 144A Certificate as are sufficient to establish that
     it is a QIB.


                                      -43-

<PAGE>


     (e) Subject to Subsection 5.02(h), an exchange of a beneficial interest in
a Global Certificate of a Class for an Individual Certificate or Certificates of
such Class, an exchange of an Individual Certificate or Certificates of a Class
for a beneficial interest in the Global Certificate of such Class and an
exchange of an Individual Certificate or Certificates of a Class for another
Individual Certificate or Certificates of such Class (in each case, whether or
not such exchange is made in anticipation of subsequent transfer, and, in the
case of the Global Certificate of such Class, so long as such Certificate is
outstanding and is held by or on behalf of the Depository) may be made only in
accordance with this Subsection 5.02(e) and in accordance with the rules of the
Depository:

          (i) A holder of a beneficial interest in a Global Certificate of a
     Class may at any time exchange such beneficial interest for an Individual
     Certificate or Certificates of such Class.

          (ii) A holder of an Individual Certificate or Certificates of a Class
     may exchange such Certificate or Certificates for a beneficial interest in
     the Global Certificate of such Class if such holder furnishes to the
     Trustee a Rule 144A Certificate or comparable evidence as to its QIB
     status.

          (iii) A holder of an Individual Certificate of a Class may exchange
     such Certificate for an equal aggregate principal amount of Individual
     Certificates of such Class in different authorized denominations without
     any certification.

          (f) (i) Upon acceptance for exchange or transfer of an Individual
     Certificate of a Class for a beneficial interest in a Global Certificate of
     such Class as provided herein, the Trustee shall cancel such Individual
     Certificate and shall (or shall request the Depository to) endorse on the
     schedule affixed to the applicable Global Certificate (or on a continuation
     of such schedule affixed to the Global Certificate and made a part thereof)
     or otherwise make in its books and records an appropriate notation
     evidencing the date of such exchange or transfer and an increase in the
     certificate balance of the Global Certificate equal to the certificate
     balance of such Individual Certificate exchanged or transferred therefor.

          (ii) Upon acceptance for exchange or transfer of a beneficial interest
     in a Global Certificate of a Class for an Individual Certificate of such
     Class as provided herein, the Trustee shall (or shall request the
     Depository to) endorse on the schedule affixed to such Global Certificate
     (or on a continuation of such schedule affixed to such Global Certificate
     and made a part thereof) or otherwise make in its books and records an
     appropriate notation evidencing the date of such exchange or transfer and a
     decrease in the certificate balance of such Global Certificate equal to the
     certificate balance of such Individual Certificate issued in exchange
     therefor or upon transfer thereof.

     (g) The Securities Legend shall be placed on any Individual Certificate
issued in exchange for or upon transfer of another Individual Certificate or of
a beneficial interest in a Global Certificate.


                                      -44-

<PAGE>


     (h) Subject to the restrictions on transfer and exchange set forth in this
Section 5.02, the holder of any Individual Certificate may transfer or exchange
the same in whole or in part (in an initial certificate balance equal to the
minimum authorized denomination set forth in Section 5.01(h) above or any
integral multiple of $1.00 in excess thereof) by surrendering such Certificate
at the Corporate Trust Office, or at the office of any transfer agent, together
with an executed instrument of assignment and transfer satisfactory in form and
substance to the Trustee in the case of transfer and a written request for
exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the Depository,
cause the Depository (or its nominee) to notify the Trustee in writing of a
request for transfer or exchange of such beneficial interest for an Individual
Certificate or Certificates. Following a proper request for transfer or
exchange, the Trustee shall, within five Business Days of such request made at
such Corporate Trust Office, sign, countersign and deliver at such Corporate
Trust Office, to the transferee (in the case of transfer) or holder (in the case
of exchange) or send by first class mail at the risk of the transferee (in the
case of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate Fractional Undivided
Interest and in such authorized denomination or denominations as may be
requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Corporate Trust Office by the
registered holder in person, or by a duly authorized attorney-in-fact.

     (i) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of a like Class and aggregate
Fractional Undivided Interest, upon surrender of the Certificates to be
exchanged at any such office or agency; PROVIDED, HOWEVER, that no Certificate
may be exchanged for new Certificates unless the original Fractional Undivided
Interest represented by each such new Certificate (i) is at least equal to the
minimum authorized denomination or (ii) is acceptable to the Seller as indicated
to the Trustee in writing. Whenever any Certificates are so surrendered for
exchange, the Trustee shall sign and countersign and the Trustee shall deliver
the Certificates which the Certificateholder making the exchange is entitled to
receive.

     (j) If the Trustee so requires, every Certificate presented or surrendered
for transfer or exchange shall be duly endorsed by, or be accompanied by a
written instrument of transfer, with a signature guarantee, in form satisfactory
to the Trustee, duly executed by the holder thereof or his or her attorney duly
authorized in writing.

     (k) No service charge shall be made for any transfer or exchange of
Certificates, 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 Certificates.

     (l) The Trustee shall cancel all Certificates surrendered for transfer or
exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.

     (m) The following legend shall be placed on the Class R-I, Class R-II,
Class B-4, Class B-5 and Class B-6 Certificates, whether upon original issuance
or upon issuance of any other Certificate of any such Class in exchange therefor
or upon transfer thereof:


                                      -45-

<PAGE>




     THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
     BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH
     IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
     1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986,
     AS AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE
     AND THE SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS:
     (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED
     UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING,
     BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, PTE
     91-38, PTE 90-1, PTE 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY
     ADDITIONAL FIDUCIARY OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER
     SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A
     BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A
     REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF
     AN INSTITUTIONAL ACCREDITED INVESTOR.

     Section 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. (a) If (i)
any mutilated Certificate is surrendered to the Trustee, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Trustee and shall be of no further effect and evidence
no rights.

     (b) Upon the issuance of any new Certificate under this Section 5.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any duplicate Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.

     Section 5.04. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Seller, the Trustee and any agent
of the Seller or the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 6.01 and for all other purposes whatsoever.
Neither the Seller, the Trustee nor any agent of the Seller or the Trustee shall
be affected by notice to the contrary. No Certificate shall be deemed duly
presented for a transfer effective on any Record Date unless the Certificate to
be transferred is presented no later than the close of business on the third
Business Day preceding such Record Date.


                                      -46-

<PAGE>


     Section 5.05. TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES. (a) Residual
Certificates, or interests therein, may not be transferred without the prior
express written consent of the Tax Matters Person and the Seller. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Seller and the Trustee with an affidavit that the proposed
transferee is a Permitted Transferee (and, unless the Tax Matters Person and the
Seller consent to the transfer to a person who is not a U.S. Person, an
affidavit that it is a U.S. Person) as provided in Subsection 5.05(b).

     (b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Seller an affidavit in the form attached
hereto as Exhibit E stating, among other things, that as of the date of such
transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any
person who is not a Permitted Transferee. The Tax Matters Person shall not
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made in the affidavit issued pursuant to the preceding sentence is
not true. Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer, sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Tax Matters Person or the Seller shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Subsection 5.05(b) or for making payments due on such
Residual Certificate to the purported Holder thereof or taking any other action
with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, the Trustee and the Seller, as
applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that was
in fact not a permitted transferee under this Subsection 5.05(b) at the time it
became a Holder all payments made on such Residual Certificate. Each Holder of a
Residual Certificate, by acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this Subsection 5.05(b) and to any amendment
of this Agreement deemed necessary (whether as a result of new legislation or
otherwise) by counsel of the Tax Matters Person or the Seller to ensure that the
Residual Certificates are not transferred to any Person who is not a Permitted
Transferee and that any transfer of such Residual Certificates will not cause
the imposition of a tax upon the Trust or cause any REMIC to fail to qualify as
a REMIC.

     (c) Unless the Tax Matters Person shall have consented in writing (which
consent may be withheld in the Tax Matters Person's sole discretion), the
Residual Certificates (including a beneficial interest therein) may not be
purchased by or transferred to any person who is not a United States Person.


                                      -47-

<PAGE>




     (d) By accepting a Residual Certificate, the purchaser thereof agrees to be
a Tax Matters Person, and appoints the Trustee to act as its agent with respect
to all matters concerning the tax obligations of the Trust.

     Section 5.06. RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES. (a) No
offer, sale, transfer or other disposition (including pledge) of any Certificate
shall be made by any Holder thereof unless registered under the Securities Act,
or an exemption from the registration requirements of the Securities Act and any
applicable state securities or "Blue Sky" laws is available and the prospective
transferee (other than the Seller) of such Certificate signs and delivers to the
Trustee an Investment Letter, if the transferee is an Institutional Accredited
Investor, in the form set forth as Exhibit F-l hereto, or a Rule 144A
Certificate, if the transferee is a QIB, in the form set forth as Exhibit F-2
hereto. Notwithstanding the provisions of the immediately preceding sentence, no
restrictions shall apply with respect to the transfer or registration of
transfer of a beneficial interest in any Certificate that is a Global
Certificate of a Class to a transferee that takes delivery in the form of a
beneficial interest in the Global Certificate of such Class provided that each
such transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that it is
a QIB. In the case of a proposed transfer of any Certificate to a transferee
other than a QIB, the Trustee may require an Opinion of Counsel that such
transaction is exempt from the registration requirements of the Securities Act.
The cost of such opinion shall not be an expense of the Trustee or the Trust
Fund.

     (b) The Class B-4, Class B-5 and Class B-6 Certificates shall each bear a
Securities Legend.

     Section 5.07. ERISA RESTRICTIONS. (a) Subject to the provisions of
subsection (b), no Residual Certificates or any Class B-4, Class B-5 or Class
B-6 Certificates may be acquired directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of ERISA and/or Section 4975 of the Code, unless the proposed transferee
provides either (i) the Trustee and the Master Servicer with an Opinion of
Counsel satisfactory to the Trustee and the Master Servicer, which opinion will
not be at the expense of the Trustee or the Master Servicer, that the purchase
of such Certificates by or on behalf of such Plan is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Trustee or the Master Servicer to any obligation in addition to those undertaken
in the Agreement or (ii) a representation or certification to the Trustee (upon
which the Trustee is authorized to rely) to the effect that the proposed
transfer and/or holding of such a Certificate and the servicing, management and
operation of the Trust: (I) will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code which is not covered under an
individual or class prohibited transaction exemption including but not limited
to Department of Labor Prohibited Transaction Exemption ("PTE") 84-14 (Class
Exemption for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (II) will not
subject the Seller, the Master Servicer or the Trustee to any obligation in
addition to those undertaken in the Agreement.


                                      -48-

<PAGE>


     (b) Any Person acquiring an interest in a Global Certificate which is a
Class B-4, Class B-5 or Class B-6 Certificate, by acquisition of such
Certificate, shall be deemed to have represented to the Trustee that either: (i)
it is not acquiring an interest in such Certificate directly or indirectly by,
or on behalf of, an employee benefit plan or other retirement arrangement which
is subject to Title I of ERISA and/or Section 4975 of the Code, or (ii) the
transfer and/or holding of an interest in such Certificate to that Person and
the subsequent servicing, management and/or operation of the Trust and its
assets: (I) will not result in any prohibited transaction which is not covered
under an individual or class prohibited transaction exemption, including, but
not limited to, PTE 84-14, PTE 91-38, PTE 90-1, PTE 95-60 or PTE 96-23 and (II)
will not subject the Seller, the Master Servicer or the Trustee to any
obligation in addition to those undertaken in the Agreement.

     (c) The Trustee will not be required to monitor, determine or inquire as to
compliance with the transfer restrictions with respect to the Global
Certificates. Any attempted or purported transfer of any Certificate in
violation of the provisions of Subsections (a) or (b) above shall be void AB
INITIO and such Certificate shall be considered to have been held continuously
by the prior permitted Certificateholder. Any transferor of any Certificate in
violation of such provisions, shall indemnify and hold harmless the Trustee and
the Master Servicer from and against any and all liabilities, claims, costs or
expenses incurred by the Trustee or the Master Servicer as a result of such
attempted or purported transfer. The Trustee shall have no liability for
transfer of any such Global Certificates in or through book-entry facilities of
any Depository or between or among Depository Participants or Certificate Owners
made in violation of the transfer restrictions set forth herein.

     Section 5.08. RULE 144A INFORMATION. For so long as any Certificates are
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
of the Securities Act, (1) the Seller will provide or cause to be provided to
any holder of such Certificates and any prospective purchaser thereof designated
by such a holder, upon the request of such holder or prospective purchaser, the
information required to be provided to such holder or prospective purchaser by
Rule 144A(d)(4) under the Securities Act; and (2) the Seller shall update such
information from time to time in order to prevent such information from becoming
false and misleading and will take such other actions as are necessary to ensure
that the safe harbor exemption from the registration requirements of the
Securities Act under Rule 144A is and will be available for resales of such
Certificates conducted in accordance with Rule 144A.


                                      -49-

<PAGE>




                                   ARTICLE VI

                         Payments to Certificateholders

     Section 6.01. DISTRIBUTIONS ON THE CERTIFICATES. (a) Interest and principal
on the Certificates will be distributed monthly on each Distribution Date,
commencing in January 2001, in an aggregate amount equal to the Available Funds
for such Distribution Date.

          (i) SENIOR CERTIFICATES. (A) On each Distribution Date, the Group 1
     Available Funds will be distributed in the following order of priority
     among the Group 1 Senior Certificates, in each case to the extent of
     remaining Group 1 Available Funds:

               FIRST, the Accrued Certificate Interest on each Class of Group 1
          Senior Certificates for such Distribution Date, pro rata, based on the
          Accrued Certificate Interest thereon, less any Net Interest Shortfalls
          allocated thereto in accordance with Section 6.03(g); provided, that
          if the Group 1 Undercollateralized Amount is greater than zero on such
          Distribution Date, the amount payable to the Group 1 Senior
          Certificates pursuant to this clause FIRST shall be limited to the
          interest portion of the Group 1 Available Funds on such Distribution
          Date;

               SECOND, any Accrued Certificate Interest on each Class of Group 1
          Senior Certificates payable pursuant to clause FIRST above remaining
          undistributed from previous Distribution Dates, to the extent of
          remaining Group 1 Available Funds, any shortfall in available amounts
          being allocated among such Classes in proportion to the amount of such
          Accrued Certificate Interest remaining undistributed for each such
          Class for such Distribution Date;

               THIRD, to the Class II-A Certificates in respect of interest, an
          amount equal to the Group 1 Cross-Collateralized Interest Amount for
          that Distribution Date;

               FOURTH, to the Group 1 Senior Certificates in reduction of the
          Current Principal Amounts, the Group 1 Senior Optimal Principal
          Amount, sequentially, in the following order, to the Class R-I, Class
          R-II and Class I-A Certificates, until the Current Principal Amount
          thereof has been reduced to zero (subject to clause 6.01(b) below);

               FIFTH, if the Current Principal Amount of the Class I-A
          Certificates has been reduced to zero and the Cross-Collateralization
          Test has been satisfied, an amount equal to the principal portion of
          the Group 1 Available Funds remaining after distributions pursuant to
          clause FOURTH above shall be paid to the Class II-A Certificates, in
          reduction of the Current Principal Amount thereof, until the Current
          Principal Amount thereof has been reduced to zero; and

               SIXTH, to the Class II-A Certificates, an amount equal to the
          lesser of (a) the principal portion of the Group 1 Available Funds
          remaining after distributions


                                      -50-

<PAGE>



          pursuant to clause FOURTH above, and (b) an amount equal to the Group
          2 Undercollateralized Amount for such Distribution Date, in reduction
          of the Current Principal Amount thereof, until the Current Principal
          Amount thereof has been reduced to zero.

     (B) On each Distribution Date, the Group 2 Available Funds will be
     distributed in the following order of priority among the Group 2 Senior
     Certificates, in each case to the extent of remaining Group 2 Available
     Funds:

               FIRST, the Accrued Certificate Interest on the Class II-A
          Certificates for such Distribution Date, less any Net Interest
          Shortfalls allocated thereto in accordance with Section 6.03(g);
          provided, that if the Group 2 Undercollateralized Amount is greater
          than zero on such Distribution Date, the amount payable to the Group 2
          Senior Certificates pursuant to this clause FIRST shall be limited to
          the interest portion of the Group 2 Available Funds on such
          Distribution Date;

               SECOND, any Accrued Certificate Interest on the Class II-A
          Certificates payable pursuant to clause FIRST above remaining
          undistributed from previous Distribution Dates, to the extent of
          remaining Group 2 Available Funds, any shortfall in available amounts
          being allocated to such Class in proportion to the amount of such
          Accrued Certificate Interest remaining undistributed for such Class
          for such Distribution Date;

               THIRD, to the Group 1 Senior Certificates in respect of interest,
          pro rata, based on the Pass-Through Rates thereof, an amount equal to
          the Group 2 Cross- Collateralized Interest Amount for such
          Distribution Date;

               FOURTH, to the Class II-A Certificates, the Group 2 Senior
          Optimal Principal Amount, in reduction of the Current Principal Amount
          thereof, until the Current Principal Amount thereof has been reduced
          to zero; and

               FIFTH, if the Current Principal Amount of the Class II-A
          Certificates has been reduced to zero and the Cross-Collateralization
          Test has been satisfied, an amount equal to the principal portion of
          the Group 2 Available Funds remaining after distributions pursuant to
          clause FOURTH above shall be paid to the Class I-A Certificates, in
          reduction of the Current Principal Amount thereof, until the Current
          Principal Amount thereof has been reduced to zero; and

               SIXTH, to the Class I-A Certificates, an amount equal to the
          lesser of (a) the principal portion of the Group 2 Available Funds
          remaining after distributions pursuant to clause FOURTH above, and (b)
          the Group 1 Undercollateralized Amount for such Distribution Date, in
          reduction of the Current Principal Amount thereof, until the Current
          Principal Amount thereof has been reduced to zero.

     (ii) SUBORDINATE CERTIFICATES. On each Distribution Date, the Group 1
     Available Funds and the Group 2 Available Funds remaining after the
     distributions described above under Section 6.01(a)(i) will be distributed
     among the Subordinate Certificates sequentially, in the


                                      -51-

<PAGE>



     following order, to the Class B-1, Class B-2, Class B-3, Class B-4, Class
     B-5 and Class B-6 Certificates, in each case to the extent of remaining
     Available Funds and up to an amount equal to and in the following order:
     (a) the Accrued Certificate Interest thereon for such Distribution Date,
     (b) any Accrued Certificate Interest thereon remaining undistributed from
     previous Distribution Dates and (c) such Class's Allocable Share for such
     Distribution Date.

     (b) On each Distribution Date after the Cross-Over Date, distributions of
principal on the outstanding Group 1 Senior Certificates pursuant to clause (a)
will be made pro rata among all Group 1 Senior Certificates, regardless of the
allocation, or sequential nature, of principal payments described in priority
FOURTH of Section 6.01(a)(i)(A), based upon the then Current Principal Amounts
of such Group 1 Senior Certificates.

     (c) "Pro rata" distributions among Classes of Certificates will be made in
proportion to the then Current Principal Amount of such Classes.

     (d) On each Distribution Date, any Available Funds remaining after payment
of interest and principal as described above will be distributed to the Class
R-II Certificates.

     (e) No Accrued Certificate Interest will be payable with respect to any
Class of Certificates after the Distribution Date on which the Current Principal
Amount of such Certificate has been reduced to zero.

     (f) If on any Distribution Date the Available Funds for the Senior
Certificates in any Certificate Group is less than the Accrued Certificate
Interest on the related Senior Certificates for such Distribution Date prior to
reduction for Net Interest Shortfall and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
Senior Certificates in such Certificate Group in proportion to the respective
amounts of Accrued Certificate Interest that would have been allocated thereto
in the absence of such Net Interest Shortfall and/or Realized Losses for such
Distribution Date. In addition, the amount of any interest shortfalls will
constitute unpaid Accrued Certificate Interest and will be distributable to
holders of the Certificates of the related Classes entitled to such amounts on
subsequent Distribution Dates, to the extent of the applicable Available Funds
after current interest distributions as required herein. Any such amounts so
carried forward will not bear interest. Shortfalls in interest payments will not
be offset by a reduction in the servicing compensation of the Master Servicer or
otherwise, except to the extent of applicable Compensating Interest Payments.

     (g) The expenses and fees of the Trust shall be paid by each of the REMICs,
to the extent that such expenses relate to the assets of each of such respective
REMICs, and all other expenses and fees of the Trust shall be paid pro rata by
each of the REMICs.

     Section 6.02. ALLOCATION OF LOSSES. (a) On or prior to each Determination
Date, the Master Servicer shall determine the amount of any Realized Loss in
respect of each Mortgage Loan that occurred during the immediately preceding
calendar month.

          (b) (i) With respect to any Certificates on any Distribution Date, the
     principal portion of each Realized Loss on a Mortgage Loan shall be
     allocated as follows:


                                      -52-

<PAGE>


                    first, to the Class B-6 Certificates until the Current
     Principal Amount thereof has been reduced to zero;

                    second, to the Class B-5 Certificates until the Current
     Principal Amount thereof has been reduced to zero;

                    third, to the Class B-4 Certificates until the Current
     Principal Amount thereof has been reduced to zero;

                    fourth, to the Class B-3 Certificates until the Current
     Principal Amount thereof has been reduced to zero;

                    fifth, to the Class B-2 Certificates until the Current
     Principal Amount thereof has been reduced to zero;

                    sixth, to the Class B- 1 Certificates until the Current
     Principal Amount thereof has been reduced to zero;

                    seventh, to the Group 1 Senior Certificates (other than the
     Class I-A- IO Certificates) and the Group 2 Senior Certificates, to the
     extent of Realized Losses on the Mortgage Loans in the related Loan Group.

     (c) Notwithstanding the foregoing, no such allocation of any Realized Loss
shall be made on a Distribution Date to any Class of Certificates to the extent
that such allocation would result in the reduction of the aggregate Current
Principal Amounts of all the Certificates as of such Distribution Date, after
giving effect to all distributions and prior allocations of Realized Losses on
such date, to an amount less than the aggregate Scheduled Principal Balance of
all of the Mortgage Loans as of the first day of the month of such Distribution
Date (such limitation, the "Loss Allocation Limitation").

     (d) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class in proportion to their respective
Current Principal Amounts. Any allocation of Realized Losses shall be
accomplished by reducing the Current Principal Amount of the related
Certificates on the related Distribution Date.

     (e) Realized Losses shall be allocated on the Distribution Date in the
month following the month in which such loss was incurred and, in the case of
the principal portion thereof, after giving effect to distributions made on such
Distribution Date.

     (f) On each Distribution Date, the Trustee shall determine the Group 1 and
Group 2 Subordinate Certificate Writedown Amount. Any such Subordinate
Certificate Writedown Amount shall effect a corresponding reduction in the
Current Principal Amount of (i) if prior to the Cross-Over Date, the Current
Principal Amounts of the Subordinate Certificates, in the reverse order of their
numerical Class designations and (ii) from and after the Cross-Over Date, the
Senior


                                      -53-

<PAGE>



Certificates (other than the Class I-A-IO Certificates), which reduction shall
occur on such Distribution Date after giving effect to distributions made on
such Distribution Date.

     (g) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall for such Distribution Date. The interest portion of any
Realized Losses with respect to the Mortgage Loans occurring on or prior to the
Cross-Over Date will not be allocated among any Certificates, but will reduce
the amount of Available Funds on the related Distribution Date. As a result of
the subordination of the Subordinate Certificates, in right of distribution,
such Realized Losses will be borne by the Subordinate Certificates in inverse
order of their numerical Class designations. Following the Cross-Over Date, the
interest portion of Realized Losses on the Mortgage Loans in any Loan Group will
be allocated to the related Senior Certificates.

     Section 6.03. PAYMENTS. (a) On each Distribution Date, other than the final
Distribution Date, the Trustee shall distribute to each Certificateholder of
record on the directly preceding Record Date the Certificateholder's PRO RATA
share of its Class (based on the aggregate Fractional Undivided Interest
represented by such Holder's Certificates) of all amounts required to be
distributed on such Distribution Date to such Class. The Trustee shall calculate
the amount to be distributed to each Class and, based on such amounts, the
Trustee shall determine the amount to be distributed to each Certificateholder.
All of the Trustee's calculations of payments shall be based solely on
information provided to the Trustee by the Master Servicer. The Trustee shall
not be required to confirm, verify or recompute any such information but shall
be entitled to rely conclusively on such information.

     (b) Payment of the above amounts to each Certificateholder shall be made
(i) by check mailed to each Certificateholder entitled thereto at the address
appearing in the Certificate Register or (ii) upon receipt by the Trustee on or
before the fifth Business Day preceding the Record Date of written instructions
from a Certificateholder by wire transfer to a United States dollar account
maintained by the payee at any United States depository institution with
appropriate facilities for receiving such a wire transfer; PROVIDED, HOWEVER,
that the final payment in respect of each Class of Certificates will be made
only upon presentation and surrender of such respective Certificates at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final payment.

     Section 6.04. STATEMENTS TO CERTIFICATEHOLDERS. (a) Concurrently with each
distribution to Certificateholders, the Trustee shall make available via the
Trustee's internet website as set forth below, the following information,
expressed with respect to clauses (i) through (vii) in the aggregate and as a
Fractional Undivided Interest representing an initial Current Principal Amount
of $1,000, in the case of the Class I-A-IO Certificates, a Notional Amount of
$1,000, or in the case of the Residual Certificates, an initial Current
Principal Amount of $50:

          (i) the Current Principal Amount or Notional Amount of each Class of
     Certificates immediately prior to such Distribution Date;

          (ii) the amount of the distribution allocable to principal on each
     applicable Class of Certificates;



                                      -54-

<PAGE>



          (iii) the aggregate amount of interest accrued at the related
     Pass-Through Rate with respect to each Class during the related Interest
     Accrual Period;

          (iv) the Net Interest Shortfall and any other adjustments to interest
     at the related Pass-Through Rate necessary to account for any difference
     between interest accrued and aggregate interest distributed with respect to
     each Class of Certificates;

          (v) the amount of the distribution allocable to interest on each Class
     of Certificates;

          (vi) the Pass-Through Rates for each Class of Certificates with
     respect to such Distribution Date;

          (vii) the Current Principal Amount or Notional Amount of each Class of
     Certificates after such Distribution Date;

          (viii) the amount of any Monthly Advances, Compensating Interest
     Payments and outstanding unreimbursed advances by the Master Servicer or
     the Trustee included in such distribution separately stated for each Loan
     Group;

          (ix) the aggregate amount of any Realized Losses (listed separately
     for each category of Realized Loss and for each Loan Group) during the
     related Prepayment Period and cumulatively since the Cut-off Date and the
     amount and source (separately identified) of any distribution in respect
     thereof included in such distribution;

          (x) with respect to each Mortgage Loan which incurred a Realized Loss
     during the related Prepayment Period, (i) the loan number, (ii) the
     Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
     (ii) the Scheduled Principal Balance of such Mortgage Loan as of the
     beginning of the related Due Period, (iii) the Net Liquidation Proceeds
     with respect to such Mortgage Loan, (iv) the amount, if any, included in
     Net Liquidation Proceeds representing a payment under the PMI Policy and
     (v) the amount of the Realized Loss with respect to such Mortgage Loan;

          (xi) with respect to each Loan Group, the amount of Scheduled
     Principal and Principal Prepayments, (including but separately identifying
     the principal amount of principal prepayments, Insurance Proceeds, the
     purchase price in connection with the purchase of Mortgage Loans, cash
     deposits in connection with substitutions of Mortgage Loans and Net
     Liquidation Proceeds) and the number and principal balance of Mortgage
     Loans purchased or substituted for during the relevant period and
     cumulatively since the Cut-off Date;

          (xii) the number of Mortgage Loans (excluding REO Property) in each
     Loan Group remaining in the Trust Fund as of the end of the related
     Prepayment Period;

          (xiii) information for each Loan Group and in the aggregate regarding
     any Mortgage Loan delinquencies as of the end of the related Prepayment
     Period, including the aggregate


                                      -55-

<PAGE>



     number, aggregate Outstanding Principal Balance and aggregate Scheduled
     Principal Balance of Mortgage Loans delinquent one month, two months and
     three months or more;

          (xiv) for each Loan Group, the number of Mortgage Loans in the
     foreclosure process as of the end of the related Due Period and the
     aggregate Outstanding Principal Balance of such Mortgage Loans;

          (xv) for each Loan Group, the number and aggregate Outstanding
     Principal Balance of all Mortgage Loans as to which the Mortgaged Property
     was REO Property as of the end of the related Due Period;

          (xvi) the book value (the sum of (A) the Outstanding Principal Balance
     of the Mortgage Loan, (B) accrued interest through the date of foreclosure
     and (C) foreclosure expenses) of any REO Property in each Loan Group;
     PROVIDED THAT, in the event that such information is not available to the
     Trustee on the Distribution Date, such information shall be furnished
     promptly after it becomes available;

          (xvii) the amount of Realized Losses allocated to each Class of
     Certificates since the prior Distribution Date and in the aggregate for all
     prior Distribution Dates;

          (xviii) the Average Loss Severity for the prior calendar month;

          (xix) the then applicable Senior Percentage, Senior Prepayment
     Percentage, Subordinate Percentage and Subordinate Prepayment Percentage;

          (xx) the Stop-Loss Amount as of the Cut-off Date, the Stop-Loss Amount
     as of the end of the related Prepayment Period and reduction in the
     Stop-Loss Amount during the related Prepayment Period; and

          (xxi) with respect to the related Prepayment Period, (i) the number of
     Mortgage Loans for which a payment was made by the PMI Insurer under the
     PMI Policy and the aggregate amount of any such payments, (ii) the number
     of Mortgage Loans for which a claim has been presented to the PMI Insurer
     under the PMI Policy and the aggregate amount of any such outstanding
     claims, and (iii) the number of Mortgage Loans for which a claim was
     presented to the PMI Insurer under the PMI Policy which claim was denied by
     the PMI Insurer and the aggregate amount of any such denied claims.

     The information set forth above shall be calculated or reported, as the
case may be, by the Trustee, based solely on information provided to the Trustee
by the Master Servicer. The Trustee may conclusively rely on such information
and shall not be required to confirm, verify or recalculate any such
information.

     The Trustee may make available each month, to any interested party, the
monthly statement to Certificateholders via the Trustee's website located at
"www.ctslink.com." Assistance in using the website can be obtained by calling
the Trustee's customer service desk at (301) 815-6600. Parties that are unable
to use the above distribution option are entitled to have a paper copy mailed


                                      -56-

<PAGE>



to them via first class mail by calling the customer service desk and indicating
such. The Trustee shall have the right to change the way such reports are
distributed in order to make such distribution more convenient and/or more
accessible to the parties, and the Trustee shall provide timely and adequate
notification to all parties regarding any such change.

     (b) By April 30 of each year beginning in 2001, the Trustee will furnish a
report to each Holder of the Certificates of record at any time during the prior
calendar year as to the aggregate of amounts reported pursuant to subclauses
(a)(ii) and (a)(v) above with respect to the Certificates, plus information with
respect to the amount of servicing compensation and such other customary
information as the Trustee may determine to be necessary and/or to be required
by the Internal Revenue Service or by a federal or state law or rules or
regulations to enable such Holders to prepare their tax returns for such
calendar year. Such obligations shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Trustee pursuant to the requirements of the Code.

     Section 6.05. MONTHLY ADVANCES. Pursuant to Section 11.17 of the Servicing
Agreements, the Master Servicer shall make Monthly Advances. On the Business Day
prior to each Distribution Date, if a Mortgage Loan is more than 90 days
delinquent, the Master Servicer will be obligated to make a Monthly Advance by
deposit into the Certificate Account, except to the extent the Master Servicer
determines any such advance to be nonrecoverable from Liquidation Proceeds,
Insurance Proceeds or from future payments on the Mortgage Loan for which the
advance was made. The Trustee shall be obligated to make such Monthly Advance on
the Distribution Date if the Master Servicer fails to do so. The Trustee shall
be reimbursed for any Monthly Advance in the same manner that the Master
Servicer would be reimbursed for a Monthly Advance.


                                      -57-

<PAGE>


                                   ARTICLE VII

                                 Indemnification

     Section 7.01. INDEMNIFICATION OF THE TRUSTEE. The Trust shall indemnify the
Indemnified Persons for, and will hold them harmless against, any loss,
liability or expense incurred on their part, arising out of, or in connection
with, this Agreement and the Certificates, including the costs and expenses
(including reasonable legal fees and expenses) of defending themselves against
any such claim other than (i) any loss, liability or expense related to such
Indemnified Person's failure to perform such Indemnified Person's duties in
strict compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and (ii) any
loss, liability or expense incurred by reason of such Indemnified Person's
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. This indemnity shall survive the resignation or removal of the
Trustee and the termination of this Agreement.






                                      -58-

<PAGE>


                                  ARTICLE VIII

                                     Default

     Section 8.01. EVENTS OF DEFAULT. In each and every case, so long as an
Event of Default with respect to the Master Servicer shall not have been
remedied, the Trustee may, and upon request of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
principal of the Trust Fund, the Trustee shall by notice in writing to the
Master Servicer, with a copy to the Rating Agencies, terminate all of the rights
and obligations (but not the liabilities) of the Master Servicer under the
Servicing Agreements and in and to the Mortgage Loans and/or the REO Property
serviced by the Master Servicer and the proceeds thereof.

     Section 8.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the
termination of the Master Servicer under the Servicing Agreements, the Trustee
shall automatically become the successor in all respects to the Master Servicer
in its capacity under the Servicing Agreements and the transactions set forth or
provided for therein and shall thereafter be subject to all the
responsibilities, duties, liabilities and limitations on liabilities relating
thereto placed on the Master Servicer by the terms and provisions thereof;
PROVIDED, HOWEVER, it is understood and acknowledged that by the parties hereto
that there will be a period of transition (not to exceed 90 days) before the
transfer of servicing obligations is fully effected and that the Trustee (i)
shall be under no obligation to purchase any Mortgage Loan; and (ii) shall have
no obligation whatsoever with respect to any liability (other than advances
deemed recoverable and not previously made) incurred by the Master Servicer at
or prior to the time of termination. As compensation therefor, the Trustee shall
be entitled to all funds relating to the Mortgage Loans which the Master
Servicer would have been entitled to retain if the Master Servicer had continued
to act hereunder, except for those amounts due the Master Servicer as
reimbursement for advances previously made or expenses previously incurred.
Notwithstanding the above, the Trustee may, if it shall be unwilling so to act,
or shall, if it is legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution which is a Fannie Mae or Freddie Mac-approved servicer having a net
worth of not less than $25,000,000 and which has the qualifications required
under the related Servicing Agreement, as the successor to the Master Servicer
under the Servicing Agreements in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under the
Servicing Agreements. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on the
Mortgage Loans as it and such successor shall agree; PROVIDED, HOWEVER, that no
such compensation shall be in excess of that permitted the Trustee under this
Subsection 8.02(a), and that such successor shall undertake and assume the
obligations of the Trustee to pay compensation to any third Person acting as an
agent or independent contractor in the performance of master servicing
responsibilities hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement and the Servicing Agreements, as shall be
necessary to effectuate any such succession.

     The termination of the rights and obligations of the Master Servicer shall
not affect any obligations incurred by the Master Servicer prior to such
termination. Notwithstanding anything in


                                      -59-

<PAGE>



this Agreement to the contrary, the Trustee shall be entitled to be reimbursed
by the Master Servicer (or by the Trust Fund if the Master Servicer is unable to
fulfill its obligations hereunder) for all costs incurred by the Trustee in
connection or associated with the transfer of servicing from the Master Servicer
to a successor Master Servicer (whether or not the Trustee is the successor
Master Servicer), including, without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction and/or manipulation of such servicing data as may be required to
correct any errors or insufficiencies in the servicing data provided by the
Master Servicer or as otherwise may be require to enable the successor Master
Servicer (including the Trustee) to service the Mortgage Loans properly and
effectively in accordance with the provisions of this Agreement.

     (b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.

     Section 8.03. NOTIFICATION TO CERTIFICATEHOLDERS. Upon any termination or
appointment of a successor to the Master Servicer, the Trustee shall give prompt
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register and to the Rating Agencies.

     Section 8.04. WAIVER OF DEFAULTS. The Trustee shall transmit by mail to all
Certificateholders, within 60 days after the occurrence of any Event of Default
known to the Trustee, unless such Event of Default shall have been cured, notice
of each such Event of Default hereunder known to the Trustee. The Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund may, on behalf of all Certificateholders, waive any
default by the Master Servicer in the performance of its obligations hereunder
and the consequences thereof, except a default in the making of or the causing
to be made any required distribution on the Certificates. Upon any such waiver
of a past default, such default shall be deemed to cease to exist, and any Event
of Default arising therefrom shall be deemed to have been timely remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived. The Trustee shall give notice of any such waiver to the
Rating Agencies.

     Section 8.05. LIST OF CERTIFICATEHOLDERS. Upon written request of three or
more Certificateholders of record, for purposes of communicating with other
Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.



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<PAGE>


                                   ARTICLE IX

                             Concerning the Trustee

     Section 9.01. DUTIES OF TRUSTEE. (a) The Trustee, prior to the occurrence
of an Event of Default and after the curing or waiver of all Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement as duties of the Trustee. If an
Event of Default has occurred and has not been cured or waived, the Trustee
shall exercise such of the rights and powers vested in it by this Agreement, and
subject to Section 8.02(b) use the same degree of care and skill in their
exercise, as a prudent person would exercise under the circumstances in the
conduct of his own affairs.

     (b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically required
to be furnished to the Trustee pursuant to any provision of this Agreement, the
Trustee shall examine them to determine whether they are in the form required by
this Agreement; PROVIDED, HOWEVER, that the Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by the Master Servicer;
PROVIDED, FURTHER, that the Trustee shall not be responsible for the accuracy or
verification of any calculation provided to it pursuant to this Agreement.

     (c) On each Distribution Date, the Trustee shall make monthly distributions
and the final distribution to the Certificateholders from funds in the
Certificate Account as provided in Sections 6.01 and 10.01 herein.

     (d) 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) Prior to the occurrence of an Event of Default, and after the
     curing or waiver of all such Events of Default which may have occurred, the
     duties and obligations of the Trustee shall be determined solely by the
     express provisions of this Agreement, the Trustee shall not be liable
     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
     to the Trustee and conforming to the requirements of this Agreement;

          (ii) The Trustee shall not be liable in its individual capacity 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;



                                      -61-

<PAGE>



          (iii) The Trustee shall not be liable with respect to any action
     taken, suffered or omitted to be taken by it in good faith in accordance
     with the directions of the Holders of Certificates evidencing Fractional
     Undivided Interests aggregating not less than 25% of the Trust Fund, if
     such action or non-action relates to the time, method and place of
     conducting any proceeding for any remedy available to the Trustee, or
     exercising any trust or other power conferred upon the Trustee, under this
     Agreement;

          (iv) The Trustee shall not be required to take notice or be deemed to
     have notice or knowledge of any default or Event of Default unless a
     Responsible Officer of the Trustee's Corporate Trust Office shall have
     actual knowledge thereof. In the absence of such notice, the Trustee may
     conclusively assume there is no such default or Event of Default;

          (v) The Trustee shall not in any way be liable by reason of any
     insufficiency in any Account held by or in the name of Trustee unless it is
     determined by a court of competent jurisdiction that the Trustee's gross
     negligence or willful misconduct was the primary cause of such
     insufficiency; and

          (vi) Anything in this Agreement to the contrary notwithstanding, in no
     event shall the Trustee be liable for special, indirect or consequential
     loss or damage of any kind whatsoever (including but not limited to lost
     profits), even if the Trustee has been advised of the likelihood of such
     loss or damage and regardless of the form of action.

     The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Master Servicer under the Servicing Agreements, except
during such time, if any, as the Trustee shall be the successor to, and be
vested with the rights, duties, powers and privileges of, the Master Servicer in
accordance with the terms of this Agreement.

     (e) All funds received by the Trustee and required to be deposited in the
Certificate Account pursuant to this Agreement will be promptly so deposited by
the Trustee.

     (f) Except for those actions that the Trustee is required to take
hereunder, the Trustee shall have no obligation or liability to take any action
or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.

     Section 9.02. CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as otherwise
provided in Section 9.01:

          (i) The Trustee may rely and shall be protected in acting or
     refraining from acting in reliance on any resolution, certificate of a
     Seller or Master Servicer, certificate of auditors or any other
     certificate, statement, instrument, opinion, report, notice, request,
     consent, order,


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<PAGE>



     appraisal, bond or other paper or document believed by it to be genuine and
     to have been signed or presented by the proper party or parties;

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

          (iii) The Trustee shall be under no obligation to exercise any of the
     trusts or powers vested in it by this Agreement, other than its obligation
     to give notices pursuant to 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 Certificateholders pursuant to the provisions of
     this Agreement, unless such Certificateholders shall have offered to the
     Trustee reasonable security or indemnity against the costs, expenses and
     liabilities which may be incurred therein or thereby. Nothing contained
     herein shall, however, relieve the Trustee of the obligation, upon the
     occurrence of an Event of Default of which a Responsible Officer of the
     Trustee's Corporate Trust Office has actual knowledge (which has not been
     cured or waived), subject to Section 8.02(b), to exercise such of the
     rights and powers vested in it by this Agreement, and to use the same
     degree of care and skill in their exercise, as a prudent person would
     exercise under the circumstances in the conduct of his own affairs;

          (iv) Prior to the occurrence of an Event of Default hereunder and
     after the curing or waiver of all Events of Default which may have
     occurred, the Trustee shall not be liable in its individual capacity 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;

          (v) The Trustee shall not be bound to make any investigation into the
     facts or matters stated in any resolution, certificate, statement,
     instrument, opinion, report, notice, request, consent, order, approval,
     bond or other paper or document, unless requested in writing to do so by
     Holders of Certificates evidencing Fractional Undivided Interests
     aggregating not less than 25% of the Trust Fund and provided that the
     payment within a reasonable time to the Trustee of the costs, expenses or
     liabilities likely to be incurred by it in the making of such investigation
     is, in the opinion of the Trustee, reasonably assured to the Trustee by the
     security afforded to it by the terms of this Agreement. The Trustee may
     require reasonable indemnity against such expense or liability as a
     condition to taking any such action. The reasonable expense of every such
     examination shall be paid by the Certificateholders requesting the
     investigation;

          (vi) The Trustee may execute any of the trusts or powers hereunder or
     perform any duties hereunder either directly or through Affiliates, agents
     or attorneys; PROVIDED, HOWEVER, that the Trustee may not appoint any agent
     to perform its custodial functions with respect to the Mortgage Files or
     paying agent functions under this Agreement without the express written
     consent of the Master Servicer, which consent will not be unreasonably
     withheld. The Trustee shall not be liable or responsible for the misconduct
     or negligence of any of the


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<PAGE>



     Trustee's agents or attorneys or a custodian or paying agent appointed
     hereunder by the Trustee with due care and, when required, with the consent
     of the Master Servicer;

          (vii) Should the Trustee deem the nature of any action required on its
     part, other than a payment or transfer under Subsection 4.01(b) or Section
     4.02, to be unclear, the Trustee may require prior to such action that it
     be provided by the Seller with reasonable further instructions;

          (viii) The right of the Trustee to perform any discretionary act
     enumerated in this Agreement shall not be construed as a duty, and the
     Trustee shall not be accountable for other than its negligence or willful
     misconduct in the performance of any such act;

          (ix) The Trustee shall not be required to give any bond or surety with
     respect to the execution of the trust created hereby or the powers granted
     hereunder; and

          (x) The Trustee shall have no duty to conduct any affirmative
     investigation as to the occurrence of any condition requiring the
     repurchase of any Mortgage Loan by EMC pursuant to this Agreement or the
     Mortgage Loan Purchase Agreement or the eligibility of any Mortgage Loan
     for purposes of this Agreement.

     Section 9.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS. The
recitals contained herein and in the Certificates (other than the signature and
countersignature of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee shall have no responsibility for their
correctness. The Trustee makes no representation as to the validity or
sufficiency of the Certificates (other than the signature and countersignature
of the Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee of the obligation to review the Mortgage Files
pursuant to Sections 2.02 and 2.04. The Trustee's signature and countersignature
(or countersignature of its agent) on the Certificates shall be solely in its
capacity as Trustee and shall not constitute the Certificates an obligation of
the Trustee in any other capacity. The Trustee shall not be accountable for the
use or application by the Seller of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to the
Seller with respect to the Mortgage Loans. Subject to the provisions of Section
2.05, the Trustee shall not be responsible for the legality or validity of this
Agreement or any document or instrument relating to this Agreement, the validity
of the execution of this Agreement or of any supplement hereto or instrument of
further assurance, or the validity, priority, perfection or sufficiency of the
security for the Certificates issued hereunder or intended to be issued
hereunder. The Trustee shall at no time have any responsibility or liability for
or with respect to the legality, validity and enforceability of any Mortgage or
any Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Fund or its ability to generate the payments to be
distributed to Certificateholders, under this Agreement. The Trustee shall have
no responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection of
any security interest or lien granted to it hereunder or to record this
Agreement other than any continuation statements filed by the Trustee pursuant
to Section 3.04.



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<PAGE>



     Section 9.04. TRUSTEE MAY OWN CERTIFICATES. The Trustee in its individual
capacity or in any capacity other than as Trustee hereunder may become the owner
or pledgee of any Certificates with the same rights it would have if it were not
Trustee, and may otherwise deal with the parties hereto.

     Section 9.05. TRUSTEE'S FEES AND EXPENSES. The fees of the Trustee shall be
paid in accordance with the provisions of this Agreement. In addition, the
Trustee will be entitled to recover from the Certificate Account pursuant to
Section 4.02(c) all reasonable out-of-pocket expenses, disbursements and
advances and the expenses of the Trustee in connection with any Event of
Default, any breach of this Agreement or any claim or legal action (including
any pending or threatened claim or legal action) incurred or made by the Trustee
in the administration of the trusts hereunder (including the reasonable
compensation, expenses and disbursements of its counsel) except any such
expense, disbursement or advance as may arise from its negligence or intentional
misconduct or which is the responsibility of the Certificateholders or the Trust
Fund hereunder. If funds in the Certificate Account are insufficient therefor,
the Trustee shall recover such expenses from the Seller. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.

     Section 9.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee and any
successor Trustee shall during the entire duration of this Agreement be a state
bank or trust company or a national banking association organized and doing
business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus and undivided profits of at least $40,000,000 or, in the
case of a successor Trustee, $50,000,000, subject to supervision or examination
by federal or state authority and, in the case of a successor Trustee other than
pursuant to Section 9.10, rated in one of the two highest long-term debt
categories of, or otherwise acceptable to, each of the Rating Agencies. The
Trustee shall not be an Affiliate of the Master Servicer, unless the Trustee
acts as successor Master Servicer hereunder. If the Trustee 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 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 9.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 9.08.

     Section 9.07. INSURANCE. The Trustee, at its own expense, shall at all
times maintain and keep in full force and effect: (i) fidelity insurance, (ii)
theft of documents insurance and (iii) forgery insurance (which may be
collectively satisfied by a "Financial Institution Bond" and/or a "Bankers'
Blanket Bond"). All such insurance shall be in amounts, with standard coverage
and subject to deductibles, as are customary for insurance typically maintained
by banks or their affiliates which act as custodians for investor-owned mortgage
pools. A certificate of an officer of the Trustee as to the Trustee's compliance
with this Section 9.07 shall be furnished to any Certificateholder upon
reasonable written request.

     Section 9.08. RESIGNATION AND REMOVAL OF THE TRUSTEE. (a) The Trustee may
at any time resign and be discharged from the Trust hereby created by giving
written notice thereof to the Seller and the Master Servicer, with a copy to the
Rating Agencies. Upon receiving such notice of


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<PAGE>



resignation, the Seller shall promptly appoint a successor Trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
each of the resigning Trustee and 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 9.06 and shall fail to resign after written
request therefor by the Seller or if at any time the Trustee shall become
incapable of acting, or shall be adjudged a 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
shall be entitled to remove the Trustee and appoint a successor Trustee by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the Trustee so removed and the successor Trustee.

     (c) The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may at any time remove the
Trustee and appoint a successor Trustee by written instrument or instruments, in
quadruplicate, signed by such Holders or their attorneys-in-fact duly
authorized, one complete set of which instruments shall be delivered to the
Seller, the Master Servicer, the Trustee so removed and the successor so
appointed.

     (d) No resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 9.08 shall become
effective except upon appointment of and acceptance of such appointment by the
successor Trustee as provided in Section 9.09.

     Section 9.09. SUCCESSOR TRUSTEE. (a) Any successor Trustee appointed as
provided in Section 9.08 shall execute, acknowledge and deliver to the Seller
and to its predecessor Trustee an instrument accepting such appointment
hereunder. The resignation or removal of the predecessor Trustee shall then
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 like effect as if originally
named as Trustee herein. The predecessor Trustee shall after payment of its
outstanding fees and expenses promptly deliver to the successor Trustee all
assets and records of the Trust held by it hereunder, and the Seller and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably 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 9.09 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 9.06.

     (c) Upon acceptance of appointment by a successor Trustee as provided in
this Section 9.09, the successor Trustee shall mail notice of the succession of
such Trustee hereunder to all Certificateholders at their addresses as shown in
the Certificate Register and to the Rating Agencies. EMC shall pay the cost of
any mailing by the successor Trustee.



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<PAGE>



     Section 9.10. MERGER OR CONSOLIDATION OF TRUSTEE. Any state bank or trust
company or national banking association into which the Trustee may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any state bank or trust
company or national banking association succeeding to all or substantially all
of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such state bank or trust company or national banking
association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid 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 9.11. 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 or property constituting the same may at the time be located, the Seller
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
and the Seller 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, and to
vest in such Person or Persons, in such capacity, such title to the Trust, or
any part thereof, and, subject to the other provisions of this Section 9.11,
such powers, duties, obligations, rights and trusts as the Seller and the
Trustee may consider necessary or desirable.

     (b) If the Seller shall not have joined in such appointment within 15 days
after the receipt by it of a written request so to do, the Trustee shall have
the power to make such appointment without the Seller.

     (c) No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor Trustee under Section 9.06 hereunder and
no notice to Certificateholders of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 9.08 hereof.

     (d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust 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.

     (e) 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 IX. 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


                                      -67-

<PAGE>



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.

     (f) To the extent not prohibited by law, any separate trustee or co-trustee
may, at any time, request the Trustee, its agent or attorney-in-fact, with full
power and authority, to do any lawful act under or with respect to 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.

     (g) No trustee under this Agreement shall be personally liable by reason of
any act or omission of another trustee under this Agreement. The Seller and the
Trustee acting jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee.

     Section 9.12. FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS; REMIC ADMINISTRATION. (a) For federal income tax purposes,
the taxable year of each of REMIC I and REMIC II shall be a calendar year and
the Trustee shall maintain or cause the maintenance of the books of each such
REMIC on the accrual method of accounting.

     (b) The Trustee shall prepare, sign and file or cause to be filed with the
Internal Revenue Service Federal tax information returns or elections required
to be made hereunder with respect to each of REMIC I and REMIC II, the Trust
Fund, if applicable, and the Certificates containing such information and at the
times and in the manner as may be required by the Code or applicable Treasury
regulations, and shall furnish to each Holder of Certificates at any time during
the calendar year for which such returns or reports are made such statements or
information at the times and in the manner as may be required thereby,
including, without limitation, reports relating to interest, original issue
discount and market discount or premium (using a constant prepayment assumption
of 15% CPR). In connection with the foregoing, the Trustee shall timely prepare
and file IRS Form 8811, which shall provide the name and address of the person
who can be contacted to obtain information required to be reported to the
holders of regular interests in each of REMIC I and REMIC II (the "REMIC
Reporting Agent"). The Trustee shall make elections to treat each of REMIC I and
REMIC II as a REMIC (which elections shall apply to the taxable period ending
December 31, 2000 and each calendar year thereafter) in such manner as the Code
or applicable Treasury regulations may prescribe. The Trustee shall sign all tax
information returns filed pursuant to this Section and any other returns as may
be required by the Code. The Holder of the Class R-I Certificate is hereby
designated as the "Tax Matters Person" (within the meaning of Treas. Reg.
ss.ss.1.860F-4(d)) for REMIC I, and the Holder of the Class R-II Certificate is
hereby designated as the "Tax Matters Person" for REMIC II. The Trustee is
hereby designated and appointed as the agent of each such Tax Matters Person.
Any Holder of a Residual Certificate will by acceptance thereof appoint the
Trustee as agent and attorney-in-fact for the purpose of acting as Tax Matters
Person for each of REMIC I and REMIC II during such time as the Trustee does not
own any such Residual Certificate. In the event that the Code or applicable
Treasury regulations prohibit the Trustee from signing tax or information
returns or other statements, or the Trustee from acting as agent for the Tax
Matters Person, the Trustee shall take whatever action that in its sole good
faith judgment is necessary for the proper filing of such information returns or
for the provision of a tax matters


                                      -68-

<PAGE>



person, including designation of the Holder of a Residual Certificate to sign
such returns or act as tax matters person. Each Holder of a Residual Certificate
shall be bound by this Section.

     (c) The Trustee shall provide upon request and receipt of reasonable
compensation, such information as required in Section 860D(a)(6)(B) of the Code
to the Internal Revenue Service, to any Person purporting to transfer a Residual
Certificate to a Person other than a transferee permitted by Section 5.05(b),
and to any regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate, organization described in Section 1381
of the Code, or nominee holding an interest in a pass-through entity described
in Section 860E(e)(6) of the Code, any record holder of which is not a
transferee permitted by Section 5.05(b) (or which is deemed by statute to be an
entity with a disqualified member).

     (d) The Trustee shall prepare and file or cause to be filed any state
income tax returns required under Applicable State Law with respect to each of
REMIC I and REMIC II or the Trust Fund.

     (e) Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans,
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall, together with its monthly report to
such Certificateholders indicate such amount withheld.

     (f) The Trustee agrees to indemnify the Trust Fund and the Seller for any
taxes and costs including, without limitation, any reasonable attorneys fees
imposed on or incurred by the Trust Fund, the Company or the Master Servicer, as
a result of a breach of the Trustee's covenants set forth in this Section 9.12.

     Section 9.13. MAINTENANCE OF PMI POLICY; COLLECTIONS THEREUNDER. (a) The
Trustee shall cooperate with the PMI Insurer and shall use its best efforts to
furnish to the PMI Insurer all reasonable information in the possession of the
Trustee or to which the Trustee has access with respect to each Mortgage Loan.

     (b) In the event of a default by the PMI Insurer under the PMI Policy (a
"Replacement Event"), the Trustee shall use its best efforts to obtain a
substitute lender-paid primary mortgage insurance policy (a "Substitute PMI
Policy"); PROVIDED, HOWEVER, that the Trustee shall not be obligated, and shall
have no liability for failing, to obtain a Substitute PMI Policy unless such
Substitute PMI Policy can be obtained on the following terms and conditions: (i)
the Certificates shall be rated no lower than the rating assigned by each Rating
Agency to the Certificates immediately prior to such Replacement Event, as
evidenced by a letter from each Rating Agency addressed to the Seller, the
Master Servicer and the Trustee, (ii) the timing and mechanism for drawing on
such new Substitute PMI Policy shall be reasonably acceptable to the Master
Servicer and the Trustee and (iii) the premiums under the proposed Substitute
PMI Policy shall not exceed such premiums under the existing PMI Policy.



                                      -69-

<PAGE>


     (c) Pursuant to Section 4.01 hereof, any amounts collected by the Trustee
under the PMI Policy shall be deposited in the Certificate Account, subject to
withdrawal pursuant to Section 4.02 hereof.

     (d) The Trustee shall provide upon request by the Depositor or the Rating
Agencies copies of any reports provided to the Trustee by the Master Servicer or
the PMI Insurer with respect to the Mortgage Loans covered by the PMI Policy.
The Trustee shall also provide such reports to any Certificateholder provided
that the reasonable expenses incurred by the Trustee in providing such reports
(including postage and copying costs) are paid by such Certificateholder.







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<PAGE>

                                    ARTICLE X

                                   Termination

     Section 10.01. TERMINATION UPON REPURCHASE BY THE SELLER OR ITS DESIGNEE OR
LIQUIDATION OF THE MORTGAGE LOANS. (a) Subject to Section 10.02, the respective
obligations and responsibilities of the Seller and the Trustee created hereby,
other than the obligation of the Trustee to make payments to Certificateholders
as hereinafter set forth shall terminate upon:

          (i) the repurchase by or at the direction of the Seller or its
     designee of all Mortgage Loans and all related REO Property remaining in
     the Trust at a price equal to (a) 100% of the Outstanding Principal Balance
     of each Mortgage Loan (other than a Mortgage Loan related to REO Property)
     as of the date of repurchase, net of the principal portion of any
     unreimbursed Monthly Advances made by the purchaser, together with interest
     at the applicable Mortgage Interest Rate accrued but unpaid through and
     including the last day of the month of repurchase, plus (b) the appraised
     value of any related REO Property, less the good faith estimate of the
     Seller of liquidation expenses to be incurred in connection with its
     disposal thereof (but not more than the Outstanding Principal Balance of
     the related Mortgage Loan, together with interest at the applicable
     Mortgage Interest Rate accrued on that balance but unpaid through and
     including the last day of the month of repurchase), such appraisal to be
     calculated by an appraiser mutually agreed upon by the Seller and the
     Trustee at the expense of the Seller; or

          (ii) the later of the making of the final payment or other
     liquidation, or any advance with respect thereto, of the last Mortgage Loan
     remaining in the Trust Fund or the disposition of all property acquired
     with respect to any Mortgage Loan; PROVIDED, HOWEVER, that in the event
     that an advance has been made, but not yet recovered, at the time of such
     termination, the Person having made such advance shall be entitled to
     receive, notwithstanding such termination, any payments received subsequent
     thereto with respect to which such advance was made.

     (b) In no event, however, shall the Trust created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date of this Agreement.

     (c) The right of the Seller or its designee to repurchase all the Mortgage
Loans pursuant to Subsection 10.01(a)(i) above shall be exercisable only if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than 10% of the portion of the Cut-off Date Balance
or (ii) the Seller, based upon an Opinion of Counsel, has determined that the
REMIC status of the REMIC has been lost or that a substantial risk exists that
such REMIC status will be lost for the then-current taxable year. At any time
thereafter, in the case of (i) or (ii) above, the Seller may elect to terminate
the REMIC at any time, and upon such election, the Seller or its designee, shall
repurchase all the Mortgage Loans.





                                      -71-
<PAGE>

     (d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Rating Agencies, upon which the
Certificateholders shall surrender their Certificates to the Trustee for payment
of the final distribution and cancellation. Such notice shall be given by
letter, mailed not earlier than the l5th day and not later than the 25th day of
the month next preceding the month of such final distribution, and shall specify
(i) the Distribution Date upon which final payment of the Certificates will be
made upon presentation and surrender of the Certificates at the office of the
Trustee therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Trustee therein specified.

     (e) If the option of the Seller to repurchase or cause the repurchase of
all the Mortgage Loans under Subsection 10.01 (a)(i) above is exercised, the
Seller and/or its designee shall deliver to the Trustee for deposit in the
Certificate Account, by the Business Day prior to the applicable Distribution
Date, an amount equal to the repurchase price for the Mortgage Loans being
purchased by it and all property acquired with respect to such Mortgage Loans
remaining in the REMIC.

     Upon the presentation and surrender of the Certificates, the Trustee shall
distribute an amount equal to (i) the amount otherwise distributable to the
Certificateholders (other than the holder of the Residual Certificates) on such
Distribution Date but for such repurchase, (ii) the Current Principal Amount and
any accrued but unpaid interest at the Pass-Through Rate to the
Certificateholders of each Class, and (iii) the remainder to the Class R
Certificateholder. If the Available Funds are not sufficient to pay all of the
related Certificates in full, any such deficiency will be allocated to the
outstanding Class or Classes of Subordinate Certificates having the highest
numerical designation or, if after the Cross-Over Date, to the Senior
Certificates pro rata. Upon deposit of the required repurchase price and
following such final Distribution Date, the Trustee shall release promptly to
the Seller and/or its designee, as the case may be, the Mortgage Files for the
remaining Mortgage Loans, and the Accounts with respect thereto shall terminate,
subject to the Trustee's obligation to hold any amounts payable to
Certificateholders in trust without interest pending final distributions
pursuant to Subsection 10.01(f).

     (f) In the event that this Agreement is terminated by reason of the payment
or liquidation of all Mortgage Loans or the disposition of all property acquired
with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above, the
Master Servicer shall deliver to the Trustee for deposit in the Certificate
Account all distributable amounts remaining in their Protected Accounts. Upon
the presentation and surrender of the Certificates, the Trustee shall distribute
to the remaining Certificateholders, in accordance with their respective
interests, all distributable amounts remaining in the Certificate Account. Upon
deposit by the Master Servicer of such distributable amounts, and following such
final Distribution Date, the Trustee shall release promptly to the Seller or its
designee the Mortgage Files for the remaining Mortgage Loans, and the
Certificate Account shall terminate, subject to the Trustee's obligation to hold
any amounts payable to the Certificateholders in trust without interest pending
final distributions pursuant to this Subsection 10.01(f).

     (g) If not all of the Certificateholders shall surrender their Certificates
for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the



                                      -72-
<PAGE>



second notice, not all the Certificates shall have been surrendered for
cancellation, the Trustee may take appropriate steps, or appoint any agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain subject to this Agreement.

     Section 10.02. ADDITIONAL TERMINATION REQUIREMENTS. (a) If the option of
the Seller to repurchase all the Mortgage Loans under Subsection 10.01(a)(i)
above is exercised, the Trust Fund and each of REMIC I and REMIC II shall be
terminated in accordance with the following additional requirements, unless the
Trustee has been furnished with an Opinion of Counsel to the effect that the
failure of the Trust to comply with the requirements of this Section 10.02 will
not (i) result in the imposition of taxes on "prohibited transactions" as
defined in Section 860F of the Code on each of REMIC I and REMIC II or (ii)
cause any REMIC to fail to qualify as a REMIC at any time that any Regular
Certificates are outstanding:

          (i) within 90 days prior to the final Distribution Date, at the
     written direction of the Seller, the Trustee, as agent for the respective
     Tax Matters Persons, shall adopt a plan of complete liquidation of the
     Trust Fund and each of REMIC I and REMIC II provided to it by the Seller
     meeting the requirements of a "Qualified Liquidation" under Section 860F of
     the Code and any regulations thereunder.

          (ii) at or after the time of adoption of such a plan of complete
     liquidation of the Trust and at or prior to the final Distribution Date,
     the Trustee shall sell for cash all of the assets of the Trust or to or at
     the direction of the Seller; and

          (iii) at the time of the making of the final payment on any
     Certificates, the Trustee shall distribute or credit from the Certificate
     Account (or cause to be distributed or credited) (i) to the
     Certificateholders, other than the Holder of the corresponding Residual
     Certificates, the Current Principal Amount of the Certificates plus 30
     days' interest thereon at the applicable Pass-Through Rate, and (ii) to the
     corresponding Residual Certificateholder, all cash on hand from the
     Certificate Account (other than cash retained to meet claims); and the
     Trust Fund and each of REMIC I and REMIC II shall terminate at such time.

     (b) By their acceptance of the Residual Certificates, the Holders thereof
hereby (i) agree to adopt such a plan of complete liquidation of the REMIC upon
the written request of the Seller and to take such action in connection
therewith as may be reasonably requested by the Seller and (ii) appoint the
Seller as their attorney-in-fact, with full power of substitution, for purposes
of adopting such a plan of complete liquidation. The Trustee shall adopt such
plan of liquidation by filing the appropriate statement on the final tax return
of each REMIC. Upon complete liquidation or final distribution of all of the
assets of the Trust Fund, the Trust Fund and each of REMIC I and REMIC II shall
terminate.



                                      -73-
<PAGE>


                                   ARTICLE XI

                            Miscellaneous Provisions

     Section 11.01. INTENT OF PARTIES. The parties intend that each of REMIC I
and REMIC II shall be treated as a REMIC for federal income tax purposes and
that the provisions of this Agreement should be construed in furtherance of this
intent.

     Section 11.02. AMENDMENT. (a) This Agreement may be amended from time to
time by the Seller and the Trustee, and the Servicing Agreements may be amended
from time to time by the Master Servicer and the Trustee, without notice to or
the consent of any of the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions herein that may be defective or inconsistent with
any other provisions herein, to comply with any changes in the Code or to make
any other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion of
Independent Counsel, adversely affect in any material respect the interests of
any Certificateholder.

     (b) This Agreement may also be amended from time to time by the Seller and
the Trustee, and the Servicing Agreements may also be amended from time to time
by the Master Servicer and the Trustee, with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund or of the applicable Class or Classes, if such amendment
affects only such Class or Classes, 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 Certificateholders; PROVIDED,
HOWEVER, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) reduce the aforesaid percentage of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all Certificates then outstanding, or (iii) cause either REMIC I or
REMIC II to fail to qualify as a REMIC for federal income tax purposes, as
evidenced by an Opinion of Independent Counsel which shall be provided to the
Trustee other than at the Trustee's expense. Notwithstanding any other provision
of this Agreement, for purposes of the giving or withholding of consents
pursuant to Section 11.02(b), Certificates registered in the name of or held for
the benefit of the Seller, the Master Servicer, or the Trustee or any Affiliate
thereof shall be entitled to vote their Fractional Undivided Interests with
respect to matters affecting such Certificates.

     (c) Promptly after the execution of any such amendment, the Trustee shall
furnish a copy of such amendment or written notification of the substance of
such amendment to each Certificateholder, with a copy to the Rating Agencies.

     (d) In the case of an amendment under Subsection 11.02(b) above, it shall
not be necessary for the Certificateholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner



                                      -74-
<PAGE>



of obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.

     (e) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement.
The Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's own rights, duties or immunities under this
Agreement.

     Section 11.03. RECORDATION OF AGREEMENT. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Seller shall
effect such recordation, at the expense of the Trust upon the request in writing
of a Certificateholder, but only if such direction is accompanied by an Opinion
of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.

     Section 11.04. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (a) The death or
incapacity of any Certificateholder shall not terminate this Agreement or the
Trust, nor entitle such Certificateholder'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, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.

     (b) Except as expressly provided in this Agreement, no Certificateholders
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to establish the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholders be under
any liability to any third Person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.

     (c) No Certificateholder 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, under or with respect to this Agreement against the Seller, the Master
Servicer or any successor to any such parties unless (i) such Certificateholder
previously shall have given to the Trustee a written notice of a continuing
default, as herein provided, (ii) the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the Trust Fund
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 and
expenses and liabilities to be incurred therein or thereby, and (iii) the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding.

     (d) No one or more Certificateholders shall have any right by virtue of any
provision of this Agreement to affect the rights of any other Certificateholders
or to obtain or seek to obtain priority or preference over any other such
Certificateholder, or to enforce any right under this



                                      -75-
<PAGE>



Agreement, except in the manner herein provided and for the equal, ratable and
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

     Section 11.05. ACTS OF CERTIFICATEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Seller. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Seller,
if made in the manner provided in this Section 11.05.

     (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.

     (c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Seller, the Master Servicer nor any successor to any such parties
shall be affected by any notice to the contrary.

     (d) Any request, demand, authorization, direction, notice, consent, waiver
or other action of the holder of any Certificate shall bind every future holder
of the same Certificate and the holder of every Certificate issued upon the
registration of transfer or exchange thereof, if applicable, or in lieu thereof
with respect to anything done, omitted or suffered to be done by the Trustee,
the Seller, the Master Servicer or any successor to any such party in reliance
thereon, whether or not notation of such action is made upon such Certificates.

     (e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Seller, the Master Servicer or any
Affiliate thereof shall be disregarded, except as otherwise provided in Section
11.02(b) and except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Certificates which the Trustee knows to be so owned
shall be so disregarded. Certificates which have been pledged in good faith to
the Trustee, the Seller, the Master Servicer or any Affiliate thereof may be
regarded as outstanding if the pledgor establishes to the satisfaction of the
Trustee the pledgor's right to act with



                                      -76-
<PAGE>



respect to such Certificates and that the pledgor is not an Affiliate of the
Trustee, the Seller, or the Master Servicer, as the case may be.

     Section 11.06. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     Section 11.07. NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the Seller,
245 Park Avenue, New York, New York 10167, Attention: Vice President-Servicing,
telecopier number: (212) 272-5591, or to such other address as may hereafter be
furnished to the other parties hereto in writing; (ii) in the case of the
Trustee, at its Corporate Trust Office with a copy to 11000 Broken Land Parkway,
Columbia, Maryland 21044 (Attention: SAMI 00-1), or such other address as may
hereafter be furnished to the other parties hereto in writing; or (iii) in the
case of the Rating Agencies, Fitch, Inc., One State Street Plaza, 32nd Floor,
New York, New York 10004, Moody's Investors Service, Inc., 99 Church Street, 4th
Floor, New York, New York 10004, and Standard & Poor's, a division of the
McGraw-Hill Companies, Inc., 55 Water Street, 41st Floor, New York, New York,
10041, Attention: Residential Mortgage Surveillance. Any notice delivered to the
Seller, the Master Servicer or the Trustee under this Agreement shall be
effective only upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice.

         Section 11.08. 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 severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.

     Section 11.09. 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.

     Section 11.10. 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 11.11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts each of which when so executed and delivered shall be an original
but all of which together shall constitute one and the same instrument.




                                      -77-
<PAGE>



     Section 11.12. NOTICE TO RATING AGENCIES. The article and section headings
herein are for convenience of reference only, and shall not limited or otherwise
affect the meaning hereof. The Trustee shall promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:

     1.    Any material change or amendment to this Agreement or the Servicing
           Agreements;

     2.    The occurrence of any Event of Default that has not been cured;

     3.    The resignation or termination of the Master Servicer or the Trustee;

     4.    The repurchase or substitution of Mortgage Loans;

     5.    The final payment to Certificateholders; and

     6.    Any change in the location of the Certificate Account.





                                      -78-
<PAGE>



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


                                         STRUCTURED ASSET MORTGAGE
                                         INVESTMENTS INC., as Seller


                                         By:__________________________________
                                            Name:
                                            Title:


                                         WELLS FARGO BANK MINNESOTA,
                                         NATIONAL ASSOCIATION, as Trustee


                                         By:__________________________________
                                            Name:
                                            Title:



Accepted and Agreed as to
  Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c)

EMC MORTGAGE CORPORATION

By:__________________________________
   Name:
   Title:



<PAGE>



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

     On the 28th day of December, 2000 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
____________________ of Structured Asset Mortgage Investments Inc., the
corporation that executed the within instrument, and also known 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.


                                             __________________________________
                                                       Notary Public
[Notarial Seal]



<PAGE>



STATE OF MARYLAND       )
                        ) ss.:
COUNTY OF               )

     On the 28th day of December, 2000 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
_______________________ of Wells Fargo Bank Minnesota, National Association, the
corporation that executed the within instrument, and also known 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.



                                             __________________________________
                                                       Notary Public

[Notarial Seal]



<PAGE>


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

         On the 28th day of December, 2000 before me, a notary public in and for
said State, personally appeared ______________________, known to me to be a
____________________ of EMC Mortgage Corporation, the corporation that executed
the within instrument, and also known 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.



                                             __________________________________
                                                       Notary Public

[Notarial Seal]