STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
                                     SELLER

                         BANK ONE, NATIONAL ASSOCIATION,
                                     TRUSTEE

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                                 MASTER SERVICER

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                            SECURITIES ADMINISTRATOR

                                       and

                            EMC MORTGAGE CORPORATION

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


                         POOLING AND SERVICING AGREEMENT

                           Dated as of October 1, 2001

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


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

                                  Series 2001-8




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<TABLE>
<CAPTION>

                                                    TABLE OF CONTENTS

                                                                                                                    Page

<S>                                                                                                                   <C>
ARTICLE I

          Definitions..................................................................................................2

ARTICLE II

          Conveyance of Mortgage Loans;
          Original Issuance of Certificates...........................................................................34
                   Section 2.01      Conveyance of Mortgage Loans to Trustee..........................................34
                   Section 2.02      Acceptance of Mortgage Loans by Trustee..........................................36
                   Section 2.03      Assignment of Interest in the Mortgage Loan Purchase Agreement
                    ..................................................................................................38
                   Section 2.04      Substitution of Mortgage Loans...................................................39
                   Section 2.05      Issuance of Certificates.........................................................40
                   Section 2.06      Representations and Warranties Concerning the Seller.............................40

ARTICLE III

          Administration and Servicing of Mortgage Loans..............................................................42
                   Section 3.01      Master Servicer..................................................................42
                   Section 3.02      REMIC-Related Covenants..........................................................43
                   Section 3.03      Monitoring of Servicers..........................................................43
                   Section 3.04      Fidelity Bond....................................................................44
                   Section 3.05      Power to Act; Procedures.........................................................44
                   Section 3.06      Due-on-Sale Clauses; Assumption Agreements.......................................45
                   Section 3.07      Release of Mortgage Files........................................................45
                   Section 3.08      Documents, Records and Funds in Possession of Master Servicer To Be
                   Held for Trustee...................................................................................46
                   Section 3.09      Standard Hazard Insurance and Flood Insurance Policies...........................47
                   Section 3.10      Presentment of Claims and Collection of Proceeds.................................47
                   Section 3.11      Maintenance of the Primary Mortgage Insurance Policies...........................47
                   Section 3.12      Trustee to Retain Possession of Certain Insurance Policies and Documents
                    ..................................................................................................48
                   Section 3.13      Realization Upon Defaulted Mortgage Loans........................................48
                   Section 3.14      Compensation for the Master Servicer.............................................49
                   Section 3.15      REO Property.....................................................................49
                   Section 3.16      Annual Officer's Certificate as to Compliance....................................50
                   Section 3.17      Annual Independent Accountant's Servicing Report.................................50
                   Section 3.18      Reports Filed with Securities and Exchange Commission............................51
                   Section 3.19      EMC..............................................................................51
                   Section 3.20      UCC..............................................................................52


                                                          -i-

<PAGE>



                   Section 3.21      Optional Purchase of Defaulted Mortgage Loans....................................52

ARTICLE IV

          Accounts....................................................................................................53
                   Section 4.01      Protected Accounts...............................................................53
                   Section 4.02      Master Servicer Collection Account...............................................54
                   Section 4.03      Permitted Withdrawals and Transfers from the Master Servicer Collection
                   Account............................................................................................55
                   Section 4.04      Distribution Account.............................................................56
                   Section 4.05      Permitted Withdrawals and Transfers from the Distribution Account
                                                                                                                      56

ARTICLE V

          Certificates................................................................................................59
                   Section 5.01      Certificates.....................................................................59
                   Section 5.02      Registration of Transfer and Exchange of Certificates............................65
                   Section 5.03      Mutilated, Destroyed, Lost or Stolen Certificates................................68
                   Section 5.04      Persons Deemed Owners............................................................68
                   Section 5.05      Transfer Restrictions on Residual Certificates...................................68
                   Section 5.06      Restrictions on Transferability of Certificates..................................70
                   Section 5.07      ERISA Restrictions...............................................................70
                   Section 5.08      Rule 144A Information............................................................71

ARTICLE VI

          Payments to Certificateholders..............................................................................72
                   Section 6.01      Distributions on the Certificates................................................72
                   Section 6.02      Allocation of Losses.............................................................75
                   Section 6.03      Payments.........................................................................77
                   Section 6.04      Statements to Certificateholders.................................................77
                   Section 6.05      Monthly Advances.................................................................80
                   Section 6.06      Surety Bond......................................................................80
                   Section 6.07      Compensating Interest Payments...................................................81

ARTICLE VII

          The Master Servicer.........................................................................................82
                   Section 7.01      Liabilities of the Master Servicer...............................................82
                   Section 7.02      Merger or Consolidation of the Master Servicer...................................82
                   Section 7.03      Indemnification of the Trustee, the Master Servicer and the Securities
                   Administrator......................................................................................82
                   Section 7.04      Limitations on Liability of the Master Servicer and Others.......................83
                   Section 7.05      Master Servicer Not to Resign....................................................84
                   Section 7.06      Successor Master Servicer........................................................84


                                                          -ii-

<PAGE>



                   Section 7.07      Sale and Assignment of Master Servicing..........................................84

ARTICLE VIII

          Default.....................................................................................................86
                   Section 8.01      Events of Default................................................................86
                   Section 8.02      Trustee to Act; Appointment of Successor.........................................87
                   Section 8.03      Notification to Certificateholders...............................................88
                   Section 8.04      Waiver of Defaults...............................................................88
                   Section 8.05      List of Certificateholders.......................................................89

ARTICLE IX

          Concerning the Trustee and the Securities Administrator.....................................................90
                   Section 9.01      Duties of Trustee................................................................90
                   Section 9.02      Certain Matters Affecting the Trustee and the Securities Administrator
                                                                                                                      92
                   Section 9.03      Trustee and Securities Administrator Not Liable for Certificates or
                   Mortgage Loans.....................................................................................94
                   Section 9.04      Trustee and Securities Administrator May Own Certificates........................94
                   Section 9.05      Trustee's and Securities Administrator's Fees and Expenses.......................94
                   Section 9.06      Eligibility Requirements for Trustee and Securities Administrator
                    ..................................................................................................95
                   Section 9.07      Insurance........................................................................95
                   Section 9.08      Resignation and Removal of the Trustee and Securities Administrator
                                                                                                                      95
                   Section 9.09      Successor Trustee and Successor Securities Administrator.........................96
                   Section 9.10      Merger or Consolidation of Trustee or Securities Administrator
                    ..................................................................................................97
                   Section 9.11      Appointment of Co-Trustee or Separate Trustee....................................97
                   Section 9.12      Federal Information Returns and Reports to Certificateholders; REMIC
                   Administration.....................................................................................98


ARTICLE X

          Termination................................................................................................101
                   Section 10.01     Termination Upon Repurchase by the Seller or its Designee or Liquidation
                   of the Mortgage Loans.............................................................................101
                   Section 10.02     Additional Termination Requirements.............................................103

ARTICLE XI

          Miscellaneous Provisions...................................................................................105
                   Section 11.01     Intent of Parties...............................................................105
                   Section 11.02     Amendment.......................................................................105


                                                         -iii-

<PAGE>



                   Section 11.03     Recordation of Agreement........................................................106
                   Section 11.04     Limitation on Rights of Certificateholders......................................106
                   Section 11.05     Acts of Certificateholders......................................................107
                   Section 11.06     Governing Law...................................................................108
                   Section 11.07     Notices.........................................................................108
                   Section 11.08     Severability of Provisions......................................................108
                   Section 11.09     Successors and Assigns..........................................................109
                   Section 11.10     Article and Section Headings....................................................109
                   Section 11.11     Counterparts....................................................................109
                   Section 11.12     Notice to Rating Agencies.......................................................109




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<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             -     [Reserved]
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-2           -     Form of Rule 144A and Related Matters Certificate
Exhibit G             -     Form of Custodial Agreement
Exhibit H-1 to H-5    -     Servicing Agreements
Exhibit I             -     Assignment Agreements
Exhibit J             -     Mortgage Loan Purchase Agreement



                                       -v-

<PAGE>



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

          Pooling and Servicing Agreement dated as of October 1, 2001, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as seller
(the "Seller"), Bank One, National Association, a national banking association,
not in its individual capacity but solely as trustee (the "Trustee"), Wells
Fargo Bank Minnesota, National Association, as master servicer (in such
capacity, the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator"), and EMC Mortgage Corporation ("EMC").

                              PRELIMINARY STATEMENT

          On or prior to the Closing Date, the Seller acquired the Mortgage
Loans from 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, the 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 approximately $603,046,949.50. The initial principal amount of
the Certificates will not exceed such Outstanding Principal Balance.

          In consideration of the mutual agreements herein contained, the
Seller, the Master Servicer, the Securities Administrator, EMC and the Trustee
agree as follows:


<PAGE>



                                    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.

          ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage
Loan, as applicable, either (x) those customary mortgage servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a Servicer), or
(y) as provided in the applicable Servicing Agreement, to the extent applicable
to any Servicer, but in no event below the standard set forth in clause (x).

          ACCOUNT: The Master Servicer Collection 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 of such Certificate
immediately prior to such Distribution Date, calculated on the basis of a
360-day year 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).

          ADDITIONAL COLLATERAL: As defined in the Cendant/MLCC Servicing
Agreements attached hereto as Exhibit H-2.

          ADDITIONAL COLLATERAL MORTGAGE LOAN: As defined in the Cendant/MLCC
Servicing Agreements attached hereto as Exhibit H-2.

          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.

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

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

                                       -2-

<PAGE>




          (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 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 or Aaa in the case of Moody's. For any
short-term deposit or security, or a rating of A-l+ in the case of S&P or P-1 in
the case of Moody's.

          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
Securities Administrator and the Trustee by either (i) an Opinion of Counsel
reasonably acceptable to the Securities Administrator and 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 AGREEMENTS: The agreements attached hereto as Exhibit I,
whereby the Servicing Agreements were assigned to the Trustee for the benefit of
the Certificateholders

          ASSUMED FINAL DISTRIBUTION DATE: November 25, 2031, or if such day is
not a Business Day, the next succeeding Business Day.

          AVAILABLE FUNDS: With respect to any Distribution Date, the sum of the
Group 1, Group 2, Group 3, Group 4, Group 5, Group 6 and Group 7 Available Funds
for such Distribution Date.


                                       -3-

<PAGE>



          AVERAGE LOSS SEVERITY: With respect to any period and each Loan Group,
the fraction obtained by dividing (x) the aggregate amount of Realized Losses
for the related Mortgage Loans for such period by (y) the number of related
Mortgage Loans which had Realized Losses for such period.

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

          BANK OF AMERICA SERVICING AGREEMENT: The Mortgage Loan Sale and
Servicing Agreement, dated September 1, 2001, between Bank of America, as Seller
and Servicer and EMC, as Purchaser, attached hereto as Exhibit H-1.

          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 or Federal Reserve is closed or on
which banking institutions or the jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities Administrator are authorized or
obligated by law or executive order to be closed.

          CALENDAR QUARTER: January 1 to March 31, April 1 to June 30, July 1 to
September 30, or October 1 to December 31, as applicable.

          CENDANT: Cendant Mortgage Corp.

          CENDANT/MLCC SERVICING AGREEMENTS: The Mortgage Loan Flow Purchase,
Sale and Servicing Agreement, dated as of April 26, 2001, between EMC, as
Purchaser, Cendant and Bishop's Gate Residential Mortgage Trust, as Seller, and
the Mortgage Loan Flow Purchase, Sale and Servicing Agreement, dated as of
February 11, 2000, between Telebank, as Purchaser, Cendant and Bishop's Gate
Residential Mortgage Trust, as Seller, each attached hereto as Exhibit H-2.

          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.

          CERTIFICATE GROUP: The Group 1 Senior Certificates, Group 2 Senior
Certificates, Group 3 Senior Certificates, Group 4 Senior Certificates, Group 5
Senior Certificates, Group 6 Senior Certificates and Group 7 Senior Certificates
as applicable, and the Subordinate Certificates to the extent such Certificates
represent an interest in such groups of Certificates.

          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.


                                       -4-

<PAGE>



          CERTIFICATEHOLDER: A Holder of a Certificate.

          CHEVY CHASE: Chevy Chase Bank, F.S.B.

          CHEVY CHASE SERVICING AGREEMENT: The Purchase, Warranties and
Servicing Agreement, dated as of July 1, 2001, between EMC, as Purchaser and
Chevy Chase, as Company, attached hereto as Exhibit H-3.

          CLASS: With respect to the Certificates, I-A, R-I, R-II, II-A, III-A,
IV-A, V-A, VI-A, VII-A, B-1, B-2, B-3, B-4, B-5, B-6.

          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 and Class R-II Certificates.

          CLOSING DATE: October 15, 2001.

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

          COMPENSATING INTEREST PAYMENT: As defined in Section 6.07.

          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 1 Bank One Plaza,
Mail Suite IL1-0126, Chicago, Illinois 60670, Attention: Global Corporate Trust
Services.

          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 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, 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


                                       -5-

<PAGE>



amount shall be deemed to have Current Principal Amounts equal to their
respective Current Principal Amounts on the day immediately preceding such
Distribution Date.

          CUSTODIAL AGREEMENT: An agreement, dated as of the Closing Date among
the Seller, the Master Servicer, the Trustee and the Custodian in substantially
the form of Exhibit G hereto.

          CUSTODIAN: Wells Fargo Bank Minnesota, National Association, or any
successor custodian appointed pursuant to the provisions hereof and of the
Custodial Agreement.

          CUT-OFF DATE: October 1, 2001.

          CUT-OFF DATE BALANCE: $603,046,949.50.

          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.

          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: With respect to each Mortgage Loan, the
Determination Date as defined in the related Servicing Agreement.

          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
                                       -6-

<PAGE>



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 any REMIC contained in 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 ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.04, which shall be denominated "Bank One,
National Association, as Trustee f/b/o holders of Structured Asset Mortgage
Investments Inc., Bear Stearns ARM Trust, Mortgage Pass-Through Certificates,
Series 2001-8 - Distribution Account."

          DISTRIBUTION ACCOUNT DEPOSIT DATE: The Business Day prior to each
Distribution Date.

          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: Bank One, 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 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 8.01.

          EXCESS LIQUIDATION PROCEEDS: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.

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


                                       -7-

<PAGE>

          FDIC: Federal Deposit Insurance Corporation or any successor thereto.

          FINAL CERTIFICATION: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.

          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 of such
Certificate and the denominator of which is the Current Principal Amount of such
Class. With respect to the Certificates in the aggregate, the fractional
undivided interest evidenced by (i) a Residual Certificate will be deemed to
equal 0.25% multiplied by the percentage interest of such Residual Certificate,
and (ii) a Certificate of any other Class will be deemed to equal 99.50%
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.

          GMAC: GMAC Mortgage Corp.

          GMAC SERVICING AGREEMENT: The Mortgage Loan Purchase and Servicing
Agreement, dated May 1, 2001, between GMAC, as Seller and EMC, as Purchaser, and
the Mortgage Loan Purchase and Servicing Agreement, dated September 1, 2001,
between GMAC, as Seller and EMC, as Purchaser, each attached hereto as Exhibit
H-4.

          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 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 Adjustment Date.

          GROUP 1 AVAILABLE FUNDS, GROUP 2 AVAILABLE FUNDS, GROUP 3 AVAILABLE
FUNDS, GROUP 4 AVAILABLE FUNDS, GROUP 5 AVAILABLE FUNDS, GROUP 6 AVAILABLE FUNDS
OR GROUP 7 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

                                       -8-

<PAGE>



Servicers or the Master Servicer with respect to such Distribution Date, (c) any
other miscellaneous amounts remitted by the Master Servicer or the applicable
Servicers pursuant to the Servicing Agreements, and (d) 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;

                   (vi) any investment earnings on amounts on deposit in the
          Master Servicer Collection Account and the Distribution Account and
          amounts permitted to be withdrawn from the Master Servicing Collection
          Account and the Distribution Account pursuant to this Agreement;

                   (vii) to pay the Servicing Fees or to reimburse any Servicer
          or the Master Servicer for such amounts as are due under the
          applicable Servicing Agreement and the Agreement and have not been
          retained by or paid to such Servicer or the Master Servicer; and

                   (viii) and any expenses, or other amounts reimbursable to,
          the Trustee or the Securities Adminstrator pursuant to Section 9.05.

          In addition on each Distribution Date, the related Available Funds for
each Certificate Group shall be increased by any Required Surety Payment.

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

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

          GROUP 3 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.

          GROUP 4 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.



                                       -9-

<PAGE>



          GROUP 5 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.

          GROUP 6 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.

          GROUP 7 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.

          GROUP 1 SENIOR CERTIFICATES: The Class R-I, Class R-II and Class I-A
Certificates.

          GROUP 2 SENIOR CERTIFICATES: The Class II-A Certificates.

          GROUP 3 SENIOR CERTIFICATES: The Class III-A Certificates.

          GROUP 4 SENIOR CERTIFICATES: The Class IV-A Certificates.

          GROUP 5 SENIOR CERTIFICATES: The Class II-A Certificates.

          GROUP 6 SENIOR CERTIFICATES: The Class III-A Certificates.

          GROUP 7 SENIOR CERTIFICATES: The Class IV-A Certificates.

          GROUP 1 SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP 2 SENIOR OPTIMAL
PRINCIPAL AMOUNT, GROUP 3 SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP 4 SENIOR
OPTIMAL PRINCIPAL AMOUNT, GROUP 5 SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP 6
SENIOR OPTIMAL PRINCIPAL AMOUNT OR GROUP 7 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


                                      -10-

<PAGE>



          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 in the
          related Loan Group or related REO Property in the related Loan Group
          which was purchased by the Mortgage Loan Seller 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 Mortgage Loan Seller with a Substitute Mortgage Loan pursuant to
          Section 2.04 of this Agreement on such Distribution Date over the
          Scheduled Principal Balance of such Substitute Mortgage Loan.

          GROUP 1 SENIOR PERCENTAGE: Initially, 96.50%. 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 Amount of the
Group 1 Senior 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, 96.50%. 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 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.

          GROUP 3 SENIOR PERCENTAGE: Initially, 96.50%. 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 3
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 3 Mortgage Loans as of the
beginning of the related Due Period.

          GROUP 4 SENIOR PERCENTAGE: Initially, 96.50%. 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 4
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 4 Mortgage Loans as of the
beginning of the related Due Period.

          GROUP 5 SENIOR PERCENTAGE: Initially, 96.50 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 5
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 5 Mortgage Loans as of the
beginning of the related Due Period.

          GROUP 6 SENIOR PERCENTAGE: Initially, 96.50%. 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 6
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 6 Mortgage Loans as of the
beginning of the related Due Period.




                                      -11-

<PAGE>



          GROUP 7 SENIOR PERCENTAGE: Initially, 96.50%. 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 7
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 7 Mortgage Loans as of the
beginning of the related Due Period.

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

<TABLE>
<CAPTION>

Period (dates inclusive)                                 Group 1 Senior Prepayment Percentage
-------------------------------------------------------- ----------------------------------------------------------------
<S>                                                      <C>
November 25, 2001 - October 25, 2008                     100%
November 25, 2008 - October 25, 2009                     Group 1 Senior Percentage plus 70% of the Group 1
                                                         Subordinate Percentage
November 25, 2009 - October 25, 2010                     Group 1 Senior Percentage plus 60% of the Group 1
                                                         Subordinate Percentage
November 25, 2010 - October 25, 2011                     Group 1 Senior Percentage plus 40% of the Group 1
                                                         Subordinate Percentage
November 25, 2011 - October 25, 2012                     Group 1 Senior Percentage plus 20% of the Group 1
                                                         Subordinate Percentage
November 25, 2012 and thereafter                         Group 1 Senior Percentage
</TABLE>


          In addition, no reduction of the Group 1 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 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 50%, or
(y) the aggregate Scheduled Principal Balance of the Mortgage Loans 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
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2008 and October 2009, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2009 and October 2010, (c) 40% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including November 2010 and
October 2011, (d) 45% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including November 2011 and October 2012,
and (e) 50% of the Original Subordinate Principal Balance if such Distribution
Date occurs during or after November 2012; or (B) (i) the aggregate Scheduled
Principal Balance of the Mortgage Loans 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; and
(ii) cumulative Realized Losses on the Mortgage Loans do not exceed (a)


                                      -12-

<PAGE>



10% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including November 2008 and October 2009, (b) 15% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including November 2009 and October 2010, (c) 20% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2010 and October 2011, (d) 25% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2011 and October 2012, and (e) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after November
2012.

          In addition, if the current weighted average Subordinate Percentage is
equal to or greater than two times the initial weighted average Subordinate
Percentage for the Certificates, and (a) the aggregate Scheduled Principal
Balance of the Mortgage Loans 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 50% and
(b)(i) prior to the Distribution Date in November 2004 cumulative Realized
Losses on the Mortgage Loans do not exceed 20% of the Original Subordinate
Principal Balance and (ii) on or after the Distribution Date in November 2004
cumulative Realized Losses on the Mortgage Loans do not exceed 30% of the
Original Subordinate Principal Balance, then, in each case, the Group 1 Senior
Prepayment Percentage for such Distribution Date will equal the Group 1 Senior
Percentage; provided, however, if the current weighted average Subordinate
Percentage for the Certificates is equal to or greater than two times the
initial weighted average Subordinate Percentage for the Certificates prior to
November 25, 2004 and the above delinquency and loss tests are met, then the
Group 1 Senior Prepayment Percentage for such Distribution Date will equal the
Group 1 Senior Percentage plus 50% of the Subordinate Percentage.

          Notwithstanding the foregoing, if on any Distribution Date the Group 1
Senior Percentage exceeds the Group 1 Senior Percentage as of the Cut-Off Date,
the Group 1 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 1 Senior Certificates are reduced to zero, the Group 1 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.

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

<TABLE>
<CAPTION>


Period (dates inclusive)                                    Group 2 Senior Prepayment Percentage
----------------------------------------------------------- -------------------------------------------------------------
<S>                                                         <C>
November 25, 2001 - October 25, 2008                        100%
November 25, 2008 - October 25, 2009                        Group 2 Senior Percentage plus 70% of the Group
                                                            2 Subordinate Percentage
November 25, 2009 - October 25, 2010                        Group 2 Senior Percentage plus 60% of the Group
                                                            2 Subordinate Percentage
November 25, 2010 - October 25, 2011                        Group 2 Senior Percentage plus 40% of the Group
                                                            2 Subordinate Percentage


                                      -13-

<PAGE>


November 25, 2011 - October 25, 2012                        Group 2 Senior Percentage plus 20% of the Group
                                                            2 Subordinate Percentage
November 25, 2012 and thereafter                            Group 2 Senior Percentage
</TABLE>


          In addition, no reduction of the Group 2 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 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 50%, or
(y) the aggregate Scheduled Principal Balance of the Mortgage Loans 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
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2008 and October 2009, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2009 and October 2010, (c) 40% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including November 2010 and
October 2011, (d) 45% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including November 2011 and October 2012,
and (e) 50% of the Original Subordinate Principal Balance if such Distribution
Date occurs during or after November 2012; or (B) (i) the aggregate Scheduled
Principal Balance of the Mortgage Loans 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; and
(ii) cumulative Realized Losses on the Mortgage Loans do not exceed (a) 10% of
the Original Subordinate Principal Balance if such Distribution Date occurs
between and including November 2008 and October 2009, (b) 15% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2009 and October 2010, (c) 20% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2010 and October 2011, (d) 25% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including November 2011 and
October 2012, and (e) 30% of the Original Subordinate Principal Balance if such
Distribution Date occurs during or after November 2012.

          In addition, if the current weighted average Subordinate Percentage is
equal to or greater than two times the initial weighted average Subordinate
Percentage for the Certificates, and (a) the aggregate Scheduled Principal
Balance of the Mortgage Loans 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 50% and
(b)(i) prior to the Distribution Date in November 2004 cumulative Realized
Losses on the Mortgage Loans do not exceed 20% of the Original Subordinate
Principal Balance and (ii) on or after the Distribution Date in November 2004
cumulative Realized
                                      -14-

<PAGE>



Losses on the Mortgage Loans do not exceed 30% of the Original Subordinate
Principal Balance, then, in each case, the Group 2 Senior Prepayment Percentage
for such Distribution Date will equal the Group 2 Senior Percentage; provided,
however, if the current weighted average Subordinate Percentage for the
Certificates is equal to or greater than two times the initial weighted average
Subordinate Percentage for the Certificates prior to November 25, 2004 and the
above delinquency and loss tests are met, then the Group 2 Senior Prepayment
Percentage for such Distribution Date will equal the Group 2 Senior Percentage
plus 50% of the Subordinate Percentage.

          Notwithstanding the foregoing, if on any Distribution Date the Group 2
Senior Percentage exceeds the Group 2 Senior Percentage as of the Cut-Off Date,
the Group 2 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 2 Senior Certificates are reduced to zero, the Group 2 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.

          GROUP 3 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:

<TABLE>
<CAPTION>

Period (dates inclusive)                                        Group 3 Senior Prepayment Percentage
--------------------------------------------------------------- ---------------------------------------------------------
<S>                                                             <C>
November 25, 2001 - October 25, 2008                            100%
November 25, 2008 - October 25, 2009                            Group 3 Senior Percentage plus 70% of the
                                                                Group 3 Subordinate Percentage
November 25, 2009 - October 25, 2010                            Group 3 Senior Percentage plus 60% of the
                                                                Group 3 Subordinate Percentage
November 25, 2010 - October 25, 2011                            Group 3 Senior Percentage plus 40% of the
                                                                Group 3 Subordinate Percentage
November 25, 2011 - October 25, 2012                            Group 3 Senior Percentage plus 20% of the
                                                                Group 3 Subordinate Percentage
November 25, 2012 and thereafter                                Group 3 Senior Percentage
</TABLE>


          In addition, no reduction of the Group 3 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 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 50%, or
(y) the aggregate Scheduled Principal Balance of the Mortgage Loans 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
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2008 and October 2009, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2009 and October 2010, (c) 40% of the Original


                                      -15-

<PAGE>



Subordinate Principal Balance if such Distribution Date occurs between and
including November 2010 and October 2011, (d) 45% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2011 and October 2012, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after November
2012; or (B) (i) the aggregate Scheduled Principal Balance of the Mortgage Loans
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; and (ii) cumulative Realized Losses on the
Mortgage Loans do not exceed (a) 10% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including November 2008 and
October 2009, (b) 15% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including November 2009 and October 2010,
(c) 20% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including November 2010 and October 2011, (d) 25% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including November 2011 and October 2012, and (e) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
November 2012.

          In addition, if the current weighted average Subordinate Percentage is
equal to or greater than two times the initial weighted average Subordinate
Percentage for the Certificates, and (a) the aggregate Scheduled Principal
Balance of the Mortgage Loans 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 50% and
(b) (i) prior to the Distribution Date in November 2004 cumulative Realized
Losses on the Mortgage Loans do not exceed 20% of the Original Subordinate
Principal Balance and (ii) on or after the Distribution Date in November 2004
cumulative Realized Losses on the Mortgage Loans do not exceed 30% of the
Original Subordinate Principal Balance, then, in each case, the Group 3 Senior
Prepayment Percentage for such Distribution Date will equal the Group 3 Senior
Percentage; provided, however, if the current weighted average Subordinate
Percentage for the Certificates is equal to or greater than two times the
initial weighted average Subordinate Percentage for the Certificates prior to
November 25, 2004 and the above delinquency and loss tests are met, then the
Group 3 Senior Prepayment Percentage for such Distribution Date will equal the
Group 3 Senior Percentage plus 50% of the Subordinate Percentage.

          Notwithstanding the foregoing, if on any Distribution Date the Group 3
Senior Percentage exceeds the Group 3 Senior Percentage as of the Cut-Off Date,
the Group 3 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 3 Senior Certificates are reduced to zero, the Group 3 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.

          GROUP 4 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:



                                      -16-

<PAGE>



<TABLE>
<CAPTION>

Period (dates inclusive)                                   Group 4 Senior Prepayment Percentage
---------------------------------------------------------- --------------------------------------------------------------
<S>                                                        <C>
November 25, 2001 - October 25, 2008                       100%
November 25, 2008 - October 25, 2009                       Group 4 Senior Percentage plus 70% of the Group
                                                           4 Subordinate Percentage
November 25, 2009 - October 25, 2010                       Group 4 Senior Percentage plus 60% of the Group
                                                           4 Subordinate Percentage
November 25, 2010 - October 25, 2011                       Group 4 Senior Percentage plus 40% of the Group
                                                           4 Subordinate Percentage
November 25, 2011 - October 25, 2012                       Group 4 Senior Percentage plus 20% of the Group
                                                           4 Subordinate Percentage
November 25, 2012 and thereafter                           Group 4 Senior Percentage
</TABLE>


          In addition, no reduction of the Group 4 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 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 50%, or
(y) the aggregate Scheduled Principal Balance of the Mortgage Loans 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
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2008 and October 2009, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2009 and October 2010, (c) 40% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including November 2010 and
October 2011, (d) 45% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including November 2011 and October 2012,
and (e) 50% of the Original Subordinate Principal Balance if such Distribution
Date occurs during or after November 2012; or (B) (i) the aggregate Scheduled
Principal Balance of the Mortgage Loans 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; and
(ii) cumulative Realized Losses on the Mortgage Loans do not exceed (a) 10% of
the Original Subordinate Principal Balance if such Distribution Date occurs
between and including November 2008 and October 2009, (b) 15% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2009 and October 2010, (c) 20% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2010 and October 2011, (d) 25% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including November 2011 and
October 2012, and (e) 30% of the Original Subordinate Principal Balance if such
Distribution Date occurs during or after November 2012.




                                      -17-

<PAGE>



          In addition, if the current weighted average Subordinate Percentage is
equal to or greater than two times the initial weighted average Subordinate
Percentage for the Certificates, and (a) the aggregate Scheduled Principal
Balance of the Mortgage Loans 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 50% and
(b) (i) prior to the Distribution Date in November 2004 cumulative Realized
Losses on the Mortgage Loans do not exceed 20% of the Original Subordinate
Principal Balance and (ii) on or after the Distribution Date in November 2004
cumulative Realized Losses on the Mortgage Loans do not exceed 30% of the
Original Subordinate Principal Balance, then, in each case, the Group 4 Senior
Prepayment Percentage for such Distribution Date will equal the Group 4 Senior
Percentage; provided, however, if the current weighted average Subordinate
Percentage for the Certificates is equal to or greater than two times the
initial weighted average Subordinate Percentage for the Certificates prior to
November 25, 2004, then the Group 4 Senior Prepayment Percentage for such
Distribution Date will equal the Group 4 Senior Percentage plus 50% of the
Subordinate Percentage.

          Notwithstanding the foregoing, if on any Distribution Date the Group 4
Senior Percentage exceeds the Group 4 Senior Percentage as of the Cut-Off Date,
the Group 4 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 4 Senior Certificates are reduced to zero, the Group 4 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.

          GROUP 5 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:

<TABLE>
<CAPTION>

Period (dates inclusive)                                    Group 5 Senior Prepayment Percentage
----------------------------------------------------------- -------------------------------------------------------------
<S>                                                         <C>
November 25, 2001 - October 25, 2008                        100%
November 25, 2008 - October 25, 2009                        Group 5 Senior Percentage plus 70% of the Group
                                                            2 Subordinate Percentage
November 25, 2009 - October 25, 2010                        Group 5 Senior Percentage plus 60% of the Group
                                                            5 Subordinate Percentage
November 25, 2010 - October 25, 2011                        Group 5 Senior Percentage plus 40% of the Group
                                                            5 Subordinate Percentage
November 25, 2011 - October 25, 2012                        Group 5 Senior Percentage plus 20% of the Group
                                                            5 Subordinate Percentage
November 25, 2012 and thereafter                            Group 5 Senior Percentage
</TABLE>


          In addition, no reduction of the Group 5 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 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


                                      -18-

<PAGE>




Certificates does not exceed 50%, or (y) the aggregate Scheduled Principal
Balance of the Mortgage Loans 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 averaged over the last six months, does
not exceed 2.0%; and (ii) cumulative Realized Losses on the Mortgage Loans do
not exceed (a) 30% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including November 2008 and October 2009,
(b) 35% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including November 2009 and October 2010, (c) 40% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including November 2010 and October 2011, (d) 45% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2011 and October 2012, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
November 2012; or (B) (i) the aggregate Scheduled Principal Balance of the
Mortgage Loans 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; and (ii) cumulative Realized Losses on
the Mortgage Loans do not exceed (a) 10% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including November 2008 and
October 2009, (b) 15% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including November 2009 and October 2010,
(c) 20% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including November 2010 and October 2011, (d) 25% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including November 2011 and October 2012, and (e) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
November 2012.

          In addition, if the current weighted average Subordinate Percentage is
equal to or greater than two times the initial weighted average Subordinate
Percentage for the Certificates, and (a) the aggregate Scheduled Principal
Balance of the Mortgage Loans 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 50%
and (b)(i) prior to the Distribution Date in November 2004 cumulative Realized
Losses on the Mortgage Loans do not exceed 20% of the Original Subordinate
Principal Balance and (ii) on or after the Distribution Date in November 2004
cumulative Realized Losses on the Mortgage Loans do not exceed 30% of the
Original Subordinate Principal Balance, then, in each case, the Group 5 Senior
Prepayment Percentage for such Distribution Date will equal the Group 5 Senior
Percentage; provided, however, if the current weighted average Subordinate
Percentage for the Certificates is equal to or greater than two times the
initial weighted average Subordinate Percentage for the Certificates prior to
November 25, 2004 and the above delinquency and loss tests are met, then the
Group 5 Senior Prepayment Percentage for such Distribution Date will equal the
Group 5 Senior Percentage plus 50% of the Subordinate Percentage.

          Notwithstanding the foregoing, if on any Distribution Date the Group 5
Senior Percentage exceeds the Group 5 Senior Percentage as of the Cut-Off Date,
the Group 5 Senior Prepayment
                                      -19-

<PAGE>



Percentage for such Distribution Date will equal 100%. On the Distribution Date
on which the Current Principal Amounts of the Group 5 Senior Certificates are
reduced to zero, the Group 5 Senior Prepayment Percentage shall be the minimum
percentage sufficient to effect such reduction and thereafter shall be zero.

          GROUP 6 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:

<TABLE>
<CAPTION>

Period (dates inclusive)                                        Group 6 Senior Prepayment Percentage
--------------------------------------------------------------- ---------------------------------------------------------
<S>                                                             <C>
November 25, 2001 - October 25, 2008                            100%
November 25, 2008 - October 25, 2009                            Group 6 Senior Percentage plus 70% of the
                                                                Group 6 Subordinate Percentage
November 25, 2009 - October 25, 2010                            Group 6 Senior Percentage plus 60% of the
                                                                Group 6 Subordinate Percentage
November 25, 2010 - October 25, 2011                            Group 6 Senior Percentage plus 40% of the
                                                                Group 6 Subordinate Percentage
November 25, 2011 - October 25, 2012                            Group 6 Senior Percentage plus 20% of the
                                                                Group 6 Subordinate Percentage
November 25, 2012 and thereafter                                Group 6 Senior Percentage
</TABLE>


          In addition, no reduction of the Group 6 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 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 50%, or
(y) the aggregate Scheduled Principal Balance of the Mortgage Loans 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
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2008 and October 2009, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2009 and October 2010, (c) 40% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including November 2010 and
October 2011, (d) 45% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including November 2011 and October 2012,
and (e) 50% of the Original Subordinate Principal Balance if such Distribution
Date occurs during or after November 2012; or (B) (i) the aggregate Scheduled
Principal Balance of the Mortgage Loans 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; and
(ii) cumulative Realized Losses on the Mortgage Loans do not exceed (a) 10% of
the Original Subordinate Principal Balance if such Distribution Date occurs
between and


                                      -20-

<PAGE>



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

          In addition, if the current weighted average Subordinate Percentage is
equal to or greater than two times the initial weighted average Subordinate
Percentage for the Certificates, and (a) the aggregate Scheduled Principal
Balance of the Mortgage Loans 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 50% and
(b) (i) prior to the Distribution Date in November 2004 cumulative Realized
Losses on the Mortgage Loans do not exceed 20% of the Original Subordinate
Principal Balance and (ii) on or after the Distribution Date in November 2004
cumulative Realized Losses on the Mortgage Loans do not exceed 30% of the
Original Subordinate Principal Balance, then, in each case, the Group 6 Senior
Prepayment Percentage for such Distribution Date will equal the Group 6 Senior
Percentage; provided, however, if the current weighted average Subordinate
Percentage for the Certificates is equal to or greater than two times the
initial weighted average Subordinate Percentage for the Certificates prior to
November 25, 2004 and the above delinquency and loss tests are met, then the
Group 6 Senior Prepayment Percentage for such Distribution Date will equal the
Group 6 Senior Percentage plus 50% of the Subordinate Percentage.

          Notwithstanding the foregoing, if on any Distribution Date the Group 6
Senior Percentage exceeds the Group 6 Senior Percentage as of the Cut-Off Date,
the Group 6 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 6 Senior Certificates are reduced to zero, the Group 6 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.

          GROUP 7 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:

<TABLE>
<CAPTION>

Period (dates inclusive)                                   Group 7 Senior Prepayment Percentage
---------------------------------------------------------- --------------------------------------------------------------
<S>                                                        <C>
November 25, 2001 - October 25, 2008                       100%
November 25, 2008 - October 25, 2009                       Group 7 Senior Percentage plus 70% of the Group
                                                           7 Subordinate Percentage
November 25, 2009 - October 25, 2010                       Group 7 Senior Percentage plus 60% of the Group
                                                           7 Subordinate Percentage
November 25, 2010 - October 25, 2011                       Group 7 Senior Percentage plus 40% of the Group
                                                           7 Subordinate Percentage
November 25, 2011 - October 25, 2012                       Group 7 Senior Percentage plus 20% of the Group
                                                           7 Subordinate Percentage


                                      -21-

<PAGE>



November 25, 2012 and thereafter                           Group 7 Senior Percentage
</TABLE>


          In addition, no reduction of the Group 7 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 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 50%, or
(y) the aggregate Scheduled Principal Balance of the Mortgage Loans 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
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2008 and October 2009, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2009 and October 2010, (c) 40% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including November 2010 and
October 2011, (d) 45% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including November 2011 and October 2012,
and (e) 50% of the Original Subordinate Principal Balance if such Distribution
Date occurs during or after November 2012; or (B) (i) the aggregate Scheduled
Principal Balance of the Mortgage Loans 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; and
(ii) cumulative Realized Losses on the Mortgage Loans do not exceed (a) 10% of
the Original Subordinate Principal Balance if such Distribution Date occurs
between and including November 2008 and October 2009, (b) 15% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2009 and October 2010, (c) 20% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
November 2010 and October 2011, (d) 25% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including November 2011 and
October 2012, and (e) 30% of the Original Subordinate Principal Balance if such
Distribution Date occurs during or after November 2012.

          In addition, if the current weighted average Subordinate Percentage is
equal to or greater than two times the initial weighted average Subordinate
Percentage for the Certificates, and (a) the aggregate Scheduled Principal
Balance of the Mortgage Loans 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 50% and
(b) (i) prior to the Distribution Date in November 2004 cumulative Realized
Losses on the Mortgage Loans do not exceed 20% of the Original Subordinate
Principal Balance and (ii) on or after the Distribution Date in November 2004
cumulative Realized Losses on the Mortgage Loans do not exceed 30% of the
Original Subordinate Principal Balance, then, in each case, the Group 7 Senior
Prepayment Percentage for such Distribution Date will equal


                                      -22-

<PAGE>



the Group 7 Senior Percentage; provided, however, if the current weighted
average Subordinate Percentage for the Certificates is equal to or greater than
two times the initial weighted average Subordinate Percentage for the
Certificates prior to November 25, 2004, then the Group 7 Senior Prepayment
Percentage for such Distribution Date will equal the Group 7 Senior Percentage
plus 50% of the Subordinate Percentage.

          Notwithstanding the foregoing, if on any Distribution Date the Group 7
Senior Percentage exceeds the Group 7 Senior Percentage as of the Cut-Off Date,
the Group 7 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 7 Senior Certificates are reduced to zero, the Group 7 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.

          GROUP 1 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group 1 Senior Percentage.

          GROUP 2 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group 2 Senior Percentage.

          GROUP 3 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group 3 Senior Percentage.

          GROUP 4 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group 4 Senior Percentage.

          GROUP 5 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group 2 Senior Percentage.

          GROUP 6 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group 3 Senior Percentage.

          GROUP 7 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group 4 Senior Percentage.

          GROUP 1 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group 1
Mortgage Loans, on any Distribution Date, 100% minus the Group 1 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group 1 Senior Certificates have each been reduced to
zero, the Group 1 Subordinate Prepayment Percentage will equal 100%.

          GROUP 2 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group 2
Mortgage Loans, on any Distribution Date, 100% minus the Group 2 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group 2 Senior Certificates have each been reduced to
zero, the Group 2 Subordinate Prepayment Percentage will equal 100%.

          GROUP 3 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group 3
Mortgage Loans, on any Distribution Date, 100% minus the Group 3 Senior
Prepayment Percentage, except that on

                                      -23-

<PAGE>



any Distribution Date after the Current Principal Amounts of the Group 3 Senior
Certificates have each been reduced to zero, the Group 3 Subordinate Prepayment
Percentage will equal 100%.

          GROUP 4 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group 4
Mortgage Loans, on any Distribution Date, 100% minus the Group 4 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group 4 Senior Certificates have each been reduced to
zero, the Group 4 Subordinate Prepayment Percentage will equal 100%.

          GROUP 5 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group 5
Mortgage Loans, on any Distribution Date, 100% minus the Group 5 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group 5 Senior Certificates have each been reduced to
zero, the Group 5 Subordinate Prepayment Percentage will equal 100%.

          GROUP 6 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group 6
Mortgage Loans, on any Distribution Date, 100% minus the Group 6 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group 6 Senior Certificates have each been reduced to
zero, the Group 6 Subordinate Prepayment Percentage will equal 100%.

          GROUP 7 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group 7
Mortgage Loans, on any Distribution Date, 100% minus the Group 7 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group 7 Senior Certificates have each been reduced to
zero, the Group 7 Subordinate Prepayment Percentage will equal 100%.

          HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 12.02(b) and 12.05(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, the Master Servicer, and the
Securities Administrator and their officers, directors, agents and employees
and, with respect to the Trustee, any separate cotrustee 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.

                                      -24-

<PAGE>




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

          INITIAL CERTIFICATION: The certification substantially in the form of
Exhibit One to the Custodial Agreement.

          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 or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:

          (a) Partial principal prepayments received during the relevant
Prepayment Period: 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.


                                      -25-

<PAGE>




          INTERIM CERTIFICATION: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.

          INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private 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
related Servicer or 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 or the related 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 or the related Servicers, 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, Loan Group 2, Loan Group 3, Loan Group 4,
Loan Group 5, Loan Group 6 or Loan Group 7 as applicable.

          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 GROUP 3: The group of Mortgage Loans designated as belonging to
Loan Group 3 on the Mortgage Loan Schedule.

          LOAN GROUP 4: The group of Mortgage Loans designated as belonging to
Loan Group 4 on the Mortgage Loan Schedule.

          LOAN GROUP 5: The group of Mortgage Loans designated as belonging to
Loan Group 5 on the Mortgage Loan Schedule.

          LOAN GROUP 6: The group of Mortgage Loans designated as belonging to
Loan Group 6 on the Mortgage Loan Schedule.

                                      -26-

<PAGE>




          LOAN GROUP 7: The group of Mortgage Loans designated as belonging to
Loan Group 7 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(c)
hereof.

          LOST NOTES: The original Mortgage Notes that have been lost, as
indicated on the Mortgage Loan Schedule.

          MASTER SERVICER: As of the Closing Date, Wells Fargo Bank Minnesota,
National Association and, thereafter, its respective successors in interest who
meet the qualifications of the Servicing Agreements and this Agreement.

          MASTER SERVICER COLLECTION ACCOUNT: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"Bank One, National Association, as Trustee f/b/o

holders of Structured Asset Mortgage Investments Inc., Bear Stearns ARM Trust,
Mortgage Pass-Through Certificates, Series 2001-8 - Master Servicer Collection
Account."

          MASTER SERVICING COMPENSATION: The meaning specified in Section
3.14(a).

          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.

          MLCC: Merrill Lynch Credit Corporation

          MONTHLY ADVANCE: An advance of principal or interest required to be
made by the applicable Servicer pursuant to the related Servicing Agreement or
the Master Servicer 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.

                                      -27-

<PAGE>




          MORTGAGE LOAN: A mortgage loan 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 October 15, 2001, between EMC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto, attached as Exhibit J.

          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 LOAN SELLER: EMC Mortgage Corporation, as mortgage loan
seller under the Mortgage Loan Purchase 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.

          NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
by the related Servicer or the Master Servicer in accordance with the related
Servicing Agreement or this Agreement and (ii) unreimbursed advances by the
related Servicer or 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 Servicing Fee Rate (expressed as a per
annum rate).

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

          OFFERED CERTIFICATE: Any Senior Certificate or Offered Subordinate
Certificate.

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


                                      -28-

<PAGE>



          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 or
the Seller, as applicable, 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 EMC, 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 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 Liquidation 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

                                      -29-

<PAGE>



          of America or any state thereof (including the Trustee or the Master
          Servicer each 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 or the Master Servicer)
          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% 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 Master Servicer or any
          affiliate of the Trustee or Master Servicer 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.


                                      -30-

<PAGE>



          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.

          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
Certificate.

          PROTECTED ACCOUNT: An account established and maintained for the
benefit of Certificateholders by each Servicer with respect to the related
Mortgage Loans and with respect to REO Property pursuant to the respective
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 and Moody's.

          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

                                      -31-

<PAGE>



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).

          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 Master Servicer
Collection Account, (iii) any REO Property relating to the Mortgage Loans, (iv)
the rights with respect to any related Servicing Agreement, (v) the rights with
respect to any related Servicing Agreement and (vi) any proceeds of the
foregoing.

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

          REMIC I REGULAR INTERESTS: The REMIC I Regular Interests, with such
terms as described in Section 5.01(c).

          REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "A," equal to the ratio among:

(1) the excess of (x) the aggregate Scheduled Principal Balance of the Group 1
Mortgage Loans over (y) the Current Principal Amount of the Group 1 Senior
Certificates;

(2) the excess of (x) the aggregate Scheduled Principal Balance of the Group 2
Mortgage Loans over (y) the Current Principal Amount of the Group 2 Senior
Certificates;

(3) the excess of (x) the aggregate Scheduled Principal Balance of the Group 3
Mortgage Loans over (y) the Current Principal Amount of the Group 3 Senior
Certificates;

(4) the excess of (x) the aggregate Scheduled Principal Balance of the Group 4
Mortgage Loans over (y) the Current Principal Amount of the Group 4 Senior
Certificates;

(5) the excess of (x) the aggregate Scheduled Principal Balance of the Group 5
Mortgage Loans over (y) the Current Principal Amount of the Group 5 Senior
Certificates;


                                      -32-

<PAGE>




(6) the excess of (x) the aggregate Scheduled Principal Balance of the Group 6
Mortgage Loans over (y) the Current Principal Amount of the Group 6 Senior
Certificates; and

(7) the excess of (x) the aggregate Scheduled Principal Balance of the Group 7
Mortgage Loans over (y) the Current Principal Amount of the Group 7 Senior
Certificates.

          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 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 any REMIC or (iii) constitute a taxable
contribution to any 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 by the Mortgage Loan
Seller pursuant to the Mortgage Loan Purchase Agreement or Article II of this
Agreement, 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 month of repurchase, and reduced
by (iii) any portion of the Master Servicing Compensation, 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.

          REQUIRED SURETY PAYMENT: With respect to any Additional Collateral
Mortgage Loan that becomes a Liquidated Mortgage Loan, the lesser of (i) the
principal portion of the Realized Loss with respect to such Mortgage Loan and
(ii) the excess, if any, of (a) the amount of Additional Collateral

                                      -33-

<PAGE>



required at origination with respect to such Mortgage Loan over (b) the net
proceeds realized by the related Servicer from the related Additional
Collateral.

          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, and any other officer
of the Trustee to whom a matter arising hereunder may be referred.


          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 ADMINISTRATOR: Wells Fargo Bank Minnesota, National
Association, or its successor in interest, or any successor securities
administrator appointed as herein provided.

          SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE

                                      -34-

<PAGE>


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 [in the case of the Class B-4, Class B-5 and Class B-6
Certificates:, 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 SECURITIES ADMINISTRATOR, 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.

                                      -35-

<PAGE>





          SENIOR CERTIFICATES: The Group 1 Senior Certificates, Group 2 Senior
Certificates, Group 3 Senior Certificates, Group 4 Senior Certificates, Group 5
Senior Certificates, Group 6 Senior Certificates or Group 7 Senior Certificates.

          SENIOR PERCENTAGE: The Group 1 Senior Percentage, Group 2 Senior
Percentage, Group 3 Senior Percentage, Group 4 Senior Percentage, Group 5 Senior
Percentage, Group 6 Senior Percentage or Group 7 Senior Percentage.

          SENIOR PREPAYMENT PERCENTAGE: The Group 1 Senior Prepayment
Percentage, Group 2 Senior Prepayment Percentage, Group 3 Senior Prepayment
Percentage, Group 4 Senior Prepayment Percentage, Group 5 Senior Prepayment
Percentage, Group 6 Senior Prepayment Percentage or Group 7 Senior Prepayment
Percentage.

          SERVICER: With respect to each Mortgage Loan, the related Underlying
Seller.

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

          SERVICING AGREEMENTS: The Bank of America Servicing Agreement,
Cendant/MLCC Servicing Agreements, Chevy Chase Servicing Agreement, GMAC
Servicing Agreement and WFHM Servicing Agreement.

          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
applicable Servicing Fee Rate.

          SERVICING FEE RATE: As to any Mortgage Loan, a per annum rate as set
forth in the Mortgage Loan Schedule.

          STARTUP DAY: October 15, 2001.

          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: 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):


                                      -36-

<PAGE>




                   (i) the applicable Subordinate Percentage of the principal
          portion of all Scheduled Payments due on each Outstanding Mortgage
          Loan 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 Subordinate Prepayment Percentage of each
          Principal Payment in part during the related Prepayment Period with
          respect to each Mortgage Loan and the applicable Subordinate
          Prepayment Percentage of the Scheduled Principal Balance of each
          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 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 definitions of Group 1
          Senior Optimal Principal Amount, Group 2 Senior Optimal Principal
          Amount, Group 3 Senior Optimal Principal Amount, Group 4 Senior
          Optimal Principal Amount, Group 5 Senior Optimal Principal Amount,
          Group 6 Senior Optimal Principal Amount and Group 7 Senior Optimal
          Principal Amount on such Distribution Date;

                   (iv) the applicable Subordinate Prepayment Percentage of the
          sum of (a) the Scheduled Principal Balance of each Mortgage Loan or
          related REO Property which was purchased with respect to such
          Distribution Date and (b) the difference, if any, between the
          Scheduled Principal Balance of a 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, Group 2 Senior
          Certificates, Group 3 Senior Certificates, Group 4 Senior
          Certificates, Group 5 Senior Certificates, Group 6 Senior Certificates
          or Group 7 Senior Certificates have all been reduced to zero, 100% of
          any Group 1 Senior Optimal Principal Amount, Group 2 Senior Optimal
          Principal Amount, Group 3 Senior Optimal Principal Amount, Group 4
          Senior Optimal Principal Amount, Group 5 Senior Optimal Principal
          Amount, Group 6 Senior Optimal Principal Amount, Group 7 Senior
          Optimal Principal Amount, respectively. After the aggregate Current
          Principal Amount of the Subordinate Certificates has been reduced to
          zero, the Subordinate Optimal Principal Amount shall be zero.

          SUBORDINATE PERCENTAGE: The Group 1, Group 2, Group 3, Group 4, Group
5, Group 6 or Group 7 Subordinate Percentage, with respect to a Group 1, Group
2, Group 3, Group 4, Group 5, Group 6, Group 7 Mortgage Loan, respectively.

          SUBORDINATE PREPAYMENT PERCENTAGE: The Group 1, Group 2, Group 3,
Group 4, Group 5, Group 6 or Group 7 Subordinate Prepayment Percentage, with
respect to a Group 1, Group 2, Group 3, Group 4, Group 5, Group 6 or Group 7
Mortgage Loan, respectively.


                                      -37-

<PAGE>




          SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee
pursuant to the related Servicing Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, 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 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.

          SURETY BOND: The limited purpose Surety Bond (Policy No. AB0039BE),
dated February 28, 1996 in respect to Mortgage Loans originated by MLCC, issued
by Ambac Assurance Corporation (f/k/a Ambac Indemnity Corporation) for the
benefit of certain beneficiaries, including the Trustee for the benefit of the
Certificateholders, but only to the extent that such Surety Bond covers any
Additional Collateral Mortgage Loans.

          TAX ADMINISTRATION AND TAX MATTERS PERSON: The Securities
Administrator 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 9.12 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: Bank One, National Association, or its successor in interest,
or any successor trustee appointed as herein provided.

          UNCERTIFICATED PRINCIPAL BALANCE: With respect to any REMIC I Regular
Interest, the balance thereof as indicated in Section 5.01, as reduced by
amounts allocated thereto in reduction thereof in accordance with Section 5.01.

          UNDERLYING SELLER: With respect to each Mortgage Loan, Bank of
America, MLCC, GMAC, Chevy Chase or WFHM, as indicated on the Mortgage Loan
Schedule.

          UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or
related REO Property such that the complete restoration of such Mortgaged
Property or related REO Property is not fully reimbursable by the hazard
insurance policies required to be maintained pursuant the related Servicing
Agreement, 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

                                      -38-

<PAGE>



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.

          WFHM: Wells Fargo Home Mortgage, Inc.

          WFHM SERVICING AGREEMENT: The Seller's Warranties and Servicing
Agreement, dated as of September 1, 2001, between EMC, as Purchaser and WFHM, as
Company, attached hereto as Exhibit H-5.


                                      -39-


<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
Master Servicer Collection Account, (iii) such assets relating to the Mortgage
Loans as from time to time may be held by the Servicers in Protected Accounts,
the Master Servicer in the Master Servicer Collection Account and the Trustee in
the Distribution Account for the benefit of the Trustee on behalf of the
Certificateholders, (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 rights with
respect to the Servicing Agreements as assigned to the Trustee on behalf of the
Certificateholders by the Assignment Agreements and (viii) 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 or the Custodian, as its agent, with respect to
each Mortgage 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, or lost note
affidavit, (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
"Bank One, National Association, as Trustee", 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 or for Mortgage Loans with respect to which the
related Mortgaged Property is located in a state other than Maryland, Florida,
Mississippi, South Carolina or Tennessee or an Opinion of Counsel has been
provided as set forth in this Section 2.01(b), 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;



                                      -40-

<PAGE>



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, 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"; (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 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 (z) the Seller shall not be
required to deliver intervening assignments or Mortgage Note endorsements
between the related Underlying Seller and EMC Mortgage Corporation, between EMC
Mortgage Corporation and the Depositor, and between the Depositor and the
Trustee; 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 or the Custodian, as its agent, a certification to such effect and shall
deposit all amounts paid in respect of such Mortgage Loans in the Master
Servicer Collection 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 or the Custodian, as its
agent, 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). The Seller need not cause to be
recorded any assignment in any jurisdiction under any state other than Maryland,
Florida, Mississippi, South Carolina and Tennessee; provided, however, that each
assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust or the Trustee or the Custodian, as
its agent, upon the earliest to occur of : (i) reasonable direction by the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less 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 and (iv) the occurrence of a servicing transfer as described in Section
8.02 hereof. 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. On the Closing Date, the
Custodian, with respect to the Mortgage Loans, shall acknowledge with respect to
each Mortgage Loan by an Initial Certification substantially in the form of
Exhibit One to the Custodial Agreement receipt of the Mortgage File, but without
review of such Mortgage File, except to the extent


                                      -41-

<PAGE>



necessary to confirm that such Mortgage File contains the related Mortgage Note
or lost note affidavit. No later than 90 days after the Closing Date (or, with
respect to any Substitute Mortgage Loan, within five Business Days after the
receipt by the Trustee or Custodian thereof), the Trustee agrees, for the
benefit of the Certificateholders, to review or cause to be reviewed by the
Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Seller and the Master Servicer an Interim Certification
substantially in the form annexed as Exhibit Two to the Custodial Agreement. In
conducting such review, the Trustee or Custodian will ascertain whether all
required documents have been executed and received, and based on the Mortgage
Loan Schedule, 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 the Mortgage Loan Schedule. In
performing any such review, the Trustee or the Custodian, as its agent, 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 or the Custodian, as its agent, 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 or the Custodian, as its agent, shall promptly notify the
Mortgage Loan Seller. In accordance with the Mortgage Loan Purchase Agreement,
the Mortgage Loan Seller shall correct or cure any such defect within ninety
(90) days from the date of notice from the Trustee or the Custodian, as its
agent, of the defect and if the Mortgage Loan Seller 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, the
Trustee or the Custodian, as its agent, shall enforce the Mortgage Loan Seller's
obligation pursuant to the Mortgage Loan Purchase Agreement, within 90 days from
the Trustee's or the Custodian's notification, to 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 the Mortgage Loan Seller 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, the Mortgage Loan Seller shall not be
required to purchase such Mortgage Loan if the Mortgage Loan Seller 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 the Mortgage Loan Seller 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 the Mortgage Loan Seller 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 recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Mortgage Loan Seller within thirty days of its
receipt of the original recorded document.

          (b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, 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 as Exhibit Three to the Custodial Agreement. In conducting such
review, the Trustee or the Custodian, as its agent, will ascertain whether an
original of each document required to be recorded has been returned from the
recording office with evidence of


                                      -42-

<PAGE>



recording thereon or a certified copy has been obtained from the
recording office. If the Trustee or the Custodian, as its agent, 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 or the Custodian, as its agent, shall
promptly notify the Mortgage Loan Seller (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). In accordance with the
Mortgage Loan Purchase Agreement, the Mortgage Loan Seller shall correct or cure
any such defect or EMC 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 the Mortgage Loan Seller 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,
the Trustee shall enforce the Mortgage Loan Seller's obligation under the
Mortgage Loan Purchase Agreement to purchase such Mortgage Loan at the
Repurchase Price, provided, however, that if such defect relates solely to the
inability of the Mortgage Loan Seller 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, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan, if the Mortgage Loan Seller 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 the Mortgage
Loan Seller in accordance with Subsections 2.02(a) or (b) above, the Mortgage
Loan Seller shall remit to the Master Servicer the Repurchase Price for deposit
in the Master Servicer Collection Account and the Mortgage Loan Seller shall
provide to the Trustee written notification detailing the components of the
Repurchase Price. Upon deposit of the Repurchase Price in the Master Servicer
Collection Account, the Seller shall notify the Trustee and the Trustee or the
Custodian, as its agent (upon receipt of a Request for Release in the form of
Exhibit D attached hereto with respect to such Mortgage Loan), shall release to
the Mortgage Loan Seller the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment, without recourse,
furnished to it by the Mortgage Loan Seller as are necessary to vest in the
Mortgage Loan Seller 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 and the Master Servicer of such amendment.
The obligation of the Mortgage Loan Seller 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.



                                      -43-

<PAGE>



          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 (noting that the Mortgage Loan Seller has
retained the right in the event of breach of the representations, warranties and
covenants, if any, with respect to the related Mortgage Loans of the related
Servicer under the related Servicing Agreement to enforce the provisions thereof
and to seek all or any available remedies). The obligations of the Mortgage Loan
Seller 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, the Securities Administrator or the Trustee
discovers a breach of any of the representations and warranties set forth in the
Mortgage Loan Purchase Agreement, 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. The Mortgage Loan Seller, 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
the Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, 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 the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, and the Mortgage Loan or the
related property acquired with respect thereto has been sold, then the Mortgage
Loan Seller 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 the Mortgage Loan Seller to the extent not required by law to be paid to
the borrower.) Any such purchase by the Mortgage Loan Seller shall be made by
providing an amount equal to the Repurchase Price to the Master Servicer for
deposit in the Master Servicer Collection Account and written notification
detailing the components of such Repurchase Price. The Seller shall notify the
Trustee and submit to the Trustee or the Custodian, as its agent, a Request for
Release in the form of Exhibit D attached hereto, and the Trustee shall release,
or the Trustee shall cause the Custodian to release, to the Mortgage Loan Seller
the related Mortgage File and the Trustee shall execute and deliver all
instruments of transfer or assignment furnished to it by the Mortgage Loan
Seller, without recourse, as are necessary to vest in the Mortgage Loan Seller
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 the Mortgage Loan Seller 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.



                                      -44-

<PAGE>



          Section 2.04 SUBSTITUTION OF MORTGAGE LOANS. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this Agreement, the Mortgage Loan Seller may, no later than the date by which
such purchase by the Mortgage Loan Seller would otherwise be required, tender to
the Trustee a Substitute Mortgage Loan accompanied by a certificate of an
authorized officer of the Mortgage Loan Seller that such Substitute Mortgage
Loan conforms to the requirements set forth in the definition of "Substitute
Mortgage Loan" in the Mortgage Loan Purchase Agreement or this Agreement, as
applicable; provided, however, that substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, in lieu of
purchase shall not be permitted after the termination of the two-year period
beginning on the Startup Day; provided, further, that if the breach 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 substitution must occur within 90 days
from the date the breach was discovered. The Trustee or the Custodian, as its
agent, shall examine the Mortgage File for any Substitute Mortgage Loan in the
manner set forth in Section 2.02(a) and the Trustee or the Custodian, as its
agent, shall notify the Mortgage Loan Seller, in writing, within five Business
Days after receipt, whether or not the documents relating to the Substitute
Mortgage Loan satisfy the requirements of the fourth sentence of Subsection
2.02(a). Within two Business Days after such notification, the Mortgage Loan
Seller shall provide to the Trustee for deposit in the Distribution 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 the
Mortgage Loan Seller of the Repurchase Price for the purchase of a Mortgage Loan
by the Mortgage Loan Seller. After such notification to the Mortgage Loan Seller
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 the Mortgage Loan Seller. The
Scheduled Principal on a Substitute Mortgage Loan due on the Due Date in the
month of substitution shall be the property of the Mortgage Loan Seller 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 (and delivery to the Trustee or Custodian of a Request
for Release for such Mortgage Loan), the Trustee shall release to the Mortgage
Loan Seller the related Mortgage File related to any Mortgage Loan released
pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, 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 the Mortgage Loan Seller title to and rights under any
Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable. The Mortgage Loan Seller shall
deliver the documents related to the Substitute Mortgage Loan in accordance with
the provisions of the Mortgage Loan Purchase Agreement or Subsections 2.01(b)
and 2.02(b) of this Agreement, as applicable, 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 Mortgage


                                      -45-

<PAGE>



Loan Purchase Agreement shall be deemed to have been made by the Mortgage Loan
Seller with respect to each Substitute Mortgage Loan as of the date of
acceptance of such Mortgage Loan by the Trustee. The Master Servicer shall amend
the Mortgage Loan Schedule to reflect such substitution and shall provide a copy
of such amended Mortgage Loan Schedule to the Trustee 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 and the other assets of REMIC II for the benefit of
the holders of the REMIC II Interests. The Trustee acknowledges receipt of the
REMIC I Regular Interests (which are uncertificated) and the other assets of
REMIC II 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.

        Section 2.06 REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER. The
Seller hereby represents and warrants to the Trustee, the Master Servicer and
the Securities Administrator 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;



                                      -46-

<PAGE>



               (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

               (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.



                                      -47-

<PAGE>



                                   ARTICLE III

                 Administration and Servicing of Mortgage Loans

        Section 3.01 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by each Servicer and
shall cause each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Servicer under the applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, prepare the statements specified in
Section 6.04 and any other information and statements required hereunder. The
Master Servicer shall reconcile the results of its Mortgage Loan monitoring with
the actual remittances of the Servicers to the Protected Account pursuant to the
applicable Servicing Agreements.

        The Trustee shall furnish the Servicers and the Master Servicer with any
powers of attorney and other documents in form as provided to it necessary or
appropriate to enable the Servicers and 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.

        The Trustee shall execute and deliver to the related Servicer and 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.

        Notwithstanding the foregoing or any other provision of this Agreement
or the Cendant/MLCC Servicing Agreements to the contrary, the Master Servicer
shall have no duty or

                                      -48-

<PAGE>



obligation to supervise, monitor or oversee the activities of MLCC or to enforce
the obligation of MLCC under the Cendant/MLCC Servicing Agreements with respect
to any Additional Collateral or any Surety Bond, including, without limitation,
the collection of any amounts owing to the Trust in respect thereof (unless and
until the Master Servicer shall have assumed the obligations of MLCC as
successor Servicer under such Servicing Agreement pursuant to Section 3.02
hereof, in which case, as successor Servicer, it shall be bound to service and
administer the Additional Collateral and the Surety Bond in accordance with the
provisions of such Servicing Agreement).

        Section 3.02 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Seller, the related Servicer 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 the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, accept any contribution to any REMIC after the
Startup Day without receipt of a REMIC Opinion.

        Section 3.03 MONITORING OF SERVICERS. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Seller the compliance by each
Servicer with its duties under the related Servicing Agreement. In the review of
each Servicer's activities, the Master Servicer may rely upon an officer's
certificate of the Servicer with regard to such Servicer's compliance with the
terms of its Servicing Agreement. In the event that the Master Servicer, in its
judgment, determines that a Servicer should be terminated in accordance with its
Servicing Agreement, or that a notice should be sent pursuant to such Servicing
Agreement with respect to the occurrence of an event that, unless cured, would
constitute grounds for such termination, the Master Servicer shall notify the
Seller and the Trustee thereof and the Master Servicer shall issue such notice
or take such other action as it deems appropriate.

          (b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the


                                      -49-

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Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.

        (c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of the Servicer as a result of an event of default
by such Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account.

        (d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.

        (e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces.

        Section 3.04 FIDELITY BOND. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.

          Section 3.05 POWER TO ACT; PROCEDURES. The Master Servicer shall
master service the Mortgage Loans and shall have full power and authority,
subject to the REMIC Provisions and the provisions of Article X hereof, to do
any and all things that it may deem necessary or desirable in connection with
the master servicing and administration of the Mortgage Loans, including but not
limited to the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause REMIC I or REMIC II to fail to qualify as
a REMIC or result in the imposition of a tax upon the Trust Fund (including but
not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to


                                      -50-

<PAGE>



a REMIC set forth in Section 860G(d) of the Code) unless the Master Servicer has
received an Opinion of Counsel (but not at the expense of the Master Servicer)
to the effect that the contemplated action will not would cause REMIC I or REMIC
II to fail to qualify as a REMIC or result in the imposition of a tax upon REMIC
I or REMIC II, as the case may be. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer or any Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with the applicable Servicing
Agreement and this Agreement, and the Trustee shall execute and deliver such
other documents, as the Master Servicer may request, to enable the Master
Servicer to master service and administer the Mortgage Loans and carry out its
duties hereunder, in each case in accordance with Accepted Master Servicing
Practices (and the Trustee shall have no liability for misuse of any such powers
of attorney by the Master Servicer or any Servicer). If the Master Servicer or
the Trustee has been advised that it is likely that the laws of the state in
which action is to be taken prohibit such action if taken in the name of the
Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.11 hereof. In the performance of its duties hereunder, the
Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.

        Section 3.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.

          Section 3.07 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
the Servicer will, if required under the applicable Servicing Agreement,
promptly furnish to the Custodian, on behalf of the Trustee, two copies of a
certification substantially in the form of Exhibit D hereto signed by a
Servicing Officer or in a mutually agreeable electronic format which will, in
lieu of a signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
Protected Account maintained by the applicable Servicer pursuant to Section 4.01
or by the applicable Servicer pursuant to its Servicing Agreement have been or
will be so deposited) and shall request that the Custodian, on behalf of the
Trustee, deliver to the applicable Servicer the related Mortgage File. Upon
receipt of such certification and request, the Custodian, on behalf of the
Trustee, shall promptly release the related Mortgage File to the applicable
Servicer and the Trustee and Custodian shall have no further responsibility with
regard to such Mortgage File. Upon any such payment in full, each Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the Mortgage Loan, an instrument

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<PAGE>



of satisfaction (or assignment of mortgage without recourse) regarding the
Mortgaged Property subject to the Mortgage, which instrument of satisfaction or
assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood
and agreed that no expenses incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the
Protected Account.

        (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of a Servicer or the Master Servicer, and delivery to the Custodian, on
behalf of the Trustee, of two copies of a request for release signed by a
Servicing Officer substantially in the form of Exhibit D (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File held in
its possession or control to the Servicer or the Master Servicer, as applicable.
Such trust receipt shall obligate the Servicer or the Master Servicer to return
the Mortgage File to the Custodian on behalf of the Trustee, when the need
therefor by the Servicer or the Master Servicer no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of a Servicing Officer similar to that hereinabove specified, the Mortgage File
shall be released by the Custodian, on behalf of the Trustee, to the Servicer or
the Master Servicer.

        Section 3.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR TRUSTEE.

          (a) The Master Servicer shall transmit and each Servicer (to the
extent required by the related Servicing Agreement) shall transmit to the
Trustee or Custodian such documents and instruments coming into the possession
of the Master Servicer or such Servicer from time to time as are required by the
terms hereof, or in the case of the Servicers, the applicable Servicing
Agreement, to be delivered to the Trustee or Custodian. Any funds received by
the Master Servicer or by a Servicer in respect of any Mortgage Loan or which
otherwise are collected by the Master Servicer or by a Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall be held for
the benefit of the Trustee and the Certificateholders subject to the Master
Servicer's right to retain or withdraw from the Master Servicer Collection
Account the Master Servicing Compensation and other amounts provided in this
Agreement, and to the right of each Servicer to retain its Servicing Fee and
other amounts as provided in the applicable Servicing Agreement. The Master
Servicer shall, and (to the extent provided in the applicable Servicing
Agreement) shall cause each Servicer to, provide access to information and
documentation regarding the Mortgage Loans to the Trustee, its agents and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the Office of Thrift Supervision or other
regulatory authority, such access to be afforded without charge but only upon
reasonable request in writing and during normal business hours at the offices of
the Master Servicer


                                      -52-

<PAGE>




designated by it. In fulfilling such a request the Master Servicer shall not be
responsible for determining the sufficiency of such information.

        (b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.

        Section 3.09   STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.

        (a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.

        (b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, or by any Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.02 and 4.03. Any cost incurred by the Master Servicer or any Servicer in
maintaining any such insurance if the Mortgagor defaults in its obligation to do
so shall be added to the amount owing under the Mortgage Loan where the terms of
the Mortgage Loan so permit; provided, however, that the addition of any such
cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by the
Master Servicer or such Servicer pursuant to Section 4.02 and 4.03.

          Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured's claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to a Servicer and remitted to the Master Servicer) in respect of such policies,
bonds or contracts shall be promptly deposited in the Master Servicer Collection
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).



                                      -53-

<PAGE>




        Section 3.11   MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

        (a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of such Master
Servicer or Servicer, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause each Servicer (to the extent
required under the related Servicing Agreement) to keep in force and effect (to
the extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.

        (b) The Master Servicer agrees to present, or to cause each Servicer (to
the extent required under the related Servicing Agreement) to present, on behalf
of the Trustee and the Certificateholders, claims to the insurer under any
Primary Mortgage Insurance Policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01
and 4.02, any amounts collected by the Master Servicer or any Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the Master Servicer
Collection Account, subject to withdrawal pursuant to Section 4.03.

        Section 3.12   TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE
                       POLICIES AND DOCUMENTS.

        The Trustee (or the Custodian, as directed by the Trustee), shall retain
possession and custody of the originals (to the extent available) of any Primary
Mortgage Insurance Policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
Custodian, if any, as directed by the Trustee) shall also retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or the Custodian, as directed by the
Trustee), upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.



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<PAGE>



        Section 3.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS. The Master
Servicer shall cause each Servicer (to the extent required under the related
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the applicable Servicing Agreement.

        In addition to the foregoing and subject to the requirements of the
Cendant/MLCC Servicing Agreements, MLCC will use its best reasonable efforts to
realize upon any Additional Collateral for such of the Mortgage Loans secured by
Additional Collateral as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments;
provided that MLCC will not, on behalf of the Trustee, obtain title to any such
Additional Collateral as a result of or in lieu of the disposition thereof or
otherwise, and provided further that (i) MLCC will not proceed with respect to
such Additional Collateral in any manner that would impair the ability to
recover against the related Mortgaged Property, and (ii) MLCC will proceed with
any acquisition of REO Property in a manner that preserves the ability to apply
the proceeds of such Additional Collateral against amounts owed under the
defaulted Mortgage Loan. Any proceeds realized from such Additional Collateral
(other than amounts to be released to the Mortgagor or the related guarantor in
accordance with procedures that MLCC would follow in servicing loans held for
its own account, subject to the terms and conditions of the related Mortgage and
Mortgage Note and to the terms and conditions of any security agreement,
guarantee agreement, mortgage or other agreement governing the disposition of
the proceeds of such Additional Collateral) will be deposited in the Master
Servicer Collection Account, subject to withdrawal pursuant to Section 4.03. Any
other payment received by MLCC and remitted to the Master Servicer in respect of
such Additional Collateral shall be deposited in the Master Servicer Collection
Account subject to withdrawal pursuant to Section 4.03.

        Section 3.14   COMPENSATION FOR THE MASTER SERVICER.

        (a) Pursuant to Article IV all income and gain realized from any
investment of funds in the Distribution Account and the Master Servicer
Collection Account shall be for the benefit of the Master Servicer as
compensation. Servicing compensation in the form of assumption fees, if any,
late payment charges, as collected, if any, or otherwise (but not including any
prepayment premium or penalty) shall be retained by the applicable Servicer and
shall not be deposited in the Protected Account. The Master Servicer will be
entitled to retain, as additional compensation, any interest remitted by a
Servicer in connection with a Principal Prepayment in full or otherwise in
excess of amounts required to be remitted to the Master Servicer Collection
Account. The Master Servicer shall be required to pay all expenses incurred by
it in connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.

        (b) The amount of the aggregate compensation payable as set forth in
Section 3.14(a) (the "Master Servicing Compensation") to the Master Servicer in
respect of any Distribution Date shall be reduced in accordance with Section
6.07.



                                      -55-

<PAGE>



        Section 3.15 REO PROPERTY.

        (a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

        (b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.

        (c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.

        (d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Master Servicer Collection Account on the next succeeding Remittance Date.

        Section 3.16   ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

          (a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before May 31 of each year, commencing on May 31, 2002, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that any Servicer has failed
to perform any of its duties, responsibilities and obligations under its
Servicing Agreement in


                                      -56-

<PAGE>



all material respects throughout such year, or, if there has been a material
default in the performance or fulfillment of any such duties, responsibilities
or obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof.

        (b) Copies of such statements shall be provided to any Certificateholder
upon request, by the Master Servicer or by the Trustee at the Master Servicer's
expense if the Master Servicer failed to provide such copies (unless (i) the
Master Servicer shall have failed to provide the Trustee with such statement or
(ii) the Trustee shall be unaware of the Master Servicer's failure to provide
such statement).

        Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Seller on or
before May 31 of each year, commencing on May 31, 2002 to the effect that, with
respect to the most recently ended fiscal year, such firm has examined certain
records and documents relating to the Master Servicer's performance of its
servicing obligations under this Agreement and pooling and servicing and trust
agreements in material respects similar to this Agreement and to each other and
that, on the basis of such examination conducted substantially in compliance
with the audit program for mortgages serviced for Freddie Mac or the Uniform
Single Attestation Program for Mortgage Bankers, such firm is of the opinion
that the Master Servicer's activities have been conducted in compliance with
this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Freddie Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies. If
such report discloses exceptions that are material, the Master Servicer shall
advise the Trustee whether such exceptions have been or are susceptible of cure,
and will take prompt action to do so.

        Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
Within 15 days after each Distribution Date, the Securities Administrator 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 Trustee who shall furnish a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30, 2002, the Securities Administrator 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, 2002, the Securities Administrator shall file a Form 10-K, in substance
conforming to industry standards, with respect to the Trust Fund. The Seller
hereby grants to the Securities Administrator 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
Securities Administrator 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 Securities Administrator, 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 Securities
Administrator reasonably deems appropriate


                                      -57-

<PAGE>



to prepare and file all necessary reports with the Commission. The Securities
Administrator shall have no responsibility to file any items other than those
specified in this Section 3.18; provided, however, the Securities Administrator
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 Securities Administrator 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 Securities Administrator in connection with this
Section 3.18 shall not be reimbursable from the Trust Fund.

          Section 3.19 EMC. On the Closing Date, EMC will receive from the
Seller a payment of $5,000.

        Section 3.20 UCC. The Trustee agrees to file continuation statements for
any Uniform Commercial Code financing statements which the Seller has informed
the Trustee were filed on the Closing Date in connection with the Trust. The
Seller shall file any financing statements or amendments thereto required by any
change in the Uniform Commercial Code.

        Section 3.21   OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.

        With respect to any Mortgage Loans which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, EMC shall have the right purchase any Mortgage Loan from the Trust
which becomes 90 days or more delinquent or becomes an REO Property at a price
equal to the Repurchase Price; provided however (i) that such Mortgage Loan is
still 90 days or more delinquent or is an REO Property as of the date of such
purchase and (ii) this purchase option, if not theretofore exercised, shall
terminate on the date prior to the last day of the related Calendar Quarter.
This purchase option, if not exercised, shall not be thereafter reinstated
unless the delinquency is cured and the Mortgage Loan thereafter again becomes
90 days or more delinquent or becomes an REO Property, in which case the option
shall again become exercisable as of the first day of the related Calendar
Quarter.

        If at any time EMC remits to the Master Servicer a payment for deposit
in the Master Servicer Collection Account covering the amount of the Repurchase
Price for such a Mortgage Loan, and EMC provides to the Trustee a certification
signed by a Servicing Officer stating that the amount of such payment has been
deposited in the Master Servicer Collection Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the request of EMC without
recourse to EMC which shall succeed to all the Trustee's right, title and
interest in and to such Mortgage Loan, and all security and documents relative
thereto. Such assignment shall be an assignment outright and not for security.
EMC will thereupon own such Mortgage, and all such security and documents, free
of any further obligation to the Trustee or the Certificateholders with respect
thereto.



                                      -58-

<PAGE>



                                   ARTICLE IV

                                    Accounts

        Section 4.01 PROTECTED ACCOUNTS. (a) The Master Servicer shall enforce
the obligation of each Servicer to establish and maintain a Protected Account in
accordance with the applicable Servicing Agreement, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within 48 hours (or as of such other time specified in the
related Servicing Agreement) of receipt all collections of principal and
interest on any Mortgage Loan and with respect to any REO Property received by a
Servicer, including Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds, and advances made from the Servicer's own funds (less servicing
compensation as permitted by the applicable Servicing Agreement in the case of
any Servicer) and all other amounts to be deposited in the Protected Account.
The Servicer is hereby authorized to make withdrawals from and deposits to the
related Protected Account for purposes required or permitted by this Agreement.
To the extent provided in the related Servicing Agreement, the Protected Account
shall be held in a Designated Depository Institution and segregated on the books
of such institution in the name of the Trustee for the benefit of
Certificateholders.

        (b) To the extent provided in the related Servicing Agreement, amounts
on deposit in a Protected Account may be invested in Permitted Investments in
the name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Permitted Investments to mature, or to be subject to redemption or withdrawal,
no later than the date on which such funds are required to be withdrawn for
deposit in the Master Servicer Collection Account, and shall be held until
required for such deposit. The income earned from Permitted Investments made
pursuant to this Section 4.01 shall be paid to the related Servicer under the
applicable Servicing Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall be
borne by and be the risk of the related Servicer. The related Servicer (to the
extent provided in the Servicing Agreement) shall deposit the amount of any such
loss in the Protected Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.

        (c) To the extent provided in the related Servicing Agreement and
subject to this Article IV, on or before each Servicer Remittance Date, the
related Servicer shall withdraw or shall cause to be withdrawn from the
Protected Accounts and shall immediately deposit or cause to be deposited in the
Master Servicer Collection Account amounts representing the following
collections and payments (other than with respect to principal of or interest on
the Mortgage Loans due on or before the Cut-off Date) with respect to each Loan
Group:

               (i) Scheduled Payments on the Mortgage Loans received or any
        related portion thereof advanced by the Servicers pursuant to the
        Servicing Agreements which were due on or before the related Due Date,
        net of the amount thereof comprising the Servicing Fees;



                                      -59-

<PAGE>



               (ii) Full Principal Prepayments and any Liquidation Proceeds
        received by the Servicers with respect to such Mortgage Loans in the
        related Prepayment Period, with interest to the date of prepayment or
        liquidation, net of the amount thereof comprising the Servicing Fees;

               (iii) Partial Principal Prepayments received by the Servicers for
        such Mortgage Loans in the related Prepayment Period; and

               (iv)    Any amount to be used as an Advance.

        (d) Withdrawals may be made from an Account only to make remittances as
provided in Section 4.01(c), 4.02 and 4.03; to reimburse the Master Servicer or
a Servicer for Monthly Advances which have been recovered by subsequent
collection from the related Mortgagor; to remove amounts deposited in error; to
remove fees, charges or other such amounts deposited on a temporary basis; or to
clear and terminate the account at the termination of this Agreement in
accordance with Section 10.01. As provided in Sections 4.01(c) and 4.02(b)
certain amounts otherwise due to the Servicers may be retained by them and need
not be deposited in the Master Servicer Collection Account.

        Section 4.02 MASTER SERVICER COLLECTION ACCOUNT. (a) The Master Servicer
shall establish and maintain in the name of the Trustee, for the benefit of the
Certificateholders, the Master Servicer Collection Account as a segregated trust
account or accounts. The Master Servicer will deposit in the Master Servicer
Collection Account as identified by the Master Servicer and as received by the
Master Servicer, 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 Master Servicer or which were not deposited in a
        Protected Account;

               (iv) The Repurchase Price with respect to any Mortgage Loans
        purchased by the Mortgage Loan Seller or Section 2.02 or 2.03, any
        amounts which are to be treated pursuant to Section 2.04 of this
        Agreement as the payment of such a Repurchase Price, the Repurchase
        Price with respect to any Mortgage Loans purchased by EMC pursuant to
        Section 3.21, and all proceeds of any Mortgage Loans or property
        acquired with respect thereto repurchased by the Seller or its designee
        pursuant to Section 10.01;

               (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 Master
        Servicer Collection Account pursuant to this Agreement.

                                      -60-
<PAGE>


        (b) All amounts deposited to the Master Servicer Collection Account
shall be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (xi) and (xii) with respect to the
Securities Administrator, need not be credited by the Master Servicer or the
related Servicer to the Distribution Account or the Master Servicer Collection
Account, as applicable. In the event that the Master Servicer shall deposit or
cause to be deposited to the Distribution Account any amount not required to be
credited thereto, the Trustee, upon receipt of a written request therefor signed
by a Servicing Officer of the Master Servicer, shall promptly transfer such
amount to the Master Servicer, any provision herein to the contrary
notwithstanding.

        (c) The amount at any time credited to the Master Servicer Collection
Account shall be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Account Deposit Date. Any and all investment earnings
from the Master Servicer Collection Account shall be paid to the Master
Servicer. The risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer. The Master Servicer shall deposit the amount of any
such loss in the Master Servicer Collection Account within two Business Days of
receipt of notification of such loss but not later than the second Business Day
prior to the Distribution Date on which the moneys so invested are required to
be distributed to the Certificateholders.

        Section 4.03 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER
SERVICER COLLECTION ACCOUNT. (a) The Master Servicer will, from time to time on
demand of the Master Servicer or the Securities Administrator, make or cause to
be made such withdrawals or transfers from the Master Servicer Collection
Account as the Master Servicer has designated for such transfer or withdrawal
pursuant to the Servicing Agreements. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 10.01 and
remove amounts from time to time deposited in error.

        (b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account any expenses recoverable by the Trustee, the
Master Servicer or the Securities Administrator pursuant to Sections 3.03, 7.01,
7.04 and 9.05.

        (c) In addition, on or before each Distribution Account Deposit Date,
the Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.

        (d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on deposit
in the Master Servicer Collection

                                      -61-
<PAGE>




Account with respect to the related Distribution Date to the Trustee for deposit
in the Distribution Account.

          Section 4.04 DISTRIBUTION ACCOUNT. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Distribution Account as a segregated trust account or accounts.

        (b) All amounts deposited to the Distribution 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 Distribution 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 Distribution 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 Distribution 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 Master Servicer or
deposited in demand deposits with such depository institutions as selected by
the Master Servicer, 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 deposit
in the Distribution Account or benefit from funds uninvested therein from time
to time shall be for the account of the Master Servicer. The Master Servicer
shall be permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Master Servicer shall
remit the amount of the loss to the Trustee who shall deposit such amount in the
Distribution Account. With respect to the Distribution Account and the funds
deposited therein, the Master Servicer 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), and applicable
regulations pursuant thereto, if applicable, or any applicable comparable state
statute applicable to state chartered banking corporations.

        Section 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT. (a) The Trustee will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to the Servicing
Agreements or as the Securities Administrator has instructed hereunder for the
following purposes (limited in the case of amounts due the Master Servicer to
those not withdrawn from the Master Servicer Collection Account in accordance
with the terms of this Agreement):

               (i) to reimburse the Master Servicer or any Servicer for any
        Monthly Advance of its own funds or any advance of such Servicer's own
        funds, the right of the Master


                                      -62-
<PAGE>



        Servicer or a Servicer to reimbursement pursuant to this subclause (i)
        being limited to amounts received on a particular Mortgage Loan
        (including, for this purpose, the Repurchase Price therefor, Insurance
        Proceeds and Liquidation Proceeds) which represent late payments or
        recoveries of the principal of or interest on such Mortgage Loan
        respecting which such Monthly Advance or advance was made;

               (ii) to reimburse the Master Servicer or any Servicer from
        Insurance Proceeds or Liquidation Proceeds relating to a particular
        Mortgage Loan for amounts expended by the Master Servicer or such
        Servicer in good faith in connection with the restoration of the related
        Mortgaged Property which was damaged by an Uninsured Cause or in
        connection with the liquidation of such Mortgage Loan;

               (iii) to reimburse the Master Servicer or any Servicer from
        Insurance Proceeds relating to a particular Mortgage Loan for insured
        expenses incurred with respect to such Mortgage Loan and to reimburse
        the Master Servicer or such Servicer from Liquidation Proceeds from a
        particular Mortgage Loan for Liquidation Expenses incurred with respect
        to such Mortgage Loan; provided that the Master Servicer shall not be
        entitled to reimbursement for Liquidation Expenses with respect to a
        Mortgage Loan to the extent that (i) any amounts with respect to such
        Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to
        clause (xi) of this Subsection (a) to the Master Servicer; and (ii) such
        Liquidation Expenses were not included in the computation of such Excess
        Liquidation Proceeds;

               (iv) to pay the Master Servicer or any Servicer, as appropriate,
        from Liquidation Proceeds or Insurance Proceeds received in connection
        with the liquidation of any Mortgage Loan, the amount which it or such
        Servicer would have been entitled to receive under subclause (ix) of
        this Subsection 4.03(a) as servicing compensation on account of each
        defaulted scheduled payment on such Mortgage Loan if paid in a timely
        manner by the related Mortgagor;

               (v) to pay the Master Servicer or any Servicer from the
        Repurchase Price for any Mortgage Loan, the amount which it or such
        Servicer would have been entitled to receive under subclause (ix) of
        this Subsection (a) as servicing compensation;

               (vi) to reimburse the Master Servicer or any Servicer for
        advances of funds pursuant to Sections, and the right to reimbursement
        pursuant to this subclause being limited to amounts received on the
        related Mortgage Loan (including, for this purpose, the Repurchase Price
        therefor, Insurance Proceeds and Liquidation Proceeds) which represent
        late recoveries of the payments for which such advances were made;

               (vii) to reimburse the Master Servicer or any Servicer for any
        Monthly Advance or advance, after a Realized Loss has been allocated
        with respect to the related Mortgage Loan if the Monthly Advance or
        advance has not been reimbursed pursuant to clauses (i) and (vi);

               (viii)  to pay the Master Servicer as set forth in Section 3.14;

                                      -63-
<PAGE>




               (ix) to reimburse the Master Servicer for expenses, costs and
        liabilities incurred by and reimbursable to it pursuant to Sections
        3.03, 7.04(c) and (d) and 12.03;

               (x) to pay to the Master Servicer, as additional servicing
        compensation, any Excess Liquidation Proceeds to the extent not
        retained by the related Servicer;

               (xi) to reimburse or pay any Servicer any such amounts as are due
        thereto under the applicable Servicing Agreement and have not been
        retained by or paid to the Servicer, to the extent provided in the
        related Servicing Agreement;

               (xii) to reimburse the Trustee or the Securities Administrator
        for expenses, costs and liabilities incurred by or reimbursable to it
        pursuant to this Agreement;

               (xiii)  to remove amounts deposited in error; and

               (xiv)   to clear and terminate the Distribution Account pursuant
        to Section 10.01.

        (b) The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
4.02(b).

        (c) On each Distribution Date, the Trustee shall distribute the Group
Available Funds for each Loan Group to the Holders of the Certificates in
accordance with Section 6.01.



                                      -64-
<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 the Closing Date
(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.

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


                                      -65-
<PAGE>




"residual interest" in REMIC I. Distributions shall be deemed to be made to the
REMIC I Regular Interests first, so as to keep the Uncertificated Principal
Balance of each REMIC I Regular Interest ending with the designation "B" equal
to 0.01% of the aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Group; second, to each REMIC I Regular Interest ending with the
designation "A," so that the Uncertificated Principal Balance of each such REMIC
I Regular Interest is equal to 0.01% of the excess of (x) the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Group over (y)
the Current Principal Amount of the Senior Certificate in the related Group
(except that if any such excess is a larger number than in the preceding
distribution period, the least amount of principal shall be distributed to such
REMIC I Regular Interests such that the Subordinate Balance Ratio is
maintained); and third, any remaining principal to the Class ZZZ Certificates.
Realized Losses shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the Uncertificated Principal Balance of
each REMIC I Regular Interest ending with the designation "B" equal to 0.01% of
the aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Group; second, to each REMIC I Regular Interest ending with the designation "A,"
so that the Uncertificated Principal Balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Group over (y) the
Current Principal Amount of the Senior Certificate in the related Group (except
that if any such excess is a larger number than in the preceding distribution
period, the least amount of Realized Losses shall be applied to such REMIC I
Regular Interests such that the Subordinate Balance Ratio is maintained); and
third, the remaining Realized Losses shall be allocated to the Class ZZZ
Certificate.

        The REMIC I Regular Certificates and the Class R-I Certificates will
have the following designations and pass-through rates:



     REMIC I
    Interest        Initial Balance     Pass-Through Rate      Related Group
--------------------------------------------------------------------------------
       1A          $            119.50         (8)                Group 1
       1B          $          3,414.31         (1)                Group 1
       2A          $            172.71         (8)                Group 2
       2B          $          4,934.40         (2)                Group 2
       3A          $            610.01         (8)                Group 3
       3B          $         17,428.75         (3)                Group 3
       4A          $            228.67         (8)                Group 4
       4B          $          6,533.14         (4)                Group 4
       5A          $            288.82         (8)                Group 5
       5B          $          8,251.88         (5)                Group 5
       6A          $            501.88         (8)                Group 6
       6B          $         14,339.16         (6)                Group 6
       7A          $            189.11         (8)                Group 7
       7B          $          5,403.05         (7)                Group 7
       ZZZ         $    602,984,484.60  `      (8)                  N/A
    Class R-I      $             50.00         (1)                Group 1



                                      -66-
<PAGE>






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


(1)     The weighted average of the Net Rates of the Group 1 Mortgage Loans.

(2)     The weighted average of the Net Rates of the Group 2 Mortgage Loans.

(3)     The weighted average of the Net Rates of the Group 3 Mortgage Loans.

(4)     The weighted average of the Net Rates of the Group 4 Mortgage Loans.

(5)     The weighted average of the Net Rates of the Group 5 Mortgage Loans.

(6)     The weighted average of the Net Rates of the Group 6 Mortgage Loans.

(7)     The weighted average of the Net Rates of the Group 7 Mortgage Loans.

(8)     The weighted average of the Net Rates of the Mortgage Loans.

               (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 I 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.

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

DESIGNATION        INITIAL PRINCIPAL AMOUNT              PASS-THROUGH RATE
-----------        ------------------------              -----------------
I-A                $ 32,948,000.00                       (1)
II-A               $ 47,616,900.00                       (2)
III-A              $ 168,187,400.00                      (3)
IV-A               $ 63,044,700.00                       (4)
V-A                $ 79,630,600.00                       (5)
VI-A               $ 138,372,800.00                      (6)
VII-A              $ 52,139,400.00                       (7)
R-I                $ 50.00                               (8)
R-II               $ 50.00                               (8)
B-1                $ 8,141,200.00                        (9)
B-2                $ 5,427,300.00                        (9)
B-3                $ 3,316,900.00                        (9)
B-4                $ 1,507,700.00                        (9)
B-5                $ 1,507,500.00                        (9)
B-6                $ 1,206,449.50                        (9)

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

          (1) The Class I-A 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

                                      -67-
<PAGE>





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
6.693% 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
6.214% per annum.

          (3) The Class III-A Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 3
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
6.299% per annum.

          (4) The Class IV-A Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 4
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
6.514% per annum.

          (5) The Class V-A Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 5
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
6.545% per annum.

          (6) The Class VI-A Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 6
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
6.709% per annum.

          (7) The Class VII-A Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 7
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
6.825% per annum.

          (8) The Class R-I and R-II Certificates will bear interest at a
variable pass-through rate equal to the weighted average of the Net Rates of the
Group I Mortgage Loans. The pass-through rate with respect to the first interest
accrual period is expected to be approximately 6.693% per annum.

          (9) 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 Pass-Through Rates on each REMIC I Regular
Interest ending with the designation "A"; provided that for purposes of such
weighted average, the Pass-Through Rate of each such REMIC I Regular Interest
shall be subject to a cap and a floor equal to the weighted average of the Net
Rates of the Mortgage Loans in the Related Group. The Pass-Through Rates with
respect to the first interest accrual period is expected to be approximately
6.516% per annum.


                                      -68-

<PAGE>




        In addition to the interest and principal described above, the Class R-I
and Class R-II Certificates shall each be entitled to all distributions from
their respective REMICs, if any, that are not otherwise provided for herein. For
Federal income tax purposes, the Class R-I Certificates shall be deemed to
contribute on the first Distribution Date to REMIC in respect of payment to the
Class R-I Certificates an amount equal to the difference between the Net Rates
of the Group 1 Mortgage Loans and the Net Rates of the MOrtgage Loans on a
balance equal to the Initial Principal Amount of the Class R-I Certificates,
divided by 12.

        (d) 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.

        (e) 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 of such Class applicable to
such Distribution Date.

        (f) 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.

          (g) 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
Residual 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


                                      -69-
<PAGE>



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 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.

        (h) 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.

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

        (j) 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.

        (k) 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.

        (l) The following legend shall be placed on the Residual Certificates
and Private Certificates, whether upon original issuance or upon issuance of any
other Certificate of any such Class in exchange therefor or upon transfer
thereof:

        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 [in the case of Private Certificates Only],
        UNLESS THE

                                      -70-
<PAGE>





        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
        SECURITIES ADMINISTRATOR, 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 5.02 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 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

                                      -71-
<PAGE>




        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.

        (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

                                      -72-
<PAGE>



        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.

          (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

                                      -73-
<PAGE>



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.

        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.

                                      -74-
<PAGE>






        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.

        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

                                      -75-
<PAGE>


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.

        (d) By accepting a Residual Certificate, the purchaser thereof agrees to
be a Tax Matters Person, and appoints the Securities Administrator 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 Private Certificates shall each bear a Securities Legend.

          Section 5.07 ERISA RESTRICTIONS. (a) Subject to the provisions of
subsection (b), no Residual Certificates or Private 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, the
Master Servicer and the Securities Administrator with an Opinion of Counsel
satisfactory to the Trustee, the Master Servicer and the Securities
Administrator, which opinion will not be at the expense of the Trustee, the
Master Servicer or the Securities Administrator, 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 nonexempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Trustee, the Master
Servicer or the Securities Administrator to any obligation in addition to those
undertaken in the Agreement or (ii) in the case of the Class B-4, Class B-5 and
Class B-6 Certificates, 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


                                      -76-

<PAGE>



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
Securities Administrator, the Master Servicer or the Trustee to any obligation
in addition to those undertaken in the Agreement.

        (b) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that in the case of the Class B-4, Class B-5 and
Class B-6 Certificates, 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
Securities Administrator, the Master Servicer or the Trustee to any obligation
in addition to those undertaken in the Agreement.

        (c) Neither the Trustee, the Master Servicer nor the Securities
Administrator will 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, the Securities
Administrator and the Master Servicer from and against any and all liabilities,
claims, costs or expenses incurred by the Trustee, the Securities Administrator
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.


                                      -77-
<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 November 2001, in an aggregate amount equal to the sum of
the Available Funds for such Distribution Date.

               (i)     On each Distribution Date, the Available Funds shall be
distributed as follows:

               (A) On each Distribution Date prior to the Cross-Over Date, the
               Group 1 Available Funds will be distributed in the following
               order of priority among the Group 1 Senior Certificates:

                       first, to the Class I-A Certificates, the Accrued
                       Certificate Interest on such Class for such Distribution
                       Date;

                       second, to the Class I-A Certificates, any Accrued
                       Certificate Interest thereon remaining undistributed from
                       previous Distribution Dates, to the extent of remaining
                       Group 1 Available Funds;

                       third, sequentially, in the following order, to the Class
                       R-I, Class R-II and Class I-A Certificates, in reduction
                       of the Current Principal Amounts thereof, the Group 1
                       Senior Optimal Principal Amount for such Distribution
                       Date to the extent of remaining Group 1 Available Funds,
                       until the Current Principal Amounts thereof have been
                       reduced to zero;

               (B) On each Distribution Date prior to the Cross-Over Date, the
               Group 2 Available Funds will be distributed to the Group 2 Senior
               Certificates as follows:

                       first, to the Group 2 Senior Certificates, the Accrued
                       Certificate Interest on such Class for such Distribution
                       Date;

                       second, to the Group 2 Senior Certificates, any Accrued
                       Certificate Interest thereon remaining undistributed from
                       previous Distribution Dates, to the extent of remaining
                       Group 2 Available Funds;

                       third, to the Group 2 Senior Certificates, the Group 2
                       Optimal Principal Amount for such Distribution Date to
                       the extent of remaining Group 2 Available Funds, until
                       the Current Principal Amount of the Group 2 Senior
                       Certificates has been reduced to zero.

               (C) On each Distribution Date prior to the Cross-Over Date, the
               Group 3 Available Funds will be distributed to the Group 3 Senior
               Certificates as follows:


                                      -78-
<PAGE>





                       first, to the Group 3 Senior Certificates, the Accrued
                       Certificate Interest on such Class for such Distribution
                       Date;

                       second, to the Group 3 Senior Certificates, any Accrued
                       Certificate Interest thereon remaining undistributed from
                       previous Distribution Dates, to the extent of remaining
                       Group 3 Available Funds;

                       third, to the Group 3 Senior Certificates, in reduction
                       of the Current Principal Amount thereof, the Group 3
                       Optimal Principal Amount for such Distribution Date to
                       the extent of remaining Group 3 Available Funds, until
                       the Current Principal Amount of the Group 3 Senior
                       Certificates has been reduced to zero.

               (D) On each Distribution Date prior to the Cross-Over Date, the
               Group 4 Available Funds will be distributed to the Group 4 Senior
               Certificates as follows:

                       first, to the Group 4 Senior Certificates, the Accrued
                       Certificate Interest on such Class for such Distribution
                       Date;

                       second, to the Group 4 Senior Certificates, any Accrued
                       Certificate Interest thereon remaining undistributed from
                       previous Distribution Dates, to the extent of remaining
                       Group 4 Available Funds;

                       third, to the Group 4 Senior Certificates, in reduction
                       of the Current Principal Amount thereof, the Group 4
                       Optimal Principal Amount for such Distribution Date to
                       the extent of remaining Group 4 Available Funds, until
                       the Current Principal Amount of the Group 4 Senior
                       Certificates has been reduced to zero.

               (E) On each Distribution Date prior to the Cross-Over Date, the
               Group 5 Available Funds will be distributed to the Group 5 Senior
               Certificates as follows:

                       first, to the Group 5 Senior Certificates, the Accrued
                       Certificate Interest on such Class for such Distribution
                       Date;

                       second, to the Group 5 Senior Certificates, any Accrued
                       Certificate Interest thereon remaining undistributed from
                       previous Distribution Dates, to the extent of remaining
                       Group 5 Available Funds;

                       third, to the Group 5 Senior Certificates, in reduction
                       of the Current Principal Amount thereof, the Group 5
                       Optimal Principal Amount for such Distribution Date
                       to the extent of remaining Group 5 Available Funds, until
                       the Current Principal Amount of the Group 5 Senior
                       Certificates has been reduced to zero.



                                      -79-

<PAGE>



               (F) On each Distribution Date prior to the Cross-Over Date, the
               Group 6 Available Funds will be distributed to the Group 6 Senior
               Certificates as follows:

                       first, to the Group 6 Senior Certificates, the Accrued
                       Certificate Interest on such Class for such Distribution
                       Date;

                       second, to the Group 6 Senior Certificates, any Accrued
                       Certificate Interest thereon remaining undistributed from
                       previous Distribution Dates, to the extent of remaining
                       Group 6 Available Funds;

                       third, to the Group 6 Senior Certificates, in reduction
                       of the Current Principal Amount thereof, the Group 6
                       Optimal Principal Amount for such Distribution Date to
                       the extent of remaining Group 6 Available Funds, until
                       the Current Principal Amount of the Group 6 Senior
                       Certificates has been reduced to zero.

               (G) On each Distribution Date prior to the Cross-Over Date, the
               Group 7 Available Funds will be distributed to the Group 7 Senior
               Certificates as follows:

                       first, to the Group 7 Senior Certificates, the Accrued
                       Certificate Interest on such Class for such Distribution
                       Date;

                       second, to the Group 7 Senior Certificates, any Accrued
                       Certificate Interest thereon remaining undistributed from
                       previous Distribution Dates, to the extent of remaining
                       Group 7 Available Funds;

                       third, to the Group 7 Senior Certificates, in reduction
                       of the Current Principal Amount thereof, the Group 7
                       Optimal Principal Amount for such Distribution Date to
                       the extent of remaining Group 7 Available Funds, until
                       the Current Principal Amount of the Group 7 Senior
                       Certificates has been reduced to zero.

               (H) Except as provided in (I) and (J) below, on each Distribution
               Date prior to the Cross-Over Date, an amount equal to any
               remaining Group 1, Group 2, Group 3, Group 4, Group 5, Group 6
               and Group 7 Available Funds after the distributions in (A), (B),
               (C), (D), (E), (F) and (G) above will be distributed
               sequentially, in the 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 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, in each
               case, to the extent of remaining Available Funds.

               (I) On each Distribution Date prior to the Cross-Over Date, but
               after the reduction of the Current Principal Amount of the Group
               1, Group 2, Group 3, Group 4, Group 5, Group 6 or Group 7 Senior
               Certificates to zero, the remaining Class or

                                      -80-
<PAGE>



               Classes of Senior Certificates will be entitled to receive in
               reduction of their Current Principal Amounts, pro rata based upon
               their Current Principal Amounts immediately prior to such
               Distribution Date, in addition to any Principal Prepayments
               related to such remaining Senior Certificates' respective Loan
               Group allocated to such Group of Senior Certificates, 100% of the
               Principal Prepayments on any Mortgage Loan in the Loan Group
               relating to the fully repaid Class of Senior Certificates;
               provided, however, that if (A) the weighted average Subordinate
               Percentage equals or exceeds 7.00% on such Distribution Date and
               (B) the aggregate Scheduled Principal Balance of the Mortgage
               Loans 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%, then the
               additional allocation of Principal Prepayments to the Senior
               Certificates in accordance with this clause (I) will not be made.

               (J) If on any Distribution Date on which the aggregate Current
               Principal Amount of any Class or Classes of Senior Certificates
               would be greater than the aggregate Scheduled Principal Balance
               of the Mortgage Loans in its related Loan Group and any
               Subordinate Certificates are still outstanding in each case after
               giving effect to distributions to be made on such Distribution
               Date, (i) 100% of amounts otherwise allocable to the Subordinate
               Certificates in respect of principal will be distributed to such
               Class or Classes of Senior Certificates in reduction of the
               Current Principal Amounts thereof, until the aggregate Current
               Principal Amount of such Class or Classes of Senior Certificates
               is an amount equal to the aggregate Scheduled Principal Balance
               of the Mortgage Loans in its related Loan Group, and (ii) the
               Accrued Certificate Interest otherwise allocable to the
               Subordinate Certificates on such Distribution Date will be
               reduced, if necessary, and distributed to such Class or Classes
               of Senior Certificates in an amount equal to the Accrued
               Certificate Interest for such Distribution Date on the excess of
               (x) the aggregate Current Principal Balance of such Class or
               Classes of Senior Certificates over (y) the aggregate Scheduled
               Principal Balance of the Mortgage Loans in the related Loan
               Group. Any such reduction in the Accrued Certificate Interest on
               the Subordinate Certificates will be allocated in reverse order
               of the Subordinate Certificates numerical designations,
               commencing with the Class B-6 Certificates.

        (b) If, after distributions have been made pursuant to priorities first
and second of clauses (a)(i)(A), (B), (C), (D), (E), (F) and (G) above on any
Distribution Date, the remaining Group 1, Group 2, Group 3, Group 4, Group 5,
Group 6 or Group 7 Available Funds are less than the sum of the Group 1, Group
2, Group 3, Group 4, Group 5, Group 6 or Group 7 Senior Optimal Principal
Amounts such amount shall be reduced, and such remaining funds will be
distributed on the related Senior Certificates on the basis of such reduced
amount.

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

                                      -81-
<PAGE>

        (d) On each Distribution Date, any Available Funds remaining after
payment of interest and principal to the Classes of Certificates entitled
thereto, as described above, will be distributed to the Class R-II Certificates;
provided that if on any Distribution Date there are any Group 1, Group 2, Group
3, Group 4, Group 5, Group 6 or Group 7 Available Funds remaining after payment
of interest and principal to a Class or Classes of Certificates entitled
thereto, such amounts will be distributed to the other Classes of Senior
Certificates, pro rata, based upon their Current Principal Amounts, until all
amounts due to all Classes of Senior Certificates have been paid in full, before
any amounts are 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) 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:

               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;

                                      -82-
<PAGE>

               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, if such loss is on a Group 1, Group 2, Group 3, Group 4,
        Group 5, Group 6 or Group 7 Mortgage Loan, to the Group 1, Group 2,
        Group 3, Group 4, Group 5, Group 6 and Group 7 Senior Certificates,
        respectively.

               eighth, to the Senior Certificates, on a pro rata basis.

        (c) Notwithstanding the foregoing clause (b), 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 Securities Administrator shall
determine and notify the Trustee of the 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 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

                                      -83-
<PAGE>


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, based on information
provided to the Securities Administrator by the Master Servicer. The Securities
Administrator shall calculate the amount to be distributed to each Class and,
based on such amounts, the Securities Administrator shall determine the amount
to be distributed to each Certificateholder. All of the Securities
Administrator's calculations of payments shall be based solely on information
provided to the Securities Administrator by the Master Servicer. The Securities
Administrator 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 Securities Administrator shall make
available to the parties hereto and each Certificateholder via the Securities
Administrator'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, or in the case of each Class of Residual Certificates, an initial
Current Principal Amount of $50:

               (i) the Current Principal 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;

               (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;

                                      -84-
<PAGE>

               (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 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 Servicer 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 and (iv) 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 number and aggregate
        Outstanding Principal Balance of Mortgage Loans (a) delinquent 30 to 59
        days on a contractual basis, (b) delinquent 60 to 89 days on a
        contractual basis, and (c) delinquent 90 or more days on a contractual
        basis, in each case as of the close of business on the last Business Day
        of the immediately preceding month;

               (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;

                                      -85-
<PAGE>

               (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 Securities Administrator 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; and

               (xviii) the Average Loss Severity for the prior calendar month
        for each Loan Group; and

               (xix) the then applicable Group 1, Group 2, Group 3, Group 4,
        Group 5, Group 6 and Group 7 Senior Percentage, Group 1, Group 2, Group
        3, Group 4 , Group 5, Group 6 and Group 7 Senior Prepayment Percentage,
        Group 1, Class 2, Class 3, Group 4, Group 5, Group 6 and Group 7
        Subordinate Percentage and Group 1, Group 2, Group 3, Group 4, Group 5,
        Group 6 and Group 7 Subordinate Prepayment Percentage.

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

        The Securities Administrator may make available each month, to any
interested party , the monthly statement to Certificateholders via the
Securities Administrator's website initially located at "www.ctslink.com."
Assistance in using the website can be obtained by calling the Securities
Administrator'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 to
them via first class mail by calling the customer service desk and indicating
such. The Securities Administrator 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 Securities Administrator shall
provide timely and adequate notification to all parties regarding any such
change.

        (b) By April 30 of each year beginning in 2002, the Trustee will furnish
such 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 Securities Administrator may determine and advises
the Trustee 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

                                      -86-
<PAGE>

information shall be provided by the Securities Administrator or the Trustee
pursuant to the requirements of the Code.

        Section 6.05 MONTHLY ADVANCES. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date and is delinquent other than as a result
of application of the Relief Act and for which the related Servicer was required
to make an advance pursuant to the related Servicing Agreement exceeds the
amount deposited in the Master Servicer Collection Account which will be used
for an advance with respect to such Mortgage Loan, the Master Servicer will
deposit in the Master Servicer Collection Account not later than the
Distribution Account Deposit Date immediately preceding the related Distribution
Date an amount equal to such deficiency, net of the Servicing Fee for such
Mortgage Loan except to the extent the Master Servicer determines any such
advance to be nonrecoverable from Liquidation Proceeds, Insurance Proceeds or
future payments on the Mortgage Loan for which such Monthly Advance was made.
Subject to the foregoing, the Master Servicer shall continue to make such
advances through the date that the related Servicer is required to do so under
its Servicing Agreement. If applicable, on the Distribution Account Deposit
Date, the Master Servicer shall present an Officer's Certificate to the Trustee
(i) stating that the Master Servicer elects not to make a Monthly Advance in a
stated amount and (ii) detailing the reason it deems the advance to be
nonrecoverable.

        Section 6.06 SURETY BOND. (a) If a Required Surety Payment is payable
pursuant to the Surety Bond with respect to any Additional Collateral Mortgage
Loans, the related Servicer shall so notify the Trustee as soon as reasonably
practicable and the Trustee shall promptly complete the notice in the form of
Attachment 1 to the Surety Bond and shall promptly submit such notice to the
surety as a claim for a required surety. The related Servicer shall upon request
assist the Trustee in completing such notice and shall provide any information
requested by the Trustee in connection therewith.

        Upon receipt of a Required Surety Payment from the Surety on behalf of
the Certificateholders, the Trustee shall deposit such Required Surety Payment
in the Master Servicer Collection Account and shall distribute such Required
Surety Payment, or the proceeds thereof, in accordance with the provisions of
Section 6.01.

        The Trustee shall (i) receive as attorney-in-fact of each Holder of a
Certificate any Required Surety Payment from the surety and (ii) disburse the
same to the Holders of such Certificates as set forth in Section 6.01.

        Section 6.07 COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the lesser of (i) the
aggregate amounts required to be paid by the Servicers under the Servicing
Agreements with respect to subclause (b) of the definition of Interest Shortfall
with respect to the Mortgage Loans for the related Distribution Date, and not so
paid by the related Servicers and (ii) the Master Servicing Compensation for
such Distribution Date (such amount, the "Compensating Interest Payment"). The
Master Servicer shall not be entitled to any reimbursement of any Compensating
Interest Payment.


                                      -87-
<PAGE>

                                   ARTICLE VII

                               The Master Servicer

        Section 7.01 LIABILITIES OF THE MASTER SERVICER. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.

        Section 7.02   MERGER OR CONSOLIDATION OF THE MASTER SERVICER.

        (a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.

        (b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.

        Section 7.03 INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER AND THE
SECURITIES ADMINISTRATOR. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement or the Certificates (i)
related to the Master Servicer's failure to perform its duties in compliance
with this Agreement (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason of
the Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder, provided, in each case, that with respect to
any such claim or legal action (or pending or threatened claim or legal action),
the Trustee shall have given the Master Servicer and the Seller written notice
thereof promptly after the Trustee shall have with respect to such claim or
legal action knowledge thereof. This indemnity shall survive the resignation or
removal of the Trustee, Master Servicer or the Securities Administrator and the
termination of this Agreement.

        (b) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise referred to in
Subsection (a) above.



                                      -88-
<PAGE>


        Section 7.04 LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND OTHERS.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:

        (a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Seller, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.

        (b) The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.

        (c) The Master Servicer, the Custodian and any director, officer,
employee or agent of the Master Servicer or the Custodian shall be indemnified
by the Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer is indemnified by the Servicer
thereunder), other than (i) any such loss, liability or expense related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as applicable,
or by reason of reckless disregard of obligations and duties hereunder or under
the Custodial Agreement, as applicable.

        (d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably withheld),
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall
be entitled to be reimbursed therefor out of the Master Servicer Collection
Account as provided by Section 4.03. Nothing in this Subsection 7.04(d) shall
affect the Master Servicer's obligation to supervise, or to take such actions as
are necessary to ensure, the servicing and administration of the Mortgage Loans
pursuant to Subsection 3.01(a).

        (e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required

                                      -89-
<PAGE>




to investigate or make recommendations concerning potential liabilities which
the Trust might incur as a result of such course of action by reason of the
condition of the Mortgaged Properties but shall give notice to the Trustee if it
has notice of such potential liabilities.

        (f) The Master Servicer shall not be liable for any acts or omissions of
any Servicer, except as otherwise expressly provided herein.

        Section 7.05 MASTER SERVICER NOT TO RESIGN. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Independent Counsel to such effect delivered to the Trustee. No such resignation
by the Master Servicer shall become effective until EMC or the Trustee or a
successor to the Master Servicer reasonably satisfactory to the Trustee shall
have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 8.02 hereof. The Trustee shall notify the Rating
Agencies of the resignation of the Master Servicer.

        Section 7.06 SUCCESSOR MASTER SERVICER. In connection with the
appointment of any successor Master Servicer or the assumption of the duties of
the Master Servicer, EMC or the Trustee may make such arrangements for the
compensation of such successor master servicer out of payments on the Mortgage
Loans as EMC or the Trustee and such successor master servicer shall agree. If
the successor master servicer does not agree that such market value is a fair
price, such successor master servicer shall obtain two quotations of market
value from third parties actively engaged in the servicing of single-family
mortgage loans.

         Section 7.07 SALE AND ASSIGNMENT OF MASTER SERVICING. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement and EMC may terminate
the Master Servicer without cause and select a new Master Servicer; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation (a) shall be a Person which shall be qualified to service mortgage
loans for Fannie Mae or Freddie Mac; (b) shall have a net worth of not less than
$10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall be given prior written notice of the identity of the proposed successor to
the Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; (iii) the Master Servicer assigning and selling the
master servicing shall deliver to the Trustee an Officer's Certificate and an
Opinion of Independent Counsel, each stating that all conditions precedent to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement; and (iv) in the
event the Master Servicer is terminated without cause by EMC, EMC shall pay the
terminated Master Servicer a


                                      -90-
<PAGE>

termination fee equal to 0.25% of the aggregate Scheduled Principal Balance of
the Mortgage Loans at the time the master servicing of the Mortgage Loans is
transferred to the successor Master Servicer. No such assignment or delegation
shall affect any liability of the Master Servicer arising prior to the effective
date thereof.


                                      -91-
<PAGE>


                                  ARTICLE VIII

                                     Default

        Section 8.01 EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:

               (i) The Master Servicer fails to cause to be deposited in the
        Distribution Account any amount so required to be deposited pursuant to
        this Agreement, and such failure continues unremedied for a period of
        three Business Days after the date upon which written notice of such
        failure, requiring the same to be remedied, shall have been given to the
        Master Servicer; or

               (ii) The Master Servicer fails to observe or perform in any
        material respect any other material covenants and agreements set forth
        in this Agreement to be performed by it, which covenants and agreements
        materially affect the rights of Certificateholders, and such failure
        continues unremedied for a period of 60 days after the date on which
        written notice of such failure, properly requiring the same to be
        remedied, shall have been given to the Master Servicer by the Trustee or
        to the Master Servicer and the Trustee by the Holders of Certificates
        evidencing Fractional Undivided Interests aggregating not less than 25%
        of the Trust Fund; or

               (iii) There is entered against the Master Servicer a decree or
        order by a court or agency or supervisory authority having jurisdiction
        in the premises for the appointment of a conservator, receiver or
        liquidator in any insolvency, readjustment of debt, marshaling of assets
        and liabilities or similar proceedings, or for the winding up or
        liquidation of its affairs, and the continuance of any such decree or
        order is unstayed and in effect for a period of 60 consecutive days, or
        an involuntary case is commenced against the Master Servicer under any
        applicable insolvency or reorganization statute and the petition is not
        dismissed within 60 days after the commencement of the case; or

               (iv) The Master Servicer consents to the appointment of a
        conservator or receiver or liquidator in any insolvency, readjustment of
        debt, marshaling of assets and liabilities or similar proceedings of or
        relating to the Master Servicer or substantially all of its property; or
        the Master Servicer admits in writing its inability to pay its debts
        generally as they become due, files a petition to take advantage of any
        applicable insolvency or reorganization statute, makes an assignment for
        the benefit of its creditors, or voluntarily suspends payment of its
        obligations; or

               (v) The Master Servicer assigns or delegates its duties or rights
        under this Agreement in contravention of the provisions permitting such
        assignment or delegation under Sections 7.05 or 7.07.



                                      -92-
<PAGE>


In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of EMC, may terminate
all of the rights and obligations (but not the liabilities) of the Master
Servicer under this Agreement and in and to the Mortgage Loans and/or the REO
Property serviced by the Master Servicer and the proceeds thereof. Upon the
receipt by the Master Servicer of the written notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; and (ii) originals or copies
of all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder. In addition to any
other amounts which are then, or, notwithstanding the termination of its
activities under this Agreement, may become payable to the Master Servicer under
this Agreement, the Master Servicer shall be entitled to receive, out of any
amount received on account of a Mortgage Loan or related REO Property, that
portion of such payments which it would have received as reimbursement under
this Agreement if notice of termination had not been given. 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.

        Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein 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 hereof; provided, however, that EMC shall have the right to
either (a) immediately assume the duties of the Master Servicer or (b) select a
successor Master Servicer; provided further, however, that the Trustee 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, but subject to
Section 7.06, 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 permitted under this Agreement 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


                                      -93-
<PAGE>




court of competent jurisdiction to appoint, any established housing and home
finance institution which is a Fannie Mae- or Freddie Mac-approved servicer, and
with respect to a successor to the Master Servicer only, having a net worth of
not less than $10,000,000, as the successor to the Master Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Master Servicer hereunder; provided, that the Trustee shall obtain a
letter from each Rating Agency that the ratings, if any, on each of the
Certificates will not be lowered as a result of the selection of the successor
to the Master Servicer. 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
the provisions of Section 7.06 shall apply, 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, as shall
be necessary to effectuate any such succession.

        (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.


                                      -94-
<PAGE>



        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.


                                      -95-
<PAGE>



                                   ARTICLE IX

             Concerning the Trustee and the Securities Administrator

        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, and the Securities Administrator each undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement as duties of the Trustee and the Securities Administrator,
respectively. 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 and the Securities Administrator pursuant to any
provision of this Agreement, the Trustee and the Securities Administrator,
respectively, shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that neither the Trustee nor the
Securities Administrator shall 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 neither the
Trustee nor the Securities Administrator shall 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 Distribution Account as provided in Sections 6.01 and 10.01 herein based the
report of the Securities Administrator.

        (d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator 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 and the Securities
        Administrator shall be determined solely by the express provisions of
        this Agreement, neither the Trustee nor the Securities Administrator
        shall be liable except for the performance of their respective 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 or the Securities Administrator and, in the absence
        of bad faith on the part of the Trustee or the Securities Administrator,
        respectively, the Trustee or the Securities Administrator, respectively,
        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 or the Securities Administrator,
        respectively, and conforming to the requirements of this Agreement;

               (ii) Neither the Trustee nor the Securities Administrator shall
        be liable in its individual capacity for an error of judgment made in
        good faith by a Responsible Officer or

                                      -96-
<PAGE>

        Responsible Officers of the Trustee or an officer of the Securities
        Administrator, respectively, unless it shall be proved that the
        Trustee or the Securities Administrator, respectively, was negligent
        in ascertaining the pertinent facts;

               (iii) Neither the Trustee nor the Securities Administrator shall
        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 the Securities
        Administrator, respectively, or exercising any trust or other power
        conferred upon the Trustee or the Securities Administrator,
        respectively, 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 (except to the extent that the Trustee is obligor and has
        defaulted thereon);

               (vi) Anything in this Agreement to the contrary notwithstanding,
        in no event shall the Trustee or the Securities Administrator 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 or the Securities Administrator, respectively, has been advised
        of the likelihood of such loss or damage and regardless of the form of
        action; and

               (vii) None of the Securities Administrator, EMC or the Trustee
        shall be responsible for the acts or omissions of the other, it being
        understood that this Agreement shall not be construed to render them
        partners, joint venturers or agents of one another.

        Neither the Trustee nor the Securities Administrator shall 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 or the Securities Administrator 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 Master Servicer and the Trustee and
required to be deposited in the Master Servicer Collection Account or
Distribution Account pursuant to this Agreement will be promptly so deposited by
the Master Servicer and the Trustee.

                                      -97-
<PAGE>




        (f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any 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 AND THE SECURITIES
ADMINISTRATOR. Except as otherwise provided in Section 9.01:

               (i) The Trustee and the Securities Administrator may rely and
        shall be protected in acting or refraining from acting in reliance on
        any resolution, certificate of a Seller, Master Servicer or Servicer,
        certificate of auditors or any other certificate, statement, instrument,
        opinion, report, notice, request, consent, order, appraisal, bond or
        other paper or document believed by it to be genuine and to have been
        signed or presented by the proper party or parties;

               (ii) The Trustee and the Securities Administrator 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) Neither the Trustee nor the Securities Administrator shall
        be under any 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, neither the Trustee nor the Securities Administrator shall 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) Neither the Trustee nor the Securities Administrator shall 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

                                      -98-
<PAGE>

        that the payment within a reasonable time to the Trustee or the
        Securities Administrator, as applicable, 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 or the Securities
        Administrator, as applicable, reasonably assured to the Trustee or the
        Securities Administrator, as applicable, by the security afforded to
        it by the terms of this Agreement. The Trustee or the Securities
        Administrator 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 and the Securities Administrator 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. Neither the
        Trustee nor the Securities Administrator shall be liable or responsible
        for the misconduct or negligence of any of the Trustee's or the
        Securities Administrator's agents or attorneys or a custodian or paying
        agent appointed hereunder by the Trustee or the Securities Administrator
        with due care and, when required, with the consent of the Master
        Servicer;

               (vii) Should the Trustee or the Securities Administrator 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 or the Securities Administrator, respectively, may require prior
        to such action that it be provided by the Seller with reasonable further
        instructions;

               (viii) The right of the Trustee or the Securities Administrator
        to perform any discretionary act enumerated in this Agreement shall not
        be construed as a duty, and neither the Trustee nor the Securities
        Administrator shall be accountable for other than its negligence or
        willful misconduct in the performance of any such act;

               (ix) Neither the Trustee nor the Securities Administrator shall
        be required to give any bond or surety with respect to the execution of
        the trust created hereby or the powers granted hereunder, except as
        provided in Subsection 9.07; and

               (x) Neither the Trustee nor the Securities Administrator shall
        have any duty to conduct any affirmative investigation as to the
        occurrence of any condition requiring the repurchase of any Mortgage
        Loan by the Mortgage Loan Seller pursuant to this Agreement or the
        Mortgage Loan Purchase Agreement, as applicable, or the eligibility of
        any Mortgage Loan for purposes of this Agreement.


                                      -99-
<PAGE>

        Section 9.03 TRUSTEE AND SECURITIES ADMINISTRATOR 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 neither
the Trustee nor the Securities Administrator shall have any responsibility for
their correctness. Neither the Trustee nor the Securities Administrator makes
any 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.
Neither the Trustee or the Securities Administrator shall 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, neither the Trustee nor the Securities Administrator 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. Neither the
Trustee nor the Securities Administrator shall at any 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. Neither the Trustee nor the Securities Administrator shall have any
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
3.20.

        Section 9.04 TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES.
The Trustee and the Securities Administrator 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 or
the Securities Administrator, as applicable, and may otherwise deal with the
parties hereto.

        Section 9.05 TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND EXPENSES.
The fees and expenses of the Trustee and the Securities Administrator shall be
paid in accordance with a side letter agreement. In addition, the Trustee and
the Securities Administrator will be entitled to recover from the Master
Servicer Collection Account pursuant to Section 4.03(b) all reasonable
out-of-pocket expenses, disbursements and advances and the expenses of the
Trustee and the Securities Administrator, respectively, 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 or the Securities Administrator, respectively, 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 Master Servicer Collection Account are insufficient therefor, the Trustee


                                      -100-

<PAGE>



and the Securities Administrator 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 AND SECURITIES
ADMINISTRATOR. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator 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
the Trustee, rated "BBB" or higher by Fitch with respect to their long-term
rating and rated "BBB" or higher by Standard & Poor's and "Baa2" or higher by
Moody's with respect to any outstanding long-term unsecured unsubordinated debt,
and, in the case of a successor Trustee or successor Securities Administrator
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. 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 or the Securities Administrator shall cease to be
eligible in accordance with the provisions of this Section 9.06, the Trustee or
the Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.

        Section 9.07 INSURANCE. The Trustee and the Securities Administrator, at
their 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 or the Securities Administrator as to the Trustee's or the Securities
Administrator's, respectively, 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 AND SECURITIES
ADMINISTRATOR. (a) The Trustee and the Securities Administrator 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 resignation, the Seller shall promptly
appoint a successor Trustee or successor Securities Administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee or Securities Administrator,
as applicable, the successor Trustee or Securities Administrator, as applicable.
If no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator.

                                     -101-
<PAGE>

        (b) If at any time the Trustee or the Securities Administrator 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 or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Seller shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.

        (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 or the Securities Administrator and appoint a successor Trustee or
Securities Administrator 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 Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed.

        (d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
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 or Securities Administrator as provided in Section 9.09.

        Section 9.09 SUCCESSOR TRUSTEE AND SUCCESSOR SECURITIES ADMINISTRATOR.
(a) Any successor Trustee or Securities Administrator appointed as provided in
Section 9.08 shall execute, acknowledge and deliver to the Seller and to its
predecessor Trustee or Securities Administrator an instrument accepting such
appointment hereunder. The resignation or removal of the predecessor Trustee or
Securities Administrator shall then become effective and such successor Trustee
or Securities Administrator, 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 or
Securities Administrator herein. The predecessor Trustee or Securities
Administrator shall after payment of its outstanding fees and expenses promptly
deliver to the successor Trustee or Securities Administrator, as applicable, all
assets and records of the Trust held by it hereunder, and the Seller and the
predecessor Trustee or Securities Administrator, as applicable, 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 or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.

        (b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.


                                     -102-
<PAGE>




        (c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator 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 or Securities Administrator.

        Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator 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 or the Securities Administrator,
respectively, 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 or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, 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 cotrustee 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.

                                     -103-
<PAGE>

        (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 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 Securities Administrator shall maintain or cause the maintenance of the
books of each such REMIC on the accrual method of accounting.

         (b) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, 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 25% CPR). The
Securities Administrator will apply for an Employee Identification Number from
the IRS under Form SS-4 or any other acceptable method for all tax entities. In
connection with the foregoing, the Securities Administrator shall timely prepare
and file, and the Trustee shall sign, 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, 2001 and each calendar year thereafter)
in such manner as the Code or applicable Treasury regulations may prescribe, and
as described by the Securities Administrator. 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

                                     -104-
<PAGE>

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
Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator from acting as agent for the Tax
Matters Person, the Trustee and the Securities Administrator 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 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 Securities Administrator 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 Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, 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
and the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.

         (f) The Trustee and the Securities Administrator agree 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 and the Securities Administrator's covenants, respectively, set forth
in this Section 9.12; provided, however, such liability and obligation to
indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.

                                     -105-
<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, the Trustee, the Master Servicer and the
Securities Administrator 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 to,
        but not including, the first 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 to, but not including, the first 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;
        or

               (iii) the payment to Certificateholders of all amounts required
        to be paid to them pursuant to this Agreement.

        (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's, 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 Cut-off Date Balance or
(ii) the Seller, based upon an Opinion of Counsel, has determined that the REMIC
status of the REMIC I or REMIC II has been lost or that a substantial risk
exists that such REMIC

                                     -106-
<PAGE>

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 I
or REMIC II at any time, and upon such election, the Seller or its designee,
shall repurchase all the Mortgage Loans.

        (d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and 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
Distribution 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 REMIC I and REMIC II. Upon presentation and surrender of the
Certificates by the Certificateholders, the Trustee shall distribute to the
Certificateholders an amount determined as follows: with respect to each
Certificate (other than the Class R Certificates), the outstanding Current
Principal Amount, plus with respect to each Certificate (other than the Class R
Certificates), one month's interest thereon at the applicable Pass-Through Rate;
and with respect to the Class R Certificates, the percentage interest evidenced
thereby multiplied by the difference, if any, between the above described
repurchase price and the aggregate amount to be distributed to the Holders of
the Certificates (other than the Class R Certificates). If the proceeds with
respect to the Group I Mortgage Loans are not sufficient to pay all of the Group
I Certificates in full, any such deficiency will be allocated first, to the
Subordinate Certificates, in inverse order of their numerical designation, and
then to the Group 1 Senior Certificates on a pro rata basis. If the proceeds
with respect to the Group 2 Mortgage Loans are not sufficient to pay all of the
Group 2 Certificates in full, any such deficiency will be allocated first, to
the Subordinate Certificates, in inverse order of their numerical designation,
and then to the Group 2 Senior Certificates on a pro rata basis. If the proceeds
with respect to the Group 3 Mortgage Loans are not sufficient to pay all of the
Group 3 Certificates in full, any such deficiency will be allocated first, to
the Subordinate Certificates, in inverse order of their numerical designation,
and then to the Group 3 Senior Certificates on a pro rata basis. If the proceeds
with respect to the Group 4 Mortgage Loans are not sufficient to pay all of the
Group 4 Certificates in full, any such deficiency will be allocated first, to
the Subordinate Certificates, in inverse order of their numerical designation,
and then to the Group 4 Senior Certificates on a pro


                                     -107-
<PAGE>

rata basis. If the proceeds with respect to the Group 5 Mortgage Loans are not
sufficient to pay all of the Group 5 Certificates in full, any such deficiency
will be allocated first, to the Subordinate Certificates, in inverse order of
their numerical designation, and then to the Group 5 Senior Certificates on a
pro rata basis. If the proceeds with respect to the Group 6 Mortgage Loans are
not sufficient to pay all of the Group 6 Certificates in full, any such
deficiency will be allocated first, to the Subordinate Certificates, in inverse
order of their numerical designation, and then to the Group 6 Senior
Certificates on a pro rata basis. If the proceeds with respect to the Group 7
Mortgage Loans are not sufficient to pay all of the Group 7 Certificates in
full, any such deficiency will be allocated first, to the Subordinate
Certificates, in inverse order of their numerical designation, and then to the
Group 7 Senior Certificates on a pro rata basis. 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 the Mortgage Files for the
remaining applicable 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(g). Any other amounts remaining in the Accounts
will belong to the Seller. 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(g).

        (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 Distribution
Account all distributable amounts remaining in the Master Servicer Collection
Account. 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 Distribution
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 Master Servicer Collection Account and the Distribution 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(g).

        (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 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:


                                     -108-
<PAGE>


               (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 REMIC I and REMIC II in the case of a termination under
        Subsection 10.01(a)(i), or a plan of complete liquidation of REMIC I in
        the case of a termination under Subsection 10.01(c), provided to it by
        the Seller meeting the requirements of a "qualified liquidation" under
        Section 860F of the Code and any regulations thereunder.

               (ii) the Seller shall notify the Trustee at the commencement of
        such 90-day liquidation period and, at or prior to the time of making of
        the final payment on the Certificates, the Trustee shall sell or
        otherwise dispose of all of the remaining assets of the Trust Fund in
        accordance with the terms hereof; and

               (iii) at or after the time of adoption of such a plan of complete
        liquidation of any of REMIC I and REMIC II and at or prior to the final
        Distribution Date, the Trustee shall sell for cash all of the assets of
        the Trust to or at the direction of the Seller, and REMIC I and REMIC
        II, as applicable, 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.



                                     -109-
<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 EMC, the Seller, the Master Servicer, the Securities Administrator and
the Trustee, and the Servicing Agreements may be amended from time to time by
EMC, 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 or therein that may be defective or inconsistent with any
other provisions herein or therein, 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, addressed to the Trustee, adversely affect in
any material respect the interests of any Certificateholder.

        (b) This Agreement may also be amended from time to time by EMC, the
Master Servicer, the Seller, the Securities Administrator 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 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 Securities Administrator, 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


                                     -110-
<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 and the Securities Administrator may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's or the
Securities Administrator's own respective 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
Securities Administrator, 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

                                     -111-
<PAGE>

priority or preference over any other such Certificateholder, or to enforce any
right under this 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 Securities Administrator, 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 Securities Administrator, 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 Securities Administrator, 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 Securities Administrator, the
Seller, the Master


                                     -112-
<PAGE>



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
respect to such Certificates and that the pledgor is not an Affiliate of the
Trustee, the Securities Administrator, 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, or such other address as may hereafter
be furnished to the other parties hereto in writing; (iii) in the case of the
EMC, 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; (iv) in
the case of the Master Servicer or Securities Administrator, Wells Fargo Bank
Minnesota, National Association, 11000 Broken Land Parkway, Columbia, Maryland
21044 (Attention: BART 2001-8), facsimile no.: (410) 884-2360, or such other
address as may hereafter be furnished to the other parties hereto in writing; or
(v) in the case of the Rating Agencies, Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007, 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, the Securities Administrator 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.


                                     -113-
<PAGE>


        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.

        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, the
Trustee or the Securities Administrator;

        4.     The repurchase or substitution of Mortgage Loans;

        5.     The final payment to Certificateholders; and

        6.     Any change in the location of the Master Servicer Collection
Account or the Distribution Account.




                                     -114-
<PAGE>



        IN WITNESS WHEREOF, the Seller, the Trustee, the Master Servicer and the
Securities Administrator 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:


                                                BANK ONE, NATIONAL ASSOCIATION,
                                                as Trustee


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


                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Master
                                                Servicer


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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as
                                                Securities Administrator


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

                                                EMC MORTGAGE CORPORATION


                                                By:
                                                    ---------------------------


<PAGE>


                                                Name:
                                                Title:

Accepted and Agreed as to
Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c)
in its capacity as Mortgage Loan Seller

EMC MORTGAGE CORPORATION


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





<PAGE>



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

        On the 15th day of October, 2001 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 NEW YORK             )
                              ) ss.:
COUNTY OF NEW YORK            )

        On the 15th day of October, 2001 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
____________________ of Bank One, 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 15th day of October, 2001 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
____________________ of Bank One, 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 MARYLAND             )
                              ) ss.:
COUNTY OF                     )

        On the 15th day of October, 2001 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 MARYLAND             )
                              ) ss.:
COUNTY OF                     )

        On the 15th day of October, 2001 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 15th day of October, 2001 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]