Document:

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 May 1, 2002

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

                   Structured Asset Mortgage Investments Inc.
                       Mortgage Pass-Through Certificates

                                 Series 2002-AR2

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                                                  TABLE OF CONTENTS
                                                                                                                PAGE

                                                      ARTICLE I

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Definitions
Section 1.02.     Calculation of LIBOR............................................................................31

                                                     ARTICLE II

Conveyance of Mortgage Loans;
Original Issuance of Certificates
         Section  2.01.    Conveyance of Mortgage Loans to Trustee................................................32
         Section  2.02.    Acceptance of Mortgage Loans by Trustee................................................34
         Section  2.03.    Assignment of Interest in the Mortgage Loan Purchase Agreement.........................36
         Section  2.04.    Substitution of Mortgage Loans.........................................................37
         Section  2.05.    Issuance of Certificates...............................................................38
         Section  2.06.    Representations and Warranties Concerning the Seller...................................39

                                                     ARTICLE III

Administration and Servicing of Mortgage Loans
         Section  3.01.    Master Servicer........................................................................42
         Section  3.02.    REMIC-Related Covenants................................................................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...................................................48
         Section  3.15.    REO Property...........................................................................49
         Section  3.16.    Annual Officer's Certificate as to Compliance..........................................49
         Section  3.17.    Annual Independent Accountant's Servicing Report.......................................50

                                                     ARTICLE IV

Accounts
         Section  4.01.    Protected Accounts.....................................................................52
         Section  4.02.    Distribution Account...................................................................53

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         Section  4.03.    Permitted Withdrawals and Transfers from the Distribution Account......................54

                                                      ARTICLE V

Certificates
         Section  5.01.    Certificates...........................................................................59
         Section  5.02.    Registration of Transfer and Exchange of Certificates..................................67
         Section  5.03.    Mutilated, Destroyed, Lost or Stolen Certificates......................................70
         Section  5.04.    Persons Deemed Owners..................................................................71
         Section  5.05.    Transfer Restrictions on Residual Certificates.........................................71
         Section  5.06.    Restrictions on Transferability of Certificates........................................72
         Section  5.07.    ERISA Restrictions.....................................................................73
         Section  5.08.    Rule 144A Information..................................................................74

                                                     ARTICLE VI

Payments to Certificateholders
         Section  6.01.    Distributions on the Certificates......................................................75
         Section  6.02.    Allocation of Losses...................................................................78
         Section  6.03.    Payments...............................................................................80
         Section  6.04.    Statements to Certificateholders.......................................................80
         Section  6.05.    Monthly Advances.......................................................................83

                                                     ARTICLE VII

The Master Servicer
         Section  7.01.    Liabilities of the Master Servicer.....................................................84
         Section  7.02.    Merger or Consolidation of the Master Servicer.........................................84
         Section  7.03.    Indemnification of the Trustee, the Master Servicer and the
                           Securities Administrator...............................................................84
         Section  7.04.    Limitations on Liability of the Master Servicer and Others.............................85
         Section  7.05.    Master Servicer Not to Resign..........................................................86
         Section  7.06.    Successor Master Servicer..............................................................86
         Section  7.07.    Sale and Assignment of Master Servicing................................................86

                                                    ARTICLE VIII

Default
         Section  8.01.    "Event of Default......................................................................88
         Section  8.02.    Trustee to Act; Appointment of Successor...............................................89
         Section  8.03.    Notification to Certificateholders.....................................................90
         Section  8.04.    Waiver of Defaults.....................................................................90
         Section  8.05.    List of Certificateholders.............................................................91

                                                        -ii-

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                                                     ARTICLE IX

Concerning the Trustee and the Securities Administrator
         Section 9.01.     Duties of Trustee......................................................................92
         Section 9.02.     Certain Matters Affecting the Trustee and the Securities Administrator.................94
         Section 9.03.     Trustee and Securities Administrator Not Liable for Certificates or
                           Mortgage Loans.........................................................................95
         Section 9.04.     Trustee and Securities Administrator May Own Certificates..............................96
         Section 9.05.     Trustee's and Securities Administrator's Fees and Expenses.............................96
         Section 9.06.     Eligibility Requirements for Trustee and Securities Administrator......................96
         Section 9.07.     Insurance..............................................................................97
         Section 9.08.     Resignation and Removal of the Trustee and Securities Administrator....................97
         Section 9.09.     Successor Trustee and Successor Securities Administrator...............................98
         Section 9.10.     Merger or Consolidation of Trustee or Securities Administrator.........................99
         Section 9.11.     Appointment of Co-Trustee or Separate Trustee..........................................99
         Section 9.12.     Federal Information Returns and Reports to Certificateholders;
                           REMIC Administration..................................................................100

                                                      ARTICLE X

Termination

         Section 10.01.    Termination Upon Repurchase by the Seller or its Designee or
                           Liquidation of the Mortgage Loans.....................................................102
         Section 10.02.    Additional Termination Requirements...................................................104

                                                     ARTICLE XI

                                              Miscellaneous Provisions
         Section 11.01. Intent of Parties........................................................................106
         Section 11.02. Amendment................................................................................106
         Section 11.03. Recordation of Agreement.................................................................107
         Section 11.04. Limitation on Rights of Certificateholders...............................................107
         Section 11.05. Acts of Certificateholders...............................................................108
         Section 11.06. GOVERNING LAW............................................................................109
         Section 11.07. Notices..................................................................................109
         Section 11.08. Severability of Provisions...............................................................109
         Section 11.09. Successors and Assigns...................................................................109
         Section 11.10. Article and Section Headings.............................................................110
         Section 11.11. Counterparts.............................................................................110
         Section 11.12. Notice to Rating Agencies................................................................110
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                                    EXHIBITS

Exhibit A-1 - Form of Class A and Class X 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-11
- Servicing Agreements Exhibit I - Assignment Agreements Exhibit J - Mortgage
Loan Purchase Agreement Exhibit K - Subsequent Transfer Instrument

                                      -iv-

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                         POOLING AND SERVICING AGREEMENT

        Pooling and Servicing Agreement dated as of May 1, 2002, 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 has 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 Interests will be designated "regular
interests" in such REMIC and the Class R-II 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 IIII to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC III Regular Interests will be designated
"regular interests" in such REMIC and the Class R-III 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 IV to be treated for federal income tax purposes as a REMIC.
On the Startup Day, all the Classes of REMIC IV Regular Certificates will be
designated "regular interests" in such REMIC and the Class R-IV 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 $305,534,249. 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:

                                       -1-

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                                    ARTICLE I

                                   Definitions

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

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

        ACCRUED CERTIFICATE INTEREST: For any Certificate or for either
Component of the Class X Certificates for any Distribution Date, the interest
accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the Current Principal Amount (or Notional Amount) of such
Certificate or Component immediately prior to such Distribution Date, less (i)
in the case of a Senior Certificate or a Component of the Class X Certificates,
such Certificate's or Component's share of any Net Interest Shortfall from the
related Mortgage Loans and, after the Cross-Over Date, the interest portion of
any Realized Losses on the related Mortgage Loans, (ii) in the case of a Senior
Mezzanine Certificate, such Certificate's share of any Net Interest Shortfall
and the interest portion of any Realized Losses on the related Mortgage Loans,
and (iii) 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 related Mortgage Loans allocated thereto in accordance with Section 6.02(g).
Interest on the Certificates and the Components of the Class X Certificates
shall be calculated on the basis of a 360-day year consisting of twelve 30-day
months.

        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.

         ADJUSTABLE RATE CERTIFICATES: The Class A-1 Certificates, Class A-3
Certificates, Class B-1 Certificates, Class B-2 Certificates and Class B-3
Certificates.

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

        ALLIANCE: Alliance Mortgage Company.

        ALLOCABLE SHARE:  With respect to each Class of Senior Mezzanine and
Subordinate Certificates:

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

                                       -2-

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and the denominator of which is the aggregate Current Principal Amount of all
Classes of the Senior Mezzanine and Subordinate Certificates; and

        (b) as to any Distribution Date and amounts distributable pursuant to
clauses (ii), (iv) and (v) of the definition of Senior Mezzanine and Subordinate
Optimal Principal Amount,

                       (1) for any Distribution Date on which the Senior
                       Mezzanine Loss and Delinquency Test has been satisfied,
                       as to each Class of Senior Mezzanine and Subordinate
                       Certificates (other than the Senior Mezzanine
                       Certificates, or if the Current Principal Amount of the
                       Senior Mezzanine Certificates has been reduced to zero,
                       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 Senior Mezzanine and
                       Subordinate Certificates for which the related Class
                       Prepayment Distribution Trigger has been satisfied 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 Senior Mezzanine or
                       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)(1), to the extent
                       of such Class's remaining Allocable Share, shall be
                       distributed to the Senior Mezzanine Certificates, or if
                       the Current Principal Amount of the Senior Mezzanine
                       Certificates has been reduced to zero, the Class of
                       Subordinate Certificates having the lowest numerical
                       designation and to the Subordinate Certificates which
                       satisfy the related Class Prepayment Distribution Trigger
                       in reduction of their respective Current Principal
                       Amounts, for to the Senior Mezzanine Certificates and
                       then to the Subordinate Certificates in the order of
                       their numerical Class designations; and

                       (2) for any Distribution Date on which the Senior
                       Mezzanine Loss and Delinquency Test has not been
                       satisfied, as to the Senior Mezzanine Certificates, 100%,
                       and as to the Subordinate Certificates, 0%; provided that
                       if on a Distribution Date, the Current Principal Amount
                       of the Senior Mezzanine Certificates is reduced to zero,
                       any remaining amounts distributed pursuant to this clause
                       (b)(2) shall be distributed to the 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.

                                       -3-

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        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 Trustee
by either (i) an Opinion of Counsel reasonably acceptable to the Trustee
delivered to it by the Master Servicer or the Seller, or (ii) written notice
from the appropriate taxing authority as to the applicability of such state law.

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

         ASSIGNMENT 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: July 19, 2032, 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 and Group 2 Available Funds for such Distribution Date.

        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.

         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 in New York City or in the jurisdiction in which the
Trustee, the Master Servicer, the Servicer or Securities Administrator is
located are 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.

        CARRYOVER SHORTFALL: With respect to the Class A-1, Class A-3, Class
B-1, Class B-2 and Class B-3 Certificates and any Distribution Date for which
the Pass-Through Rate for such Certificates is equal to the weighted average of
the Net Rates on the related Mortgage Loans, the excess, if any, of (x) Accrued
Certificate Interest on the Class A-1, Class B-1, Class B-2 or Class B-3
Certificates, as

                                       -4-

<PAGE>

applicable, for such Distribution Date, using the lesser of (a) LIBOR plus the
related Margin, as calculated for such Distribution Date, and (b) the 11.00% per
annum, over (y) Accrued Certificate Interest on the Class A-1, Class A-3 Class
B-1, Class B-2 or Class B-3 Certificates, as applicable, for such Distribution
Date at the weighted average of the Net Rates on the related Mortgage Loans.

        CARRYOVER SHORTFALL AMOUNT: With respect to the Class A-1, Class A-3,
Class B-1, Class B-2 and Class B-3 Certificates and each Distribution Date, the
sum of (a) the aggregate amount of Carryover Shortfall for such Class on such
Distribution Date which is not covered on such Distribution Date by interest
distributions otherwise payable to the related Component of the Class X
Certificates plus (b) any Carryover Shortfall Amount for such Class remaining
unpaid from the preceding Distribution Date, plus (c) one month's interest on
the amount in clause (b) (based on the number of days in the preceding Interest
Accrual Period) at a rate equal to the lesser of (i) LIBOR plus the related
Margin for such Distribution Date and (ii) 11.00% per annum.

        CARRYOVER SHORTFALL RESERVE FUND: An "outside reserve fund" within the
meaning of Treasury regulation Section 1.860G-2(h), which is not an asset of any
REMIC, ownership of which is evidenced by the Class X Certificates, and which is
established and maintained pursuant to Section 4.08.

        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 and Group 2 Senior
Certificates, as applicable, and the Senior Mezzanine Certificates 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.

        CERTIFICATEHOLDER: A Holder of a Certificate.

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

        CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Senior Mezzanine
or 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 Senior Mezzanine or 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, Class R-II, Class R-III and Class
R-IV Certificates.

                                       -5-

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        CLOSING DATE: May 31, 2002.

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

        COMPENSATING INTEREST PAYMENT: As defined in Section 6.06.

        COMPONENT: With respect to the Class X Certificates, Component X-1 or
Component X-2.

        COMPONENT X-1: Component X-1 of the Class X Certificates.

        COMPONENT X-2: Component X-2 of the Class X Certificates.

        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 Senior Mezzanine Certificates and Subordinate
Certificates has been reduced to zero (after giving effect to all distributions
on such Distribution Date).

        CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other than an
Interest Only Certificate) as of any Distribution Date, the initial principal
amount of such Certificate, as 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, (iii) in the case of a Senior Mezzanine Certificate, such
Certificate's PRO RATA share, if any, of the applicable Senior Mezzanine
Certificate Writedown Amount for previous Distribution Dates and (iv) in the
case of a Subordinate Certificate, such Certificate's PRO RATA share, if any, of
the applicable Subordinate Certificate Writedown Amount for previous
Distribution Dates. With respect to any Class of Certificates (other than the
Interest Only 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, Class R-II,
Class R-III and Class R-IV Certificates after the Distribution Date on which
they each receive the distribution of the last dollar of their respective
original principal amount shall be deemed to have Current Principal Amounts
equal to their respective Current Principal Amounts on the day immediately
preceding such Distribution Date.

        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: May 1, 2002.

                                       -6-

<PAGE>

        CUT-OFF DATE BALANCE: $305,534,249.

        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 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 4.01, which shall be denominated "Bank One,
National Association, as Trustee f/b/o holders

                                       -7-

<PAGE>

of Structured Asset Mortgage Investments Inc., Mortgage Pass-Through
Certificates, Series 2002- AR2 - Distribution Account."

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

        DISTRIBUTION DATE: The 19th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 19th 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 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.

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

        FDIC: Federal Deposit Insurance Corporation or any successor thereto.

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

        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,
(ii) an Interest Only Certificate will be deemed to equal 1.0% multiplied by a
fraction, the numerator of which is the Notional Amount of such Certificate and
the denominator of which is the aggregate Notional Amount of such respective
Class and (iii) a Certificate of any other Class will be deemed to equal 98.00%
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.

                                       -8-

<PAGE>

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

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

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

        GROUP 1 ALLOCATION FRACTION: A fraction equal to (x) to the excess of
(a) the aggregate Stated Principal Balance of the Group 1 Mortgage Loans (b)
over the Current Principal Amount of the Class A-1 Certificates over (y) the
excess of (a) the aggregate Stated Principal Balance of the Mortgage Loans over
(b) the aggregate Current Principal Amount of the Class A-1 Certificates and
Class A-2 Certificates.

        GROUP 2 ALLOCATION FRACTION: A fraction equal to (x) to the excess of
(a) the aggregate Stated Principal Balance of the Group 2 Mortgage Loans (b)
over the Current Principal Amount of the Class A-2 Certificates over (y) the
excess of (a) the aggregate Stated Principal Balance of the Mortgage Loans over
(b) the aggregate Current Principal Amount of the Class A-1 Certificates and
Class A-2 Certificates.

        GROUP 1 AVAILABLE FUNDS OR GROUP 2 AVAILABLE FUNDS: With respect to any
Distribution Date, an amount equal to the aggregate of the following amounts
with respect to the Mortgage Loans in the related Loan Group: (a) all previously
undistributed payments on account of principal (including the principal portion
of Scheduled Payments, Principal Prepayments and the principal amount of
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 Servicer or the Master Servicer with respect to such Distribution Date,
(c) any other miscellaneous amounts remitted by the Master Servicer or the
Servicer pursuant to the Servicing Agreements, (d) any amounts deposited into
the Distribution Account from the Pre-Funding Account and the Interest Coverage
Account pursuant to Sections 4.04 and 4.05 of this Agreement, and (e) 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;

                                       -9-

<PAGE>

               (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
          Distribution Account and amounts permitted to be withdrawn from the
          Distribution Account pursuant to the related Servicing Agreement or
          the Agreement;

               (vii) to pay the Master Servicing Compensation and Servicing Fees
          or to reimburse the 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) to pay to the Securities Administrator any amounts as are
          due under the Agreement, and have not been retained by or paid to the
          Securities Administrator.

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

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

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

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

               (ii) the applicable Senior Prepayment Percentage of all Principal
        Prepayments in part received during the related Prepayment Period with
        respect to each Mortgage Loan in the related Loan Group;

                                      -10-

<PAGE>

               (iii) 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;

               (iv) the lesser of (a) the applicable Senior Prepayment
        Percentage of (A) 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 (other than Mortgage Loans described in the immediately following
        clause (B)) and (B) the Scheduled Principal Balance of each Mortgage
        Loan in the related Loan Group purchased by an insurer from the Trustee
        during the related Prepayment Period pursuant to the related Primary
        Mortgage Insurance Policy; and (b) the applicable Senior Percentage of
        the Scheduled Principal Balance of each Mortgage Loan in the related
        Loan Group which became a Liquidated Mortgage Loan during the related
        Prepayment Period; and

               (v) 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, 92.75%. 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, 92.75%. 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 1 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date occurring
during the periods set forth below, as follows:

Period (dates inclusive)      Group 1 Senior Prepayment Percentage
----------------------------  -------------------------------------------------
June 19, 2002 - May 19, 2012  100%
June 19, 2012 - May 19, 2013  Group 1 Senior Percentage plus 70% of the Senior
                              Mezzanine and Subordinate Percentage
June 19, 2013 - May 19, 2014  Group 1 Senior Percentage plus 60% of the Senior
                              Mezzanine and Subordinate Percentage
June 19, 2014 - May 19, 2015  Group 1 Senior Percentage plus 40% of the Senior
                              Mezzanine and Subordinate Percentage

                                      -11-

<PAGE>

June 19, 2015 - May 19, 2016  Group 1 Senior Percentage plus 20% of the Senior
                              Mezzanine and Subordinate Percentage
June 19, 2016 and thereafter  Group 1 Senior Percentage

        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, (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 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 Current Principal Amount of
the Senior Mezzanine and Subordinate Certificates does not exceed 50%; and (B)
cumulative Realized Losses on the Mortgage Loans do not exceed (a) 30% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including June 2012 and May 2013, (b) 35% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including June 2013 and May 2014, (c) 40% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including June 2014 and May 2015, (d) 45% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including June 2015 and May 2016, and (e) 50% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs during or after June 19, 2016.

        In addition, if the current weighted average Senior Mezzanine and
Subordinate Percentage is equal to or greater than two times the initial
weighted average Senior Mezzanine and 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 aggregate Current Principal Amount of the Senior
Mezzanine and Subordinate Certificates does not exceed 50% and (b)(i) prior to
the Distribution Date in June 2005, cumulative Realized Losses on the Mortgage
Loans do not exceed 20% of the Original Senior Mezzanine and Subordinate
Principal Balance and (ii) on or after the Distribution Date in June 2005
cumulative Realized Losses on the Mortgage Loans do not exceed 30% of the
Original Senior Mezzanine and 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 Senior Mezzanine and Subordinate Percentage for the Certificates is
equal to or greater than two times the initial weighted average Senior Mezzanine
and Subordinate Percentage for the Certificates prior to June 19, 2005 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.

                                      -12-

<PAGE>

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

Period (dates inclusive)      Group 2 Senior Prepayment Percentage
----------------------------  ----------------------------------------------
June 19, 2002 - May 19, 2012  100%
June 19, 2012 - May 19, 2013  Group 2 Senior Percentage plus 70% of the
                              Senior Mezzanine and Subordinate Percentage
June 19, 2013 - May 19, 2014  Group 2 Senior Percentage plus 60% of the
                              Senior Mezzanine and Subordinate Percentage
June 19, 2014 - May 19, 2015  Group 2 Senior Percentage plus 40% of the
                              Senior Mezzanine and Subordinate Percentage
June 19, 2015 - May 19, 2016  Group 2 Senior Percentage plus 20% of the
                              Senior Mezzanine and Subordinate Percentage
June 19, 2016 and thereafter  Senior Mezzanine and Senior Percentage

        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, (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 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 Current Principal Amount of
the Senior Mezzanine and Subordinate Certificates does not exceed 50%; and (B)
cumulative Realized Losses on the Mortgage Loans do not exceed (a) 30% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including June 2012 and May 2013, (b) 35% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including June 2013 and May 2014, (c) 40% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including June 2014 and May 2015, (d) 45% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including June 2015 and May 2016, and (e) 50% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs during or after June 19, 2016.

        In addition, if the current weighted average Senior Mezzanine and
Subordinate Percentage is equal to or greater than two times the initial
weighted average Senior Mezzanine and 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 aggregate Current Principal Amount of the Senior
Mezzanine and Subordinate Certificates does not exceed 50% and (b)(i) prior to
the Distribution Date in June 2005 cumulative Realized Losses on the Mortgage
Loans do not exceed 20% of the Original Senior Mezzanine and Subordinate
Principal Balance and (ii) on or after the Distribution Date in June 2005
cumulative Realized Losses on the Mortgage Loans do not exceed 30% of the
Original Senior Mezzanine and 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 Senior Mezzanine and

                                      -13-

<PAGE>

Subordinate Percentage for the Certificates is equal to or greater than two
times the initial weighted average Subordinate Percentage for the Certificates
prior to June 19, 2005 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 Senior Mezzanine and 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 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 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%.

        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.

        HOMEBANC: HomeBanc Mortgage Corporation.

        HOMEBANC LOANS: Such Mortgage Loans that were purchased by EMC from
HomeBanc on a servicing retained basis.

        INDEMNIFIED PERSONS: The Trustee, the Master Servicer and the Securities
Administrator and and its officers, directors, agents and employees and any
separate co-trustee and its officers, directors, agents and employees.

                                      -14-

<PAGE>

        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.

        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 (other than the Adjustable Rate Certificates), the
calendar month preceding the month in which such Distribution Date occurs. With
respect to each Distribution Date and the Adjustable Rate Certificates, the
period commencing on the 19th day of the preceding calendar month (or in the
case of the first Distribution Date, the Closing Date), to the 18th of the month
of that Distribution Date.

        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 COVERAGE ACCOUNT: The account established and maintained
pursuant to Section 4.07.

        INTEREST COVERAGE AMOUNT: The amount to be paid by the Seller to the
Trustee for deposit in the Interest Coverage Account on the Closing Date
pursuant to Section 4.07, which amount is $102,471.

        INTEREST DETERMINATION DATE: With respect to each Distribution Date, the
second LIBOR Business Day immediately preceding the commencement of the related
Interest Accrual Period.

                                      -15-

<PAGE>

        INTEREST ONLY CERTIFICATES: Class X Certificates.

        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.

        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.

        LIBOR: With respect to any Distribution Date, the arithmetic mean of the
London interbank offered rate quotations for one-month U.S. Dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.02.

        LIBOR BUSINESS DAY: Any day other than (i) a Saturday or Sunday or (ii)
a day on which banking institutions in London, England and New York City are
required or authorized to by law to be closed.

        LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
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.

                                      -16-

<PAGE>

        LIQUIDATION DATE: With respect to any Liquidated Mortgage Loan, the date
on which the Master Servicer or the 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 Servicer, such expenses including (a) property protection
expenses, (b) property sales expenses, (c) foreclosure and sale costs, including
court costs and reasonable attorneys' fees, and (d) similar expenses reasonably
paid or incurred in connection with liquidation.

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

        LOAN GROUP: Loan Group 1 or Loan Group 2, 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-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.

        MARGIN: With respect to the Class A-1 Certificates, initially 0.35% per
annum, and starting on the first Distribution Date after the first possible
Optional Termination Date and thereafter, 0.70% per annum. With respect to the
Class A-3 Certificates, initially 0.50% per annum, and starting on the first
Distribution Date after the first possible Optional Termination Date and
thereafter, 0.75% per annum. With respect to the Class B-1 Certificates,
initially 0.70% per annum, and starting on the first Distribution Date after the
first possible Optional Termination Date and thereafter, 1.05% per annum. With
respect to the Class B-2 Certificates and Class B-3 Certificates, initially
1.00% per annum, and starting on the first Distribution Date after the first
possible Optional Termination Date and thereafter, 1.50% per annum. With respect
to REMIC III Regular Interests A-1, A-3, B-1, B-2 and B-3, the Margin applicable
to the Class of Certificates with the same designation.

        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 this Agreement.

        MASTER SERVICING COMPENSATION: The meaning specified in Section 3.14.

                                      -17-

<PAGE>

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

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

        MONTHLY ADVANCE: An advance of principal or interest required to be made
by the 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.

        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 May 31, 2002, between EMC, as seller, and Structured Asset Mortgage
Investments Inc., as purchaser, and all amendments thereof and supplements
thereto, attached hereto 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.

                                      -18-

<PAGE>

        NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
by the Servicer or the Master Servicer in accordance with the related Servicing
Agreement or this Agreement and (ii) unreimbursed advances by the 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 related Servicing Fee 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 Servicer and (ii) which, in the good faith
judgment of the Master Servicer, the Trustee or the 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 Servicer from Liquidation Proceeds, Insurance Proceeds or future payments on
the Mortgage Loan for which such advance or Monthly Advance was made.

        NOTIONAL AMOUNT: The Notional Amount of the Class X Certificates is
equal to the sum of the Notional Amounts of Component X-1 and Component X-2. On
any Distribution Date, the Notional Amount of Component X-1 and Component X-2 is
equal to the Current Principal Amount of the Class I-A Certificates and the
Offered Subordinate Certificates, respectively, immediately preceding that
Distribution Date; for federal income tax purposes, the equivalent of the
foregoing, expressed as the current principal balance of REMIC III Regular
Interests A-1 and REMIC III Regular Interests A-3, B-1, B-2 and B-3,
respectively immediately preceding that distribution date.

        OFFERED CERTIFICATE: Any Senior Certificate, Senior Mezzanine
Certificate or Offered Subordinate Certificate.

        OFFERED SUBORDINATE CERTIFICATES: The Class B-1, Class B-2 and Class B-3
Certificates.

        OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer 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.

        OPTIONAL TERMINATION DATE: Any Distribution Date on or after which the
Scheduled Principal Balance (before giving effect to distributions to be made on
such Distribution Date) of the Mortgage Loans is less than 10% of the sum of (i)
of the Cut-off Date Balance and (ii) the Pre-Funded Amount.

        ORIGINAL SENIOR MEZZANINE AND SUBORDINATE PRINCIPAL BALANCE: The
aggregate Current Principal Amount of the Senior Mezzanine and Subordinate
Certificates as of the Closing Date.

                                      -19-

<PAGE>

        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 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

                                      -20-

<PAGE>

        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.

        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.

        PRE-FUNDING ACCOUNT: The account established and maintained pursuant to
Section 4.06.

                                      -21-

<PAGE>

        PRE-FUNDED AMOUNT: The amount deposited by the Trustee in the
Pre-Funding Account on the Closing Date, which amount is $50,413,930.

        PRE-FUNDING PERIOD: The period from the Closing Date until the earliest
of (i) the date on which the amount on deposit in the Pre-Funding Account
(exclusive of investment income) is reduced to zero or (ii) June 30, 2002.

        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 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.

                                      -22-

<PAGE>

        RECORD DATE: With respect to each Distribution Date and each Class of
Certificates (other than the Adjustable Rate Certificates), the close of
business on the last Business Day of the month next preceding the month in which
the related Distribution Date occurs. With respect to each Distribution Date and
the Adjustable Rate Certificates, the 18th day of 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 Protected Accounts, (iii)
any REO Property relating to the Mortgage Loans, (iv) the rights with respect to
the related Servicing Agreements, (v) the rights with respect to the Assignment
Agreements, (v) such funds or assets as from time to time are deposited in the
Distribution Account and belonging to the Trust Fund (exclusive of the
Pre-Funding Account, the Interest Coverage Account and the Carryover Shortfall
Reserve Fund) 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 II: That group of assets contained in the Trust Fund designated as
a REMIC consisting of the REMIC I Regular Interests.

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

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

        REMIC II SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each of the REMIC II 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; and

(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.

                                      -23-

<PAGE>

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

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

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

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

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

        REMIC IV 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, REMIC II, REMIC III or REMIC IV 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 or Section
3.06 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, Servicing Fee, 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.

                                      -24-

<PAGE>

        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 & 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 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

                                      -25-

<PAGE>

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.

        SENIOR CERTIFICATES: The Group 1 Senior Certificates, Group 2 Senior
Certificates, Interest Only Certificates and the Residual Certificates.

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

                                      -26-

<PAGE>

        SENIOR MEZZANINE CERTIFICATES: The Class A-3 Certificates.

        SENIOR MEZZANINE CERTIFICATE WRITEDOWN AMOUNT: As to any Distribution
Date on or after which the aggregate Current Principal Amount of the Subordinate
Certificates has been reduced to zero, 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 Balance of the
Mortgage Loans on the Due Date related to such Distribution Date.

        SENIOR MEZZANINE LOSS AND DELINQUENCY TEST: On any Distribution Date,
the Senior Mezzanine Loss and Delinquency Test is satisfied if, as of the last
day of the month preceding such Distribution Date, (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 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 Current
Principal Amount of the Senior Mezzanine and Subordinate Certificates does not
exceed 100%; and (B) cumulative Realized Losses on the Mortgage Loans do not
exceed (a) 30% of the Original Senior Mezzanine and Subordinate Principal
Balance if such Distribution Date occurs between and including June 2012 and May
2013, (b) 35% of the Original Senior Mezzanine and Subordinate Principal Balance
if such Distribution Date occurs between and including June 2013 and May 2014,
(c) 40% of the Original Senior Mezzanine and Subordinate Principal Balance if
such Distribution Date occurs between and including June 2014 and May 2015, (d)
45% of the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including June 2015 and May 2016, and (e)
50% of the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs during or after June 19, 2016.

        SENIOR MEZZANINE AND 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 Senior Mezzanine and Subordinate Certificates immediately prior to such
Distribution Date):

               (i) the applicable Senior Mezzanine and Subordinate Percentage of
        the principal portion of all Monthly Payments 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 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 Senior Mezzanine and 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;

                                      -27-

<PAGE>

               (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 and Group 2 Senior Optimal Principal
        Amount;

               (iv) the applicable Senior Mezzanine and 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 or Group 2 Senior
        Certificates have all been reduced to zero, 100% of any Group 1 Senior
        Optimal Principal Amount or Group 2 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.

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

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

        SERVICER REMITTANCE DATE: With respect to each Mortgage Loan, the 18th
day of each month, or if such day is not a Business Day, the preceding Business
Day.

        SERVICING AGREEMENTS: Those certain eleven Servicing Agreements, dated
January 1, 2002, January 1, 2002, March 1, 2002, April 1, 2002, April 1, 2002,
May 1, 2002, May 15, 2002, February 1, 2002, April 1, 2002, May 1, 2002 and June
1, 2002, attached hereto as Exhibits H-1 through H-11 between Alliance Mortgage
Corporation as servicer and EMC as owner.

        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.

        SOUTHSTAR: SouthStar Funding LLC or an affiliate thereof.

        SOUTHSTAR LOANS: Such Mortgage Loans that were purchased by EMC from
SouthStar on a servicing retained basis.

        SOUTHSTAR UNDERWRITING GUIDELINES: The underwriting guidelines
established by SouthStar and in accordance with which the SouthStar loans were
originated.

                                      -28-

<PAGE>

        STARTUP DAY: May 31, 2002.

        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 PERCENTAGE: The Group 1 or Group 2 Subordinate Percentage,
with respect to a Group 1 or Group 2 Mortgage Loan, respectively.

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

        SUBSEQUENT CUT-OFF DATE: With respect to those Subsequent Mortgage Loans
sold to the Trust Fund pursuant to a Subsequent Transfer Instrument, the later
of (i) first day of the month in which the related Subsequent Transfer Date
occurs or (ii) the date of origination of such Mortgage Loan.

        SUBSEQUENT MORTGAGE LOANS: The Mortgage Loans which will be acquired by
the trust during the Pre-Funding Period with amounts on deposit in the
Pre-Funding Account.

        SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT: The agreement between EMC,
as seller, and Structured Asset Mortgage Investments Inc., as purchaser, and all
amendments thereof and supplements thereto, regarding the transfer of the
Subsequent Mortgage Loans by EMC to Structured Asset Mortgage Investments Inc..

        SUBSEQUENT TRANSFER DATE: With respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Mortgage Loans are sold to
the Trust Fund.

        SUBSEQUENT TRANSFER INSTRUMENT: Each Subsequent Transfer Instrument,
dated as of a Subsequent Transfer Date, executed by the Trustee at the written
direction of the Seller substantially in the form attached hereto as Exhibit K,
by which Subsequent Mortgage Loans are transferred to the Trust Fund.

        SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee
pursuant to the 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

                                      -29-

<PAGE>

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

        TAX ADMINISTRATION AND TAX MATTERS PERSON: The 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, HomeBanc and
SouthStar, 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 to 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 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.

                                      -30-

<PAGE>

        Section 1.02.  CALCULATION OF LIBOR.

        LIBOR applicable to the calculation of the Pass-Through Rate on the
Adjustable Rate Certificates for any Interest Accrual Period will be determined
on each Interest Determination Date. On each Interest Determination Date, LIBOR
shall be established by the Securities Administrator and, as to any Interest
Accrual Period, will equal the rate for one month United States dollar deposits
that appears on the Telerate Screen Page 3750 as of 11:00 a.m., London time, on
such Interest Determination Date. "Telerate Screen Page 3750" means the display
designated as page 3750 on the Telerate Service (or such other page as may
replace page 3750 on that service for the purpose of displaying London interbank
offered rates of major banks). If such rate does not appear on such page (or
such other page as may replace that page on that service, or if such service is
no longer offered, LIBOR shall be so established by use of such other service
for displaying LIBOR or comparable rates as may be reasonably selected by the
Securities Administrator), the rate will be the Reference Bank Rate. The
"Reference Bank Rate" will be determined on the basis of the rates at which
deposits in U.S. Dollars are offered by the reference banks (which shall be any
three major banks that are engaged in transactions in the London interbank
market, selected by the Securities Administrator) as of 11:00 a.m., London time,
on the Interest Determination Date to prime banks in the London interbank market
for a period of one month in amounts approximately equal to the aggregate
Current Principal Amount of the Adjustable Rate Certificates then outstanding.
The Securities Administrator will request the principal London office of each of
the reference banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the quotations
rounded up to the nearest whole multiple of 0.03125%. If on such date fewer than
two quotations are provided as requested, the rate will be the arithmetic mean
of the rates quoted by one or more major banks in New York City, selected by the
Securities Administrator, as of 11:00 a.m., New York City time, on such date for
loans in U.S. Dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Current Principal Amount of the
Adjustable Rate Certificates then outstanding. If no such quotations can be
obtained, the rate will be LIBOR for the prior Distribution Date; PROVIDED
HOWEVER, if, under the priorities described above, LIBOR for a Distribution Date
would be based on LIBOR for the previous Distribution Date for the third
consecutive Distribution Date, the Securities Administrator shall select an
alternative comparable index (over which the Securities Administrator e has no
control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
The establishment of LIBOR by the Securities Administrator on any Interest
Determination Date and the Securities Administrator's subsequent calculation of
the Pass- Through Rate applicable to the Adjustable Rate Certificates for the
relevant Interest Accrual Period, in the absence of manifest error, will be
final and binding. Promptly following each Interest Determination Date the
Securities Administrator shall supply the Master Servicer with the results of
its determination of LIBOR on such date. Furthermore, the Securities
Administrator will supply to any Certificateholder so calling the Securities
Administrator at (301) 815-6600 and requesting the Pass-Through Rate on the
Adjustable Rate Certificates for the current and the immediately preceding
Interest Accrual Period.

                                      -31-

<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 or Subsequent Cut-off Date, as applicable, but excluding
any payments of principal and interest due on or prior to the Cut-off Date or
Subsequent Cut-off Date, as applicable; (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 Distribution Account, (iii) such assets relating to the Mortgage Loans as
from time to time may be held by the Servicer in Protected Accounts 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 Agreement 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, as described
in the Mortgage Loan Purchase Agreement, with respect to each Mortgage Loan, and
as described in the Subsequent Mortgage Loan Purchase Agreement, with respect to
each Subsequent 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 a lost note affidavit with indemnity, (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 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

                                      -32-

<PAGE>

or commitment or binder for title insurance and (vii) originals of all
modification agreements, if applicable and available;

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 Distribution
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 to the Trustee (with a copy to the
Custodian) which states that recordation of such Security Instrument is not
required to protect the interests of the Certificateholders in the related
Mortgage Loans. 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.

                                      -33-

<PAGE>

        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, with
respect to the Mortgage Loans, or the Subsequent Transfer Date, with respect to
the Subsequent Mortgage Loans, the Custodian, 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 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, within 90 days of the Subsequent
Transfer Date, with respect to the Subsequent Mortgage Loans, 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 (or the Subsequent Mortgage
Loan Purchase Agreement, with respect to the Subsequent Mortgage Loans), 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

                                      -34-

<PAGE>

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 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)(vii) 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 (or the Subsequent Mortgage Loan Purchase
Agreement, with respect to the Subsequent Mortgage Loans), 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 Trustee the Repurchase Price for deposit in the
Distribution Account and the Mortgage Loan Seller shall provide to the Master
Servicer and the Trustee written notification detailing the components of the
Repurchase Price. Upon deposit of the Repurchase Price in the Distribution
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

                                      -35-

<PAGE>

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.

        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 (or the Subsequent Mortgage Loan Purchase Agreement, with
respect to the Subsequent Mortgage Loans), 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 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 (or the Subsequent Mortgage Loan Purchase Agreement,
with respect to the Subsequent Mortgage Loans), 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 the Subsequent
Mortgage Loan Purchase Agreement, with respect to the Subsequent Mortgage Loans)
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 the
Mortgage Loan Purchase Agreement (or the Subsequent Mortgage Loan Purchase
Agreement, with respect to the Subsequent Mortgage Loans) 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 Trustee for deposit in
the Distribution Account and written notification detailing the components of
such Repurchase Price to the Trustee and the Master Servicer. 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,

                                      -36-

<PAGE>

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.

        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 the Subsequent Mortgage
Loan Purchase Agreement, with respect to the Subsequent Mortgage Loans) 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 the Subsequent Mortgage Loan
Purchase Agreement, with respect to the Subsequent Mortgage Loans) 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

                                      -37-

<PAGE>

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 the Subsequent Mortgage Loan Purchase Agreement, with respect to
the Subsequent Mortgage Loans) 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 the Subsequent Mortgage Loan Purchase
Agreement, with respect to the Subsequent Mortgage Loans) 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 Loan Purchase Agreement (or the Subsequent Mortgage Loan
Purchase Agreement, with respect to the Subsequent Mortgage Loans) 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 Interests.

        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 II Regular Interests and the other assets of REMIC III for the benefit of
the holders of the REMIC III Interests. The Trustee acknowledges receipt of the
REMIC II Regular Interests (which are uncertificated) and the other assets of
REMIC III and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the holders of the REMIC III Interests.

                                      -38-

<PAGE>

        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 III Regular Interests and the other assets of REMIC IV for the benefit of
the holders of the REMIC IV Certificates. The Trustee acknowledges receipt of
the REMIC III Regular Interests (which are uncertificated) and the other assets
of REMIC IV and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the holders of the REMIC IV 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 Seller's ability to enter into this Agreement and to
        consummate the transactions contemplated hereby;

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

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

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

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

                                      -39-

<PAGE>

               (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.

        Section 2.07.  CONVEYANCE OF THE SUBSEQUENT MORTGAGE LOANS.

        (a) Subject to the conditions set forth in paragraph (b) below in
consideration of the Trustee's delivery on the Subsequent Transfer Dates to or
upon the written order of the Seller of all or a portion of the balance of funds
in the Pre-Funding Account, the Seller shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey without recourse to the Trust Fund
but subject to the other terms and provisions of this Agreement all of the
right, title and interest of the Seller in and to (i) the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Instrument delivered by the Seller on such Subsequent
Transfer Date, (ii) all interest accruing thereon on and after the Subsequent
Cut-off Date and all collections in respect of interest and principal due after
the Subsequent Cut-off Date and (iii) all items with respect to such Subsequent
Mortgage Loans to be delivered pursuant to Section 2.01 and the other items in
the related Mortgage Files; provided, however, that the Seller reserves and
retains all right, title and interest in and to principal received and interest
accruing on the Subsequent Mortgage Loans prior to the related Subsequent
Cut-off Date. The transfer to the Trustee for deposit in the mortgage pool by
the Seller of the Subsequent Mortgage Loans identified on the Mortgage Loan
Schedule shall be absolute and is intended by the Seller, the Mortgage Loan
Seller, the Master Servicer, the Securities Administrator, the Trustee and the
Certificateholders to constitute and to be treated as a sale of the Subsequent
Mortgage Loans by the Seller to the Trust Fund. The related Mortgage File for
each Subsequent Mortgage Loan shall be delivered to the Trustee at least three
(3) Business Days prior to the related Subsequent Transfer Date.

        The purchase price paid by the Trustee from amounts released from the
Pre-Funding Account shall be one-hundred percent (100%) of the aggregate
Scheduled Principal Balance of the Subsequent Mortgage Loans so transferred (as
identified on the Mortgage Loan Schedule provided by the Seller). This Agreement
shall constitute a fixed-price purchase contract in accordance with Section
860G(a)(3)(A)(ii) of the Code.

        (b) The Seller shall transfer to the Trustee for deposit in the mortgage
pool the Subsequent Mortgage Loans and the other property and rights related
thereto as described in

                                      -40-

<PAGE>

paragraph (a) above, and the Trustee shall release funds from the Pre-Funding
Account, only upon the satisfaction of each of the following conditions on or
prior to the related Subsequent Transfer Date:

               (i) the Seller shall have delivered to the Trustee a duly
        executed Subsequent Transfer Instrument, which shall include a Mortgage
        Loan Schedule listing the Subsequent Mortgage Loans, and the Mortgage
        Loan Seller shall cause to be delivered a computer file containing such
        Mortgage Loan Schedule to the Trustee at least three (3) Business Days
        prior to the related Subsequent Transfer Date;

               (ii) as of each Subsequent Transfer Date, as evidenced by
        delivery of the Subsequent Transfer Instrument, substantially in the
        form of Exhibit K, the Seller shall not be insolvent nor shall it have
        been rendered insolvent by such transfer nor shall it be aware of any
        pending insolvency;

               (iii) such sale and transfer shall not result in a material
        adverse tax consequence to the Trust Fund or the Certificateholders;

               (iv)    the Pre-Funding Period shall not have terminated;

               (v) the Seller shall not have selected the Subsequent Mortgage
        Loans in a manner that it believed to be adverse to the interests of
        the Certificateholders; and

               (vi) the Seller shall have delivered to the Trustee a Subsequent
        Transfer Instrument confirming the satisfaction of the conditions
        precedent specified in this Section 2.08 and, pursuant to the Subsequent
        Transfer Instrument, assigned to the Trustee without recourse for the
        benefit of the Certificateholders all the right, title and interest of
        the Seller, in, to and under the Subsequent Mortgage Loan Purchase
        Agreement, to the extent of the Subsequent Mortgage Loans.

                                      -41-

<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 Servicer 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 Servicer's 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 Servicer to the Protected Account pursuant to the
applicable Servicing Agreements.

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

                                      -42-

<PAGE>

        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 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 SERVICER. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Seller the compliance by the
Servicer with its duties under the related Servicing Agreement. In the review of
the 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 the related Servicing Agreement. In the event that the Master Servicer,
in its judgment, determines that the 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 the Servicer under the
related Servicing Agreement, and shall, in the event that the 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 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 the 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 the Servicer and (ii) all costs and expenses associated with the
complete transfer of servicing, including

                                      -43-

<PAGE>

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 Distribution Account.

        (d) The Master Servicer shall require the 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 the 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, REMIC II, REMIC III or REMIC IV
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 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, REMIC
II, REMIC III or REMIC IV to fail to qualify as a REMIC or result in the
imposition of a tax upon REMIC I, REMIC II, REMIC III or REMIC IV, 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 the 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,

                                      -44-

<PAGE>

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 the 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
Servicer 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 the 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 Servicer pursuant to Section 4.01 or by the
Servicer pursuant to the related Servicing Agreement have been or will be so
deposited) and shall request that the Custodian, on behalf of the Trustee,
deliver to the 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 Servicer and the Trustee and
Custodian shall have no further responsibility with regard to such Mortgage
File. Upon any such payment in full, the Servicer is authorized, to give, as
agent for the Trustee, as the mortgagee under the Mortgage that secured the
Mortgage Loan, an instrument 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 the Servicer or the Master Servicer

                                      -45-

<PAGE>

(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 the 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 the 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 the Servicer from time to time as are required by the terms
hereof, or in the case of the Servicer, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by the Servicer in respect of any Mortgage Loan or which otherwise
are collected by the Master Servicer or by the 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 the Master Servicing Compensation and other amounts
provided in this Agreement, and to the right of the 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 the 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 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 the 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
the Servicer under this Agreement or the applicable Servicing Agreement.

                                      -46-

<PAGE>

        Section  3.09. STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.

        (a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicer 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, any amounts collected by the Servicer or
the Master 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 Distribution Account, subject
to withdrawal pursuant to Section 4.03. Any cost incurred by the Master Servicer
or the 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 the Servicer pursuant to Sections 4.01 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 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 the Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Distribution 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).

        Section  3.11. MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

        (a) The Master Servicer shall not take, or permit the 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 the 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
the Servicer (to the

                                      -47-

<PAGE>

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 the 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
4.02, any amounts collected by the Master Servicer or the Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the Distribution
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.

        Section 3.13. REALIZATION UPON DEFAULTED MORTGAGE LOANS. The Master
Servicer shall cause the 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.

        Section  3.14. COMPENSATION FOR THE MASTER SERVICER.

        The Master Servicer will be entitled to all income and gain realized
from any investment of funds in the Distribution Account (the "Master Servicing
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 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 the Servicer in
connection with a Principal Prepayment in full or otherwise in excess of amounts
required to be remitted to the Distribution Account. The Master

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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.

        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 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 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 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 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 Master Servicing Compensation, 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
Master Servicing Compensation, 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 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 Distribution
Account on the next succeeding Servicer 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, 2003, 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

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<PAGE>

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 the Servicer has failed to perform any of its
duties, responsibilities and obligations under its Servicing Agreement in 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, 2003 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, 2003, 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, 2003, 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

                                      -50-

<PAGE>

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 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 Loan 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 to purchase such Mortgage Loan from the Trust
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 Trustee a payment for deposit in the
Distribution Account covering the amount of the Repurchase Price for such a
Mortgage Loan, and EMC provides to the Trustee and the Master Servicer a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Distribution 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.

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<PAGE>

                                   ARTICLE IV

                                    Accounts

        Section 4.01. PROTECTED ACCOUNTS. (a) The Master Servicer shall enforce
the obligation of the 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
the 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) 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 Distribution 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 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 Servicer. The 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
Servicer shall withdraw or shall cause to be withdrawn from the Protected
Accounts and shall immediately deposit or cause to be deposited in the
Distribution 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 Servicer pursuant to the
        Servicing Agreements which were due on or before the related Due Date,
        net of the amount thereof comprising the Servicing Fees;

               (ii) Full Principal Prepayments and any Liquidation Proceeds
        received by the Servicer with respect to such Mortgage Loans in the
        related Prepayment Period, with interest

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<PAGE>

        to the date of prepayment or liquidation, net of the amount thereof
        comprising the Servicing Fees;

               (iii) Partial Principal Prepayments received by the Servicer 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 a Protected Account only to make
remittances as provided in Section 4.01(c); to reimburse the Master Servicer or
the 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) certain amounts
otherwise due to the Servicer may be retained by them and need not be deposited
in the Distribution Account.

        Section 4.02. 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

                                      -53-

<PAGE>

regulations pursuant thereto, if applicable, or any applicable comparable state
statute applicable to state chartered banking corporations.

        Section 4.03. 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 this Agreement or as the Securities Administrator has instructed
hereunder for the following purposes:

               (i) to reimburse the Master Servicer or the Servicer for any
        Monthly Advance of its own funds or any advance of such Master
        Servicer's or Servicer's own funds, the right of the Master 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 the Servicer from
        Insurance Proceeds or Liquidation Proceeds relating to a particular
        Mortgage Loan for amounts expended by the Master Servicer or the
        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 the 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 the 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 4.03 (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 the Servicer, as appropriate,
        from Liquidation Proceeds or Insurance Proceeds received in connection
        with the liquidation of any Mortgage Loan, the amount which it or the
        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 the Servicer from the
        Repurchase Price for any Mortgage Loan, the amount which it or the
        Servicer would have been entitled to receive under subclause (ix) of
        this Subsection 4.03 (a) as servicing compensation;

                                      -54-

<PAGE>

               (vi) to reimburse the Master Servicer or the Servicer for
        advances of funds, 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 the 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;

               (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);

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

               (xi) to reimburse or pay the 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).

        (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.

        Section  4.04. PRE-FUNDING ACCOUNT.

        (a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account, which shall be titled "Pre-Funding Account,
Bank One, National Association, as trustee for the registered holders of
Structured Asset Mortgage Investments Inc., Mortgage Pass- Through Certificates,
Series 2002-AR2" (the "Pre-Funding Account"). The Trustee shall, promptly upon
receipt, deposit in the Pre-Funding Account and retain therein the Pre-Funded
Amount remitted on the Closing Date to the Trustee by the Seller. Funds
deposited in the Pre-Funding Account shall be held in trust by the Trustee for
the Certificateholders for the uses and purposes set forth herein.

                                      -55-

<PAGE>

        (b) The Trustee will invest funds deposited in the Pre-Funding Account
as directed by the Seller or its designee in writing in Permitted Investments
with a maturity date (i) no later than the Business Day immediately preceding
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if a Person other than the Trustee or an Affiliate
manages or advises such investment, (ii) no later than the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement,
if the Trustee or an Affiliate manages or advises such investment or (iii)
within one (1) Business Day of the Trustee's receipt thereof. For federal income
tax purposes, the Seller or its designee shall be the owner of the Pre-Funding
Account and shall report all items of income, deduction, gain or loss arising
therefrom. All income and gain realized from investment of funds deposited in
the Pre-Funding Account shall be transferred to the Interest Coverage Account at
the following times: (i) on the Business Day immediately preceding each
Distribution Date, if a Person other than the Trustee or an Affiliate of the
Trustee manages or advises such investment, or on each Distribution Date, if the
Trustee or an Affiliate of the Trustee manages or advises such investment, (ii)
on the Business Day immediately preceding each Subsequent Transfer Date, if a
Person other than the Trustee or an Affiliate of the Trustee manages or advises
such investment, or on each Subsequent Transfer Date, if the Trustee or an
Affiliate of the Trustee manages or advises such investment or (iii) within one
(1) Business Day of the Trustee's receipt thereof. Such transferred funds shall
not constitute income and gain for purposes of Section 4.07(b) hereof. The
Seller or its designee shall deposit in the Pre-Funding Account the amount of
any net loss incurred in respect of any such Permitted Investment immediately
upon realization of such loss without any right of reimbursement therefor. At no
time will the Pre-Funding Account be an asset of any REMIC created hereunder.

        (c) Amounts on deposit in the Pre-Funding Account shall be withdrawn by
the Trustee as follows:

               (i) On any Subsequent Transfer Date, the Trustee shall withdraw
from the Pre- Funding Account an amount equal to 100% of the Scheduled Principal
Balances of the Subsequent Mortgage Loans transferred and assigned to the
Trustee for deposit in the mortgage pool on such Subsequent Transfer Date and
pay such amount to or upon the order of the Seller upon satisfaction of the
conditions set forth in Section 2.07 with respect to such transfer and
assignment;

               (ii) If the amount on deposit in the Pre-Funding Account
(exclusive of investment income) has not been reduced to zero during the
Pre-Funding Period, on the day immediately following the termination of the
Pre-Funding Period, the Trustee shall deposit into the Distribution Account any
amounts remaining in the Pre-Funding Account (exclusive of investment income)
for distribution in accordance with the terms hereof;

               (iii)   To withdraw any amount not required to be deposited in
the Pre-Funding Account or deposited therein in error; and

               (iv) To clear and terminate the Pre-Funding Account upon the
earlier to occur of (A) the Distribution Date immediately following the end of
the Pre-Funding Period and (B) the termination of this Agreement, with any
amounts remaining on deposit therein being paid to the Certificateholders then
entitled to distributions in respect of principal.

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<PAGE>

        Withdrawals pursuant to clauses (i), (ii) and (iii) shall be treated as
contributions of cash to REMIC I on the date of withdrawal.

        Section  4.05. INTEREST COVERAGE ACCOUNT.

        (a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account, which shall be titled "Interest Coverage
Account, Bank One, National Association, as trustee for the registered holders
of Structured Asset Mortgage Investments Inc., Mortgage Pass- Through
Certificates, Series 2002-AR2" (the "Interest Coverage Account"). The Trustee
shall, promptly upon receipt, deposit in the Interest Coverage Account and
retain therein the Interest Coverage Amount remitted on the Closing Date to the
Trustee by the Seller. Funds deposited in the Interest Coverage Account shall be
held in trust by the Trustee for the Certificateholders for the uses and
purposes set forth herein.

        (b) For federal income tax purposes, the Class X Certificateholder shall
be the owner of the Interest Coverage Account and shall report all items of
income, deduction, gain or loss arising therefrom. At no time will the Interest
Coverage Account be an asset of any REMIC created hereunder. All income and gain
realized from investment of funds deposited in the Interest Coverage Account,
which investment shall be made solely upon the written direction of the Class X
Certificateholder, shall be for the sole and exclusive benefit of the Class X
Certificateholder and shall be remitted by the Trustee to the Class X
Certificateholder no later than the first Business Day following receipt of such
income and gain by the Trustee. The Class X Certificateholder shall deposit in
the Interest Coverage Account the amount of any net loss incurred in respect of
any such Permitted Investment immediately upon realization of such loss.

        (c) On each Distribution Date during the Pre-Funding Period and on the
Distribution Date immediately following the end of the Pre-Funding Period, the
Trustee shall withdraw from the Interest Coverage Account and deposit in the
Distribution Account an amount equal to 30 days' interest on the excess, if any,
of the Pre-Funded Amount over the aggregate Scheduled Principal Balance of
Subsequent Mortgage Loans that both (i) had a Due Date during the Due Period
relating to such Distribution Date and (ii) had a Subsequent Cut-off Date prior
to the first day of the month in which such Distribution Date occurs, at a per
annum rate equal to the weighted average of the Net Mortgage Rates of those
Subsequent Mortgage Loans. Such withdrawal and deposit shall be treated as a
contribution of cash by the Mortgage Loan Seller to REMIC I on the date thereof.
Immediately following any such withdrawal and deposit, and immediately following
the conveyance of any Subsequent Mortgage Loans to the Trust on any Subsequent
Transfer Date, the Trustee shall withdraw from the Interest Coverage Account and
remit to the Mortgage Loan Seller or its designee an amount equal to the excess,
if any, of the amount remaining in such Interest Coverage Account over the
amount that would be required to be withdrawn therefrom (assuming sufficient
funds therein) pursuant to the preceding sentence on each subsequent
Distribution Date, if any, that will occur during the Pre-Funding Period or that
will be the Distribution Date immediately following the end of the Pre-Funding
Period, if no Subsequent Mortgage Loans were acquired by the Trust Fund after
the end of the Prepayment Period relating to the current Distribution Date.

        (d) Upon the earliest of (i) the Distribution Date immediately following
the end of the Pre-Funding Period, (ii) the reduction of the principal balances
of the Certificates to zero or (iii) the

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<PAGE>

termination of this Agreement in accordance with Section 10.01, any amount
remaining on deposit in the Interest Coverage Account after distributions
pursuant to paragraph (c) above shall be withdrawn by the Trustee and paid to
the Seller or its designee.

        Section 4.06. DISTRIBUTION OF CARRYOVER SHORTFALL AMOUNT; CARRYOVER
                      SHORTFALL RESERVE FUND.

        (a) On the Closing Date, the Trustee shall establish and maintain in its
name, in trust for the benefit of Class A-1, Class B-1, Class B-2 and Class B-3
Certificates, the Carryover Shortfall Reserve Fund. The Trustee shall, promptly
upon receipt, deposit in the Carryover Shortfall Reserve Fund an amount equal to
$5,000 to be remitted on the Closing Date to the Trustee by the Mortgage Loan
Seller. On each Distribution Date, the Trustee shall transfer from the
Distribution Account to the Carryover Shortfall Reserve Fund the amounts
specified pursuant to Section 5.01(e). On each Distribution Date, to the extent
required, the Trustee shall make withdrawals from the Carryover Shortfall
Reserve Fund and use the amounts in the Carryover Shortfall Reserve Fund to make
distributions to the Class A-1, Class B-1, Class B-2 and Class B-3 Certificates,
in an amount equal to the amount of any Carryover Shortfall Amount on such
Certificate. Any such amounts transferred shall be treated for federal tax
purposes as amounts distributed by REMIC IV to the Class X Certificateholders as
transferee thereof.

        (b) The Carryover Shortfall Reserve Fund shall be an Eligible Account.
Amounts held in the Carryover Shortfall Reserve Fund from time to time shall
continue to constitute assets of the Trust Fund, but not of the REMICs, until
released from the Carryover Shortfall Reserve Fund pursuant to this Section
4.08. The Carryover Shortfall Reserve Fund constitutes an "outside reserve fund"
within the meaning of Treasury Regulation ss. 1.860G-2(h) and is not an asset of
the REMICs. The Class X Certificateholders shall be the owners of the Carryover
Shortfall Reserve Fund, and for all federal tax purposes, amounts transferred by
the REMICs to the Carryover Shortfall Reserve Fund shall be treated as amounts
distributed by the REMICs to the Class X Certificateholders. The Trustee shall
keep records that accurately reflect the funds on deposit in the Carryover
Shortfall Reserve Fund.

                                      -58-

<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 have the principal
balances and accrue interest at the Pass-Through Rates

                                      -59-

<PAGE>

equal to those set forth in this Section 5.01(c)(i) and (y) the Class R-I
Certificates, which is hereby designated as the single "residual interest" in
REMIC I.

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

     REMIC I
    Interest        Initial Balance     Pass-Through Rate      Related Group
-------------- ---------------------- --------------------- --------------------
      LT-1        $  205,314,849.00            (1)                Group 1
     LT-PF1       $   50,413,880.00            (2)                Group 1
      LT-2        $   49,805,470.00            (3)                Group 2
    Class R-I     $           50.00            (1)                Group 1

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

(1) For the Distribution Date in June 2002, the weighted average of the Net
Rates of the Group 1 Mortgage Loans other than the Subsequent 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. Thereafter, the weighted average of the Net Rates
of the Group 1 Mortgage Loans, weighted on the basis of the respective Scheduled
Principal Balances of each such Mortgage Loan as of the beginning of the Due
Period immediately preceding the related Distribution Date.

(2) For the Distribution Date in June 2002, a per annum rate equal to 3.6891%.
Thereafter, the weighted average of the Net Rates of the Group 1 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balances of each
such Mortgage Loan as of the beginning of the Due Period immediately preceding
the related Distribution Date.

(3) 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.

        For the Distribution Date in June 2002, principal and interest shall be
payable to, and shortfalls, losses and prepayments are allocable to, REMIC I
Regular Interests LT-1, LT-PF1 and LT-2 as such amounts are attributable to the
Group 1 Mortgage Loans other than the Subsequent Mortgage Loans, the Subsequent
Mortgage Loans and the Group 2 Mortgage Loans, respectively. Thereafter,
principal and interest shall be payable to, and shortfalls, losses and
prepayments are allocable to, (i) REMIC I Regular Interests LT-1 and LT-PF1, pro
rata, and (ii) REMIC I Regular Interest LT-2, as such amounts are attributable
to the Group 1 Mortgage Loans and the Group 2 Mortgage Loans, respectively.

        (ii) REMIC II will be evidenced by (x) the REMIC II Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC II and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(ii) and (y) the Class R-II Interest, which is hereby
designated as the single "residual interest" in REMIC II.

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

                                      -60-

<PAGE>

    REMIC II
    Interest        Initial Balance     Pass-Through Rate      Related Group
---------------- --------------------- -------------------- --------------------
       1A          $          1,854.06     (3)                    Group 1
       1B          $         25,572.87     (1)                    Group 1
       2A          $            361.09     (3)                    Group 2
       2B          $          4,980.55     (2)                    Group 2
       ZZZ         $    305,501,380.44     (3)                      N/A
   Class R-II      $             50.00     (1)                    Group 1

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

(1) The weighted average of the Pass-Through Rates of REMIC I Regular Interests
LT-1 and LT-PF1, weighted on the basis of the respective Current Principal
Amount of each such REMIC I Regular Interest immediately preceding the related
Distribution Date.

(2) The weighted average of the Pass-Through Rate of REMIC I Regular Interest
LT-2, weighted on the basis of the Current Principal Amount of such REMIC I
Regular Interest immediately preceding the related Distribution Date.

(3) The weighted average of the Pass-Through Rates of the REMIC I Regular
Interests, weighted on the basis of the respective Current Principal Amount of
each such REMIC I Regular Interest immediately preceding the related
Distribution Date.

        Distributions shall be deemed to be made to the REMIC II Regular
Interests first, so as to keep the Uncertificated Principal Balance of each
REMIC II 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 II Regular Interest ending with the designation
"A," so that the Uncertificated Principal Balance of each such REMIC II 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 II
Regular Interests such that the REMIC II Subordinated Balance Ratio is
maintained); and third, any remaining principal to REMIC II Regular Interest
ZZZ. 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 II 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 II Regular Interest ending with the
designation "A," so that the Uncertificated Principal Balance of each such REMIC
II 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 II Regular Interests such that the REMIC II Subordinated Balance
Ratio is maintained); and third, the remaining Realized Losses shall be
allocated to REMIC II Regular Interest ZZZ.

        (iii) REMIC III will be evidenced by (x) the REMIC III Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC III and have the principal
balances and accrue interest at the Pass-Through

                                      -61-

<PAGE>

Rates equal to those set forth in this Section 5.01(c)(iii) and (y) the Class
R-III Interest, which is hereby designated as the single "residual interest" in
REMIC III.

The REMIC III Regular Interests and the Class R-III Interest will have the
following designations and pass-through rates:

  REMIC III INTEREST         INITIAL BALANCE         PASS-THROUGH RATE
  ------------------         ---------------         -----------------
        A-1                  $237,188,200.00                (1)
        A-2                  $ 46,194,500.00                (2)
        A-3                  $  9,929,800.00                (3)
     Class R-III             $         50.00                (1)
        B-1                  $  4,124,800.00                (3)
        B-2                  $  2,902,500.00                (3)
        B-3                  $  1,833,300.00                (3)
        B-4                  $  1,069,400.00                (3)
        B-5                  $    611,000.00                (3)
        B-6                  $  1,680,549.12                (3)
       MT-R                  $         50.00                (3)

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

(1) REMIC III Regular Interest A-1 and the Class R-III Certificates will bear
interest at a variable Pass-Through Rate equal to the Pass-Through Rate of REMIC
II Regular Interest 1B.

(2) REMIC III Regular Interest A-2 will bear interest at a variable Pass-Through
Rate equal to the Pass-Through Rate of REMIC II Regular Interest 2B.

(3) REMIC III Regular Interests A-3, B-1, B-2, B-3, B-4, B-5, B-6 and MT-R will
bear interest at a variable Pass- Through Rate equal to the weighted average of
the Pass-Through Rates on each REMIC II Regular Interest ending with the
designation "A", weighted on the basis of the respective Current Principal
Amount of each such REMIC II Regular Interest immediately preceding the related
Distribution Date; provided that for purposes of such weighted average, the
Pass-Through Rate of each such REMIC II Regular Interest shall be subject to a
cap and a floor equal to the weighted average of the related REMIC II Regular
Interest ending with the designation "B".

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

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

                                      -62-

<PAGE>

          DESIGNATION           INITIAL PRINCIPAL AMOUNT       PASS-THROUGH RATE
          -----------           ------------------------       -----------------
              A-1                  $ 237,188,200.00                    (1)
              A-2                  $  46,194,500.00                    (2)
              A-3                  $   9,929,800.00                    (3)
               X                   $           0.00*                   (4)
              R-I                  $          50.00                    (5)
              R-II                 $          50.00                    (5)
             R-III                 $          50.00                    (5)
              R-IV                 $          50.00                    (5)
              B-1                  $   4,124,890.00                    (6)
              B-2                  $   2,902,500.00                    (7)
              B-3                  $   1,833,300.00                    (7)
              B-4                  $   1,069,400.00                    (8)
              B-5                  $     611,000.00                    (8)
              B-6                  $   1,680,549.12                    (8)

------------------------------
*        See the definition of "Notional Amount" herein.

(1) The Class A-1 Certificates will bear interest at a variable Pass-Through
Rate equal to the least of (i) One-Month LIBOR plus the related Margin, (ii)
11.00% per annum and (iii) the weighted average of the Net Rates of the Group 1
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided, however, that for
federal income tax purposes clause (iii) shall be a rate equivalent to the
foregoing, expressed as the Pass-Through Rate on REMIC III Regular Interest A-1.
The Pass-Through Rate with respect to the first Interest Accrual Period is
expected to be approximately 2.19% per annum.

(2) The Class A-2 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; provided, however, that for federal
income tax purposes the Pass-Through Rate of the Class A-2 Certificates will be
the equivalent of the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC III Regular Interest A-2, weighted on the basis of
the Current Principal Amount of such REMIC III Regular Interest immediately
preceding the related Distribution Date. The Pass-Through Rate with respect to
the first interest accrual period is expected to be approximately 3.68% per
annum.

(3) The Class A-3 Certificates will bear interest at a variable Pass-Through
Rate equal to the least of (i) One-Month LIBOR plus the related Margin, (ii)
11.00% per annum and (iii) the weighted average of the Pass-Through Rates on
REMIC III Regular Interests A-3, B-1, B-2, B-3, B-4, B-5 and B-6, weighted on
the basis of the respective Current Principal Amount of each such REMIC III
Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate with respect to the first interest accrual period is expected
to be approximately 2.34% per annum.

                                      -63-

<PAGE>

(4) The Class X Certificates will consist of two components, Component X-1 and
Component X-2. The components of the Class X Certificates are not separately
transferable.

         Component X-1 will bear interest at a variable Pass-Through Rate equal
to the greater of (i) zero and (ii) the excess of (x) the weighted average of
the net rates of the Group 1 Mortgage Loans over (y) the Pass-Through Rate on
the Class A-1 Certificates, based on a notional amount equal to the Current
Principal Amount of the Class A-1 Certificates; provided, however, that for
federal income tax purposes Component X-1 will bear interest at a variable Pass-
Through Rate equal to the greater of (i) zero and (ii) the excess of (x) the
Pass-Through Rate on REMIC III Regular Interest A-1 over (y) the lesser of (i)
One-Month LIBOR plus the related Margin and (ii) 11.00% per annum, based on a
notional amount equal to the Current Principal Amount of REMIC III Regular
Interest A-1. Amounts distributable to the Class X Certificates in respect of
Component X-1 may be reduced by any amounts necessary to fund the Carryover
Shortfall Reserve Fund to pay any Carryover Shortfall Amount to the Class A-1
Certificates on the related Distribution Date.

         Component X-2 will bear interest at a variable Pass-Through Rate equal
to the greater of (i) zero and (ii) the excess of (x) the weighted average of
the net rates of the mortgage loans over (y) the weighted average of the Pass-
Through Rates on the Class A-3, Class B-1, Class B-2 and Class B-3 Certificates,
based on a notional amount equal to the Current Principal Amount of the Class
A-3, Class B-1, Class B-2 and Class B-3 Certificates; provided, however, that
for federal income tax purposes Component X-1 will bear interest equal to sum of
(A) interest at a variable Pass-Through Rate equal to the greater of (i) zero
and (ii) the excess of (x) the Pass-Through Rate on REMIC III Regular Interest
A-3 over (y) the lesser of (i) One-Month LIBOR plus the related Margin and (ii)
11.00% per annum, based on a notional amount equal to the Current Principal
Amount of REMIC III Regular Interest A-3, (B) interest at a variable
Pass-Through Rate equal to the greater of (i) zero and (ii) the excess of (x)
the Pass-Through Rate on REMIC III Regular Interest B-1 over (y) the lesser of
(i) One-Month LIBOR plus the related Margin and (ii) 11.00% per annum, based on
a notional amount equal to the Current Principal Amount of REMIC III Regular
Interest B-1, (C) interest at a variable Pass-Through Rate equal to the greater
of (i) zero and (ii) the excess of (x) the Pass-Through Rate on REMIC III
Regular Interest B-2 over (y) the lesser of (i) One-Month LIBOR plus the related
Margin and (ii) 11.00% per annum, based on a notional amount equal to the
Current Principal Amount of REMIC III Regular Interest B-2, and (D) interest at
a variable Pass- Through Rate equal to the greater of (i) zero and (ii) the
excess of (x) the Pass-Through Rate on REMIC III Regular Interest B-3 over (y)
the lesser of (i) One-Month LIBOR plus the related Margin and (ii) 11.00% per
annum, based on a notional amount equal to the Current Principal Amount of REMIC
III Regular Interest B-3. Amounts distributable to the Class X Certificates in
respect of Component X-2 may be reduced by any amounts necessary to fund the
Carryover Shortfall Reserve Fund to pay any Carryover Shortfall Amount to the
Class A-3, Class B-1, Class B-2 or Class B-3 Certificates on the related
Distribution Date.

         The Pass-Through Rate with respect to the first interest accrual period
is expected to be approximately 1.397% per annum.

         On the first Distribution Date, the Class X Certificate also will be
entitled to 11 days of interest on its Notional Amount at the Pass-Through Rates
applicable to the Adjustable Rate Certificates; provided, however, that for
federal income tax purposes such entitlement is the equivalent of the foregoing,
expressed as 100% of the interest payable on REMIC III Regular Interests A-1,
A-3, B-1, B-2 and B-3, in each case for an accrual period of 11days.

(5) The Class R-IV Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 1 Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balances of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date; provided, however, that for federal
income tax purposes the Pass-Through Rate of the Class R-IV Certificates will be
the equivalent of the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC III Regular Interest A-1, weighted on the basis of
the Current Principal Amount of such REMIC III Regular Interest immediately
preceding the related Distribution Date. The Class R-I, Class R-II and Class
R-III Certificates will bear interest at the Pass-Through Rates described above.
The Pass-Through Rate with respect to the first interest accrual period is
expected to be approximately 3.61% per annum.

(6) The Class B-1 Certificates will bear interest at a variable Pass-Through
Rate equal to the least of (i) One-Month LIBOR plus the related Margin, (ii)
11.00% per annum and (iii) the weighted average of the Pass-Through Rates on

                                      -64-

<PAGE>

REMIC III Regular Interests A-3, B-1, B-2, B-3, B-4, B-5 and B-6, weighted on
the basis of the respective Current Principal Amount of each such REMIC III
Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate with respect to the first interest accrual period is expected
to be approximately 2.54% per annum.

(7) The Class B-2 Certificates and Class B-3 Certificates will bear interest at
a variable Pass-Through Rate equal to the least of (i) One-Month LIBOR plus the
related Margin, (ii) 11.00% per annum and (iii) the weighted average of the
Pass-Through Rates on REMIC III Regular Interests A-3, B-1, B-2, B-3, B-4, B-5
and B-6, weighted on the basis of the respective Current Principal Amount of
each such REMIC III Regular Interest immediately preceding the related
Distribution Date. The Pass-Through Rate with respect to the first interest
accrual period is expected to be approximately 2.84% per annum.

(8) The 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 REMIC III Regular Interests A-3, B-1, B-2, B-3, B-4, B-5 and B-6,
weighted on the basis of the respective Current Principal Amount of each such
REMIC III Regular Interest immediately preceding the related Distribution Date.
The Pass-Through Rate with respect to the first interest accrual period is
expected to be approximately 3.62% per annum.

        (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) and the
Senior

                                      -65-

<PAGE>

Mezzanine 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 Private Certificates shall be issued in
certificated fully-registered form in minimum dollar denominations of $25,000
and integral multiples of $1.00 in excess thereof, except that one Private
Certificate of each such Class may be issued in a different amount so that the
sum of the denominations of all outstanding Private Certificates of such Class
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, $50, $50 and $50, respectively. Each Class of Global
Certificates, if any, shall be issued in fully registered form in minimum dollar
denominations of $50,000 and integral multiples of $1.00 in excess thereof,
except that one Certificate of each Class may be in a different denomination so
that the sum of the denominations of all outstanding Certificates of such Class
shall equal the Current Principal Amount of such Class on the Closing Date. On
the Closing Date, the Trustee shall execute and countersign (i) in the case of
each Class of Offered Certificates, the Certificate in the entire Current
Principal Amount of the 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

                                      -66-

<PAGE>

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 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:

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

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

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

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

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

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

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

        (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

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

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

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

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

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

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

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

        (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

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Corporate Trust Office, or at the office of any transfer agent, together with an
executed instrument of assignment and transfer satisfactory in form and
substance to the Trustee in the case of transfer and a written request for
exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the Depository,
cause the Depository (or its nominee) to notify the Trustee in writing of a
request for transfer or exchange of such beneficial interest for an Individual
Certificate or Certificates. Following a proper request for transfer or
exchange, the Trustee shall, within five Business Days of such request made at
such Corporate Trust Office, sign, countersign and deliver at such Corporate
Trust Office, to the transferee (in the case of transfer) or holder (in the case
of exchange) or send by first class mail at the risk of the transferee (in the
case of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate Fractional Undivided
Interest and in such authorized denomination or denominations as may be
requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Corporate Trust Office by the
registered holder in person, or by a duly authorized attorney-in-fact.

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

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

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

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

        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

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<PAGE>

mutilated, destroyed, lost or stolen Certificate shall thereupon be canceled of
record by the Trustee and shall be of no further effect and evidence no rights.

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

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

        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

                                      -71-

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with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, the Trustee and the Seller, as
applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that was
in fact not a permitted transferee under this Subsection 5.05(b) at the time it
became a Holder all payments made on such Residual Certificate. Each Holder of a
Residual Certificate, by acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this Subsection 5.05(b) and to any amendment
of this Agreement deemed necessary (whether as a result of new legislation or
otherwise) by counsel of the Tax Matters Person or the Seller to ensure that the
Residual Certificates are not transferred to any Person who is not a Permitted
Transferee and that any transfer of such Residual Certificates will not cause
the imposition of a tax upon the Trust or cause any REMIC to fail to qualify as
a REMIC.

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

        (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.

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<PAGE>

        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 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

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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.

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                                   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 June 2002, in an aggregate amount equal to the Available
Funds for such Distribution Date.

        (A) On each Distribution Date on or prior to the Cross-Over Date, the
Group 1 Available Funds will be distributed to the Group 1 Senior Certificates
as follows:

               FIRST, pro rata, to the Group 1 Senior Certificates and Component
        X-1 of the Class X Certificates, the Accrued Certificate Interest on
        each such Class or Component for such Distribution Date, and to
        Component X-2 of the Class X Certificates, the Group 1 Allocation
        Fraction of Accrued Certificate Interest on such Component for such
        Distribution Date; provided, however, that the amount of Accrued
        Certificate Interest paid to the Class X Certificates in respect of
        Component X-1 will be reduced by the aggregate amount of any Carryover
        Shortfall Amounts on the Class A-1 Certificates, and that the amount of
        Accrued Certificate Interest paid to the Class X Certificates pursuant
        to this clause in respect of Component X-2 will be reduced by the Group
        1 Allocation Fraction of any Carryover Shortfall Amounts on the Class
        A-3, Class B-1, Class B-2 and Class B-3 Certificates, in each case for
        such Distribution Date, and that an amount equal to the aggregate of
        such reductions will be deposited into the Carryover Shortfall Reserve
        Fund. In addition, as described below, Accrued Certificate Interest on
        such Group 1 Senior Certificates is subject to reduction in the event of
        certain Net Interest Shortfalls allocable thereto. Any Net Interest
        Shortfalls shall be allocated among the Group 1 Senior Certificates and
        Components of the Class X Certificates as described below;

               SECOND, to the Group 1 Senior Certificates and Component X-1 and
        Component X-2 of the Class X Certificates, any Accrued Certificate
        Interest pursuant to clause FIRST remaining undistributed from previous
        Distribution Dates (other than, with respect to Component X-1 and
        Component X-2 of the Class X Certificates, any amounts pursuant to
        clause FIRST deposited into the Carryover Shortfall Reserve Fund), to
        the extent of remaining Group 1 Available Funds; and

               THIRD, sequentially, in the following order, to the Class R-I,
        Class R-II, Class R-III, Class R-IV and Class A-1 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 Amount of
        such Class has been reduced to zero;

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

                FIRST, pro rata, to the Group 2 Senior Certificates, the Accrued
        Certificate Interest on each such Class for such Distribution Date and
        Component X-2 of the Class X Certificates,

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<PAGE>

        the Group 2 Allocation Fraction of Accrued Certificate Interest on such
        Component for such Distribution Date; provided, however, that the amount
        of Accrued Certificate Interest paid to the Class X Certificates in
        respect of Component X-2 will be reduced by the Group 2 Carryover
        Fraction of any Carryover Shortfall Amounts on the Class A-3, Class B-1,
        Class B-2 and Class B-3 Certificates, in each case for such Distribution
        Date, which will be deposited into the Carryover Shortfall Reserve Fund.
        In addition, as described below, Accrued Certificate Interest on the
        Group 2 Senior Certificates and Component X-2 of the Class X
        Certificates is subject to reduction in the event of certain Net
        Interest Shortfalls allocable thereto. Any Net Interest Shortfalls shall
        be allocated among the Group 2 Senior Certificates and Components of the
        Class X Certificates as described below;

               SECOND, to the Group 2 Senior Certificates and Component X-2 of
        the Class X Certificates, any Accrued Certificate Interest thereon
        pursuant to clause FIRST remaining undistributed from previous
        Distribution Dates (other than, with respect to Component X-2 of the
        Class X Certificates, any amounts deposited into the Carryover Shortfall
        Reserve Fund), to the extent of remaining Group 2 Available Funds; and

               THIRD, to the Group 2 Senior Certificates, in reduction of the
        Current Principal Amount thereof, the Group 2 Senior Optimal Principal
        Amount for such Distribution Date to the extent of remaining Group 2
        Available Funds, until the Current Principal Amount of such Class has
        been reduced to zero;

        (C) Except as provided in paragraphs (E) and (F) below, on each
Distribution Date on or prior to the Cross-Over Date, an amount equal to the sum
of the remaining Group 1 Available Funds and Group 2 Available Funds after the
distributions in (A) and (B) above will be distributed to the Class A-3
Certificates, 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 the sum of the remaining Group 1 Available Funds and
Group 2 Available Funds;

        (D) Except as provided in paragraphs (E) and (F) below, on each
Distribution Date on or prior to the Cross-Over Date, an amount equal to the sum
of the remaining Group 1 and Group 2 Available Funds after the distributions in
(A), (B) and (C) 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 the sum of the remaining Group 1 Available
Funds and Group 2 Available Funds;

        (E) On each Distribution Date prior to the Cross-Over Date but after the
reduction of the Current Principal Amount of any of the Group 1 or Group 2
Senior Certificates to zero, the remaining Class or 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

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<PAGE>

Certificates' respective Mortgage Loan Group allocated to such Senior
Certificates, 100% of the Principal Prepayments on any Mortgage Loan in the
Mortgage Loan Group relating to the fully repaid Class or Classes of Senior
Certificates; provided, however, that if (A) the weighted average Senior
Mezzanine and Subordinate Percentage equals or exceeds 14.50% 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 aggregate Current Principal Amount of
the Senior Mezzanine Certificates and Subordinate Certificates does not exceed
50%, then the additional allocation of Principal Prepayments to the Senior
Certificates in accordance with this clause (E) will not be made.

        (F) 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
Mortgage Loan Group and any Senior Mezzanine Certificates and 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 Senior Mezzanine Certificates and 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 Mortgage Loan Group, and (ii) the
Accrued Certificate Interest otherwise allocable to the Senior Mezzanine
Certificates and 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 Amount of
such Class or Classes of Senior Certificates over (y) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Mortgage Loan Group. Any
such reduction in the Accrued Certificate Interest on the Senior Mezzanine
Certificates and Subordinate Certificates will be allocated in reverse order of
the Subordinate Certificates numerical designations, commencing with the Class
B-6 Certificates, and then to the Senior Mezzanine Certificates.

        (b) If, after distributions have been made pursuant to priorities first
and second of clauses (A) and (B) above on any Distribution Date, the remaining
Group 1 Available Funds or Group 2 Available Funds are less than the Group 1
Senior Optimal Principal Amount or Group 2 Senior Optimal Principal Amount,
respectively, such amount shall be reduced, and such remaining funds will be
distributed on the related Senior Certificates (other than the Class X
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.

        (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-IV Certificates;
provided that if on any Distribution Date there are any Group 1 or Group 2
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 (other than the Class X Certificates),
pro rata, based upon their Current Principal

                                      -77-

<PAGE>

Amounts, until all amounts due to all such Classes of Senior Certificates have
been paid in full, before any amounts are distributed to the Class R-IV
Certificates. It is not anticipated that there will be any significant amounts
remaining for such distribution.

        (e) On each Distribution Date, any amounts in the Carryover Shortfall
Reserve Fund shall be distributed sequentially, in the following order, to the
Class A-1, Class A-3, Class B-1, Class B-2 and Class B-3 Certificates, in each
case up to an amount equal to any Carryover Shortfall Amounts with respect to
such Class of Certificates.

        (f) 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.

        (g) 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.

        (h) 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;

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

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

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

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

                       EIGHTH, if such loss is on a Group 1 or Group 2 Mortgage
                       Loan, to the Group 1 or Group 2 Senior Certificates,
                       respectively; and

                       NINTH, to the Senior Certificates (other than the
                       Interest Only 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 Trustee shall determine the Senior
Mezzanine Certificate Writedown Amount and the Subordinate Certificate Writedown
Amount. Any such Subordinate Certificate Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of (i) with respect to
the Subordinate Certificate Writedown Amount, if prior to the Cross-Over Date,
the Current Principal Amounts of the Subordinate Certificates, in the reverse
order of their numerical Class designations, (ii) with respect to the Senior
Mezzanine Certificate Writedown Amount, if prior to the Cross-Over Date, the
Current Principal Amounts of the Senior Mezzanine Certificates and (iii) 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.

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        (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 Senior Mezzanine and Subordinate Certificates in right
of distribution, such Realized Losses will be borne first by the Subordinate
Certificates in inverse order of their numerical Class designations, and then by
the Senior Mezzanine Certificates. Following the Cross-Over Date, the interest
portion of Realized Losses on the Group 1 Mortgage Loans will be allocated on a
pro rata basis to the Group 1 Senior Certificates, Component X-1 of the Class X
Certificates and to Component X-2 of the Class X Certificates to the extent of
the Group 1 Allocation Fraction thereof, and the interest portion of Realized
Losses on the Group 2 Mortgage Loans will be allocated on a pro rata basis to
the Group 2 Senior Certificates and to Component X-2 of the Class X Certificates
to the extent of the Group 2 Allocation Fraction thereof.

        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, in the case of the Interest Only Certificates, a Notional Amount of
$1,000, or in the case of the Residual Certificates, an initial Current
Principal Amount of $50:

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

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

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

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

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

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

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

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

               (x) with respect to each Mortgage Loan which incurred a Realized
        Loss during the related Prepayment Period, (i) the loan number, (ii) the
        Scheduled Principal Balance of such Mortgage Loan as of the Cut-off
        Date, (ii) the Scheduled Principal Balance of such Mortgage Loan as of
        the beginning of the related Due Period, (iii) the Net Liquidation
        Proceeds with respect to such Mortgage Loan 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;

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               (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;

                 (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;

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

               (xix) the then applicable Group 1 and Group 2 Senior Percentage,
        Group 1 and Group 2 Senior Prepayment Percentage, Senior Mezzanine and
        Subordinate Percentage and Senior Mezzanine and Subordinate Prepayment
        Percentage; and

                 (xx) the amount withdrawn from the Pre-Funding Account and the
        Interest Coverage Account and used to make payments to
        Certificateholders on that Distribution Date, the amount remaining on
        deposit following such Distribution Date, and the amount withdrawn from
        the Pre-Funding Account used to buy Subsequent Mortgage Loans prior to
        such Distribution Date.

        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.

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<PAGE>

        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 2003, 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 advise
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 information shall be provided by the Securities Administrator
pursuant to the requirements of the Code.

        Section 6.05. MONTHLY ADVANCES. Pursuant to the related Servicing
Agreement, the Servicer will make Monthly Advances. Each such Monthly Advance
shall be remitted to the Distribution Account no later than 1:00 p.m. Eastern
time on the Distribution Account Deposit Date in immediately available funds.
Subject to the Master Servicer's recoverability determination, in the event that
the Servicer fails to make a required Advance, the Master Servicer shall be
required to remit the amount of such Monthly Advance to the Distribution
Account. The Master Servicer shall be obligated to make any such Advance only to
the extent that such advance would not be a Nonrecoverable Advance. If the
Master Servicer shall have determined that it has made a Nonrecoverable Advance
or that a proposed Monthly Advance or a lesser portion of such Monthly Advance
would constitute a Nonrecoverable Advance, the Master Servicer shall deliver (i)
to the Trustee for the benefit of the Certificateholders funds constituting the
remaining portion of such Advance, if applicable, and (ii) to the Trustee an
Officer's Certificate setting forth the basis for such determination.

        The Master Servicer shall be entitled to be reimbursed from the
Distribution Account for all Monthly Advances of its own funds made pursuant to
this Section as provided in Section 4.03. The obligation to make Monthly
Advances with respect to any Mortgage Loan shall continue until such Mortgage
Loan is paid in full or the related Mortgaged Property or related REO Property
has been liquidated or until the purchase or repurchase thereof (or substitution
therefor) from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section 6.05.

        Subject to and in accordance with the provisions of Article VIII hereof,
in the event the Master Servicer fails to make such Monthly Advance, then the
Trustee, as Successor Master

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Servicer, shall be obligated to make such Monthly Advance, subject to the
provisions of this Section 6.05.

        Section 6.06. COMPENSATING INTEREST PAYMENTS. Upon notice timely notice
by the Trustee, the Master Servicer shall deposit in the Distribution 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 Servicer under
the applicable Servicing Agreements with respect to subclauses (a) and (b) of
the definition of Interest Shortfall with respect to the Mortgage Loans for the
related Distribution Date, and not so paid by the Servicer 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.

                                   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. 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

                                      -84-

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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.

        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

                                      -85-

<PAGE>

be expenses, costs and liabilities of the Trust Fund, and the Master Servicer
shall be entitled to be reimbursed therefor out of the Distribution 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 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
the 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

                                      -86-

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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 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.

                                      -87-

<PAGE>

                                  ARTICLE VIII

                                     Default

        Section 8.01. "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 deposit in the Distribution
        Account any amount so required by it 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.

                                      -88-

<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

                                      -89-

<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.

                                      -90-

<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.

                                      -91-

<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 on
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

                                      -92-

<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 Distribution Account pursuant to this Agreement
will be promptly so deposited by the Master Servicer and the Trustee.

                                      -93-

<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 that the payment within a reasonable time
        to the Trustee or the Securities Administrator, as

                                      -94-

<PAGE>

        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.

        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

                                      -95-

<PAGE>

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
Distribution Account pursuant to Section 4.03 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 Distribution
Account are insufficient therefor, the Trustee 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

                                      -96-

<PAGE>

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 S&P with
respect to their long-term rating and rated "BBB" or higher by S&P 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.

        (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

                                      -97-

<PAGE>

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.

        (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..

                                      -98-

<PAGE>

        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 co- trustee or co-trustees, jointly with the Trustee,
or separate trustee or separate trustees, of all or any part of the Trust, and
to vest in such Person or Persons, in such capacity, such title to the Trust, or
any part thereof, and, subject to the other provisions of this Section 9.11,
such powers, duties, obligations, rights and trusts as the Seller and the
Trustee may consider necessary or desirable.

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

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

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

        (e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment,

                                      -99-

<PAGE>

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, REMIC II, REMIC III and REMIC IV 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, REMIC II, REMIC III and REMIC IV, 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 shall 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, REMIC II, REMIC III and REMIC IV (the
"REMIC Reporting Agent"). The Trustee shall make elections to treat each of
REMIC I, REMIC II, REMIC III and REMIC IV as a REMIC (which elections shall
apply to the taxable period ending December 31, 2002 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 Certificate
is hereby designated as the "Tax Matters Person" (within the meaning of Treas.
Reg. 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

                                      -100-

<PAGE>

Person for each of REMIC I, REMIC II, REMIC III and REMIC IV 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, REMIC II, REMIC III and
REMIC IV 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
Seller 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.

                                      -101-

<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, REMIC II, REMIC III or REMIC IV has been lost or that a
substantial risk exists that such REMIC status will be lost for the then-current
taxable year. At any time thereafter, in the case of (i) or (ii) above, the
Seller may elect to terminate the REMIC I, REMIC II, REMIC III

                                      -102-

<PAGE>

or REMIC IV 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, REMIC II, REMIC III and REMIC IV. 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 1 Mortgage Loans are
not sufficient to pay all of the Group 1 Certificates in full, any such
deficiency will be allocated first, to the Subordinate Certificates, in inverse
order of their numerical designation, second to the Senior Mezzanine
Certificates, 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, second to the Senior Mezzanine Certificates, and then to
the Group 2 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)..

                                      -103-

<PAGE>

        (f) 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 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, REMIC II, REMIC III and
REMIC IV 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, REMIC
II, REMIC III and REMIC IV or (ii) cause any REMIC to fail to qualify as a REMIC
at any time that any Regular Certificates are outstanding:

               (i) within 90 days prior to the final Distribution Date, at the
        written direction of the Seller, the Trustee, as agent for the
        respective Tax Matters Persons, shall adopt a plan of complete
        liquidation of REMIC I, REMIC II, REMIC III and REMIC IV 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, REMIC II, REMIC III and REMIC IV 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, REMIC II, REMIC III and REMIC IV, 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

                                      -104-

<PAGE>

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, REMIC II, REMIC III and REMIC IV shall
terminate.

                                      -105-

<PAGE>

                                   ARTICLE XI

                            Miscellaneous Provisions

        Section 11.01. INTENT OF PARTIES. The parties intend that each of REMIC
I, REMIC II, REMIC III and REMIC IV 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, REMIC II,
REMIC III or REMIC IV 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

                                      -106-

<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

                                      -107-

<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 Seller, the Securities Administrator, 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

                                      -108-

<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 EMC
Mortgage Corporation, EMC Mortgage Corporation, MacArthur Ridge II, 909 Hidden
Ridge Drive, Suite 200, Irving, Texas 75038 Attention: Mr. Edward Raice,
Telecopier No.: (972) 444- 2810, or 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, 9062 Old Annapolis Road, Columbia, Maryland 21045 (Attention: SAMI
2002-AR2), facsimile no.: (410) 715-2380, 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, 4th Floor,
New York, New York 10004, and Standard & Poor's, a division of the McGraw-Hill
Companies, Inc., 55 Water Street, 41st Floor, New York, New York, 10041,
Attention: Residential Mortgage Surveillance. Any notice delivered to the
Seller, the Master Servicer, 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.

        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.

                                      -109-

<PAGE>

        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 Distribution Account.

                                      -110-

<PAGE>

        IN WITNESS WHEREOF, the Seller, the Trustee, the Master Servicer, the
Securities Administrator and EMC Mortgage Corporation 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:
                                          ----------------------------------
                                          Name:
                                          Title:

                                      -111-

<PAGE>

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, as Mortgage Loan Seller

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

                                                ___________________________
                                                       Notary Public

[Notarial Seal]

                                      -112-

<PAGE>

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

        On the 31st day of May, 2002 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]

                                      -113-

<PAGE>

STATE OF                          )
                                  ) ss.:
COUNTY                            )

        On the 31st day of May, 2002 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]

                                      -114-

<PAGE>

STATE OF TEXAS                    )
                                  ) ss.:
COUNTY OF DALLAS                  )

        On the 31ST day of May, 2002 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]

                                      -115-

<PAGE>

STATE OF MARYLAND                 )
                                  ) ss.:
COUNTY OF                         )

        On the 31st day of May, 2002 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]

                                      -116-

<PAGE>

STATE OF MARYLAND                 )
                                  ) ss.:
COUNTY OF                         )

        On the 31st day of May, 2002 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]

                                      -117-

<PAGE>

STATE OF TEXAS                    )
                                  ) ss.:
COUNTY OF DALLAS                  )

        On the 31st day of May, 2002 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]

                                      -118-

<PAGE>

                                                                     EXHIBIT A-1

                      FORM OF CLASS [A-__] [X] CERTIFICATES

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE [CURRENT PRINCIPAL] [NOTIONAL] AMOUNT OF THIS CERTIFICATE
WILL BE DECREASED BY THE PRINCIPAL PAYMENTS [HEREON] AND REALIZED LOSSES
[ALLOCABLE HERETO] [ON THE MORTGAGE LOANS]. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE [CURRENT PRINCIPAL] [NOTIONAL] AMOUNT OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS [CURRENT PRINCIPAL] [NOTIONAL]
AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

                                      A-1-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                       <C>    <C>    <C>    <C>    <C>    <C>
Certificate No.__                                         [Variable Pass-Through Rate]
                                                          [Pass-Through Rate of Component X-_:
                                                          Variable Rate]
Class [A-__] [X] [Senior] [Senior Mezzanine]

Date of Pooling and Servicing Agreement and               Aggregate Initial [Current Principal] [Notional]
Cut-off Date:                                             Amount of this Certificate as of the Cut-off
May 1, 2002                                               Date:
                                                          $____________

First Distribution Date:                                  Initial [Current Principal] [Notional Amount]
June 19, 2002                                             of this Certificate as of the Cut-off Date:
                                                          $____________

Master Servicer:
Wells Fargo Bank Minnesota, National
Association                                               CUSIP:  ____________

Assumed Final Distribution Date:
July 19, 2032
</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2002-AR2

         evidencing a fractional undivided interest in the distributions
         allocable to the Class [A-__] Certificates with respect to a Trust Fund
         consisting primarily of a pool of one- to four-family adjustable rate
         mortgage loans sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of first lien, adjustable rate mortgage loans
secured by one- to four- family residences and individual condominium units
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments Inc. ("SAMI"). The Mortgage

                                      A-1-2

<PAGE>

Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI. Wells Fargo Bank
Minnesota, National Association ("Wells Fargo") will act as master servicer of
the Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement"), among SAMI, as seller (the "Seller"), EMC
Mortgage Corporation, Wells Fargo, as Master Servicer and securities
administrator and Bank One, National Association, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

                  Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the [Current Principal] [Notional] Amount [of each Component] hereof at a per
annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 19th day of each month, or, if such 19th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the calendar month preceding the month of such Distribution
Date, an amount equal to the product of the Fractional Undivided Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. The Assumed Final Distribution Date is the first Distribution
Date in the month immediately following the month of the latest scheduled
maturity date of any Mortgage Loan and is not likely to be the date on which the
[Current Principal] [Notional] Amount of this Class of Certificates will be
reduced to zero.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
Initial [Current Principal] [Notional] Amount of this Certificate is set forth
above. The Current [Principal] [Notional] Amount hereof will be reduced to the
extent of distributions allocable to principal hereon and any Realized Losses
allocable hereto.

                  [The components relating to the Class X Certificates are not
separately transferrable.]

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

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the

                                      A-1-3

<PAGE>

Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

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

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller and the rights of the Certificateholders under the
Agreement from time to time by the Seller and the Trustee with the consent of
the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 66-2/3% (or in certain cases, Holders of Certificates
of affected Classes evidencing such percentage of the Fractional Undivided
Interests thereof). Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

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

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

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional

                                      A-1-4

<PAGE>

repurchase by the party named in the Agreement of all the Mortgage Loans and
other assets of the Trust Fund in accordance with the terms of the Agreement.
Such optional repurchase may be made only on or after the Distribution Date on
which the aggregate unpaid principal balance of the Mortgage Loans is less than
the percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-1-5

<PAGE>

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

Dated: May 31, 2002                        BANK ONE, NATIONAL ASSOCIATION, not
                                           in its individual capacity but solely
                                           as Trustee

                                           By:
                                                --------------------------------
                                                     Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class [A-__] [X] Certificates referred to
in the within-mentioned Agreement.

                                           BANK ONE, NATIONAL ASSOCIATION
                                           Authorized signatory of Bank One,
                                           National Association, not in its
                                           individual capacity but solely as
                                           Trustee

                                           By:
                                                --------------------------------
                                                     Authorized Signatory

                                      A-1-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.

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

Dated:
                           _____________________________________________________
                                    Signature by or on behalf of assignor

                                        ________________________________________
                                                  Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

                                      A-1-7

<PAGE>

                                                                     EXHIBIT A-2

                             CLASS B-__ CERTIFICATE

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES [AND] THE SENIOR MEZZANINE CERTIFICATES [AND THE CLASS B-_
CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE
HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]

                  [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 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

                                      A-2-1

<PAGE>

SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN "INSTITUTIONAL
ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE 501(A)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY
OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER
SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE
TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER,
RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.

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

                                      A-2-2

<PAGE>

<TABLE>
<CAPTION>
<S>                                                       <C>
                                                          Variable Pass-Through Rate

Class B-__ Subordinate

Date of Pooling and Servicing Agreement and               Aggregate Initial Current Principal Amount of
Cut-off Date:                                             this Certificate as of the Cut-off Date:
May 1, 2002                                               $______________

First Distribution Date:                                  Initial Current Principal Amount of this
June 19, 2002                                             Certificate as of the Cut-off Date:
                                                          $--------------

Master Servicer:
Wells Fargo Bank Minnesota, National
Association                                               CUSIP: ______________

Assumed Final Distribution Date:
July 19, 2032
</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2002-AR2

         evidencing a fractional undivided interest in the distributions
         allocable to the Class B-__ Certificates with respect to a Trust Fund
         consisting primarily of a pool of one- to four-family adjustable
         interest rate mortgage loans sold by STRUCTURED ASSET MORTGAGE
         INVESTMENTS INC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that ____________ is the registered owner of
the Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of first lien, adjustable rate mortgage loans
secured by one- to four- family residences and individual condominium units
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments Inc. ("SAMI").

                                      A-2-3

<PAGE>

The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI. Wells
Fargo Bank Minnesota, National Association ("Wells Fargo") will act as master
servicer of the Mortgage Loans (the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), among SAMI, as seller (the "Seller"),
EMC Mortgage Corporation, Wells Fargo, as Master Servicer and securities
administrator and Bank One, National Association, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

                  Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Current Principal Amount hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 19th day
of each month, or, if such 19th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the calendar
month preceding the month of such Distribution Date, an amount equal to the
product of the Fractional Undivided Interest evidenced by this Certificate and
the amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the first Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
Initial Current Principal Amount of this Certificate is set forth above. The
Current Principal Amount hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto.

                  [This Certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of the Employee Retirement Income Security Act of
1974, as amended, and/or Section 4975 of the Internal Revenue Code of 1986, as
amended, unless the proposed transfer and/or holding of a Certificate and the
servicing, management and/or operation of the trust and its assets: (i) will not
result in any prohibited transaction which is not covered under an individual or
class prohibited transaction exemption, including, but not limited to,
Prohibited Transaction Exemption ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60
or PTE 96-23 and (ii) will not give rise to any additional fiduciary obligations
on the part of the Seller, the Master Servicer or the Trustee, which will be
deemed represented by an

                                      A-2-4

<PAGE>

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.]

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

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

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

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller and the rights of the Certificateholders under the
Agreement from time to time by the Seller and the Trustee with the consent of
the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 66-2/3% (or in certain cases, Holders of Certificates
of affected Classes evidencing such percentage of the Fractional Undivided
Interests thereof). Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

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

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

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee

                                      A-2-5

<PAGE>

and any agent of any of them may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Seller, the
Master Servicer, the Trustee or any such agent shall be affected by notice to
the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than the
percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-2-6

<PAGE>

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

Dated: May 31, 2002                        BANK ONE, NATIONAL ASSOCIATION, not
                                           in its individual capacity but solely
                                           as Trustee

                                           By:
                                                --------------------------------
                                                     Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class B-__ Certificates referred to
in the within-mentioned Agreement.

                                           BANK ONE, NATIONAL ASSOCIATION
                                           Authorized signatory of Bank One,
                                           National Association, not in its
                                           individual capacity but solely as
                                           Trustee

                                           By:
                                                --------------------------------
                                                     Authorized Signatory

                                      A-2-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.

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

Dated:
                           _____________________________________________________
                                    Signature by or on behalf of assignor

                                        ________________________________________
                                                  Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

                                      A-2-8

<PAGE>

                                                                     EXHIBIT A-3

                                              CLASS R-__ CERTIFICATE

                  THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON, A PUBLICLY TRADED PARTNERSHIP OR A DISQUALIFIED
ORGANIZATION (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  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.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING

                                      A-3-1

<PAGE>

TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL
FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY
ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.

                                                       A-3-2

<PAGE>

<TABLE>
<CAPTION>
<S>                                                       <C>
Certificate No. 1                                         Variable Pass-Through Rate

Class R-__ Senior

Date of Pooling and Servicing Agreement and               Aggregate Initial Current Principal Amount of
Cut-off Date:                                             this Certificate as of the Cut-off Date:
May 1, 2002                                               $50.00

First Distribution Date:                                  Initial Current Principal Amount of this
June 19, 2002                                             Certificate as of the Cut-off Date: $50.00

Master Servicer:
Wells Fargo Bank Minnesota, National
Association                                               CUSIP: ___________

Assumed Final Distribution Date:
July 19, 2032
</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2002-AR2

         evidencing a fractional undivided interest in the distributions
         allocable to the Class R-__ Certificates with respect to a Trust Fund
         consisting primarily of a pool of one- to four-family adjustable
         interest rate mortgage loans sold by STRUCTURED ASSET MORTGAGE
         INVESTMENTS INC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that Bear, Stearns Securities Corp. is the
registered owner of the Fractional Undivided Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund") generally consisting of first lien,
adjustable rate mortgage loans secured by one- to four- family residences and
individual condominium units (collectively, the "Mortgage Loans") sold by
Structured Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were
sold by EMC Mortgage Corporation ("EMC") to SAMI. Wells Fargo Bank Minnesota,
National Association ("Wells Fargo") will act as

                                      A-3-3

<PAGE>

master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among SAMI, as seller
(the "Seller"), EMC Mortgage Corporation, Wells Fargo, as Master Servicer and
securities administrator and Bank One, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

                  Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Current Principal Amount hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 19th day
of each month, or, if such 19th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the calendar
month preceding the month of such Distribution Date, an amount equal to the
product of the Fractional Undivided Interest evidenced by this Certificate and
the amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the first Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
Initial Current Principal Amount of this Certificate is set forth above. The
Current Principal Amount hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Seller will have the right, in its
sole discretion and without notice to the Holder of this

                                      A-3-4

<PAGE>

Certificate, to sell this Certificate to a purchaser selected by the Company,
which purchaser may be the Seller, or any affiliate of the Seller, on such terms
and conditions as the Seller may choose.

                  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.

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

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

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

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller and the rights of the Certificateholders under the
Agreement from time to time by the Seller and the Trustee with the consent of
the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 66-2/3% (or in certain cases, Holders of Certificates
of affected Classes evidencing such percentage of the Fractional Undivided
Interests thereof). Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

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

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new

                                      A-3-5

<PAGE>

Certificates evidencing the same Class and in the same aggregate Fractional
Undivided Interest, as requested by the Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than the
percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-3-6

<PAGE>

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

Dated: May 31, 2002                        BANK ONE, NATIONAL ASSOCIATION, not
                                           in its individual capacity but solely
                                           as Trustee

                                           By:
                                                --------------------------------
                                                     Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class R-__ Certificates referred to
in the within-mentioned Agreement.

                                           BANK ONE, NATIONAL ASSOCIATION
                                           Authorized signatory of Bank One,
                                           National Association, not in its
                                           individual capacity but solely as
                                           Trustee

                                           By:
                                                --------------------------------
                                                     Authorized Signatory

                                      A-3-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.

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

Dated:
                           _____________________________________________________
                                    Signature by or on behalf of assignor

                                        ________________________________________
                                                  Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

                                      A-3-8

<PAGE>

                                                                       EXHIBIT B

                             MORTGAGE LOAN SCHEDULE
                             ----------------------

                             [PROVIDED UPON REQUEST]

                                       B-1

<PAGE>

                                                                       EXHIBIT C

                                   [RESERVED]

                                       C-1

<PAGE>

                                                                       EXHIBIT D

                           REQUEST FOR RELEASE OF DOCUMENTS

To:      Bank One, National Association
         153  West  51st St., 5th Floor
         New York, New York 10019

RE:      Pooling and Servicing Agreement dated as of
         May 1, 2002, among SAMI,
         EMC Mortgage Corporation, Wells Fargo
         Bank Minnesota, National Association and
          Bank One, National Association
         as Trustee

         In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.

Mortgage Loan Number:
--------------------

Mortgagor Name, Address & Zip Code:
----------------------------------

Reason for Requesting Documents (check one):
-------------------------------------------

_____             1.       Mortgage Paid in Full and proceeds have been
                           deposited into the Custodial Account

_____             2.       Foreclosure

_____             3.       Substitution

_____             4.       Other Liquidation

_____             5.       Nonliquidation        Reason:
                                                        ------------------------

_____             6.       California Mortgage Loan paid in full

                                      By:
                                          --------------------------------------
                                          (authorized signer)

                                      Issuer:
                                               ---------------------------------
                                      Address:
                                                --------------------------------
                                      Date:
                                           -------------------------------------

                                       D-1

<PAGE>

                                                                       EXHIBIT E

                FORM OF AFFIDAVIT PURSUANT TO SECTION 860E(E)(4)

                                        Affidavit pursuant to Section 860E(e)(4)
                                        of the Internal Revenue Code of 1986, as
                                        amended, and for other purposes

STATE OF                   )
                           )ss:
COUNTY OF                  )

         [NAME OF OFFICER], being first duly sworn, deposes and says:

         1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of ] [the United States], on behalf of which he
makes this affidavit.

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Structured Asset Mortgage
Investment Trust 2002-AR2, Mortgage Pass-Through Certificates, Series 2002-AR2,
Class R-I, Class R-II, Class R-III and Class R-IV Certificates (the "Residual
Certificates") for the account of a disqualified organization; (iii) it consents
to any amendment of the Pooling and Servicing Agreement that shall be deemed
necessary by Structured Asset Mortgage Investments Inc. (upon advice of counsel)
to constitute a reasonable arrangement to ensure that the Residual Certificates
will not be owned directly or indirectly by a disqualified organization; and
(iv) it will not transfer such Residual Certificates unless (a) it has received
from the transferee an affidavit in substantially the same form as this
affidavit containing these same four representations and (b) as of the time of
the transfer, it does not have actual knowledge that such affidavit is false.

         3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that 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, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

         4. That the Investor's taxpayer identification number is
______________________.

         5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.

                                       E-1

<PAGE>

         6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.

         7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.

         8. The Investor is not an employee benefit plan or other plan
subject to the prohibited transaction provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or an investment
manager, named fiduciary or a trustee of any such plan, or any other Person
acting, directly or indirectly, on behalf of or purchasing any Certificate with
"plan assets" of any such plan.

         IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.

                                          [NAME OF INVESTOR]

                                          By:
                                                --------------------------------
                                                [Name of Officer]
                                                [Title of Officer]
                                                [Address of Investor for receipt
                                                 of distributions]

                                                Address of Investor
                                                for receipt of tax
                                                information:

                                       E-2

<PAGE>

         Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.

         Subscribed and sworn before me this ___ day of _________, 20___.

NOTARY PUBLIC

COUNTY OF

STATE OF

My commission expires the ___ day of ___________________, 20___.

                                       E-3

<PAGE>

                                                                     EXHIBIT F-1

                            FORM OF INVESTMENT LETTER

                                                                          [Date]
[SELLER]

Bank One, National Association
153 West 51st  St., 5th Floor
New York ,New York 10019

Structured Asset Mortgage Investments Inc.
383 Madison Avenue
New York, New York 10167

         Re:      Structured Asset Mortgage Investments Trust 2002-AR2, Mortgage
                  Pass-Through Certificates Series 2002-AR2 (the
                  "Certificates"), including the [Class B-4, Class B- 5, Class
                  B-6] Certificates (the "Privately Offered Certificates")
                  --------------------------------------------------------------

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, we
confirm that:

                  (i)      we understand that the Privately Offered Certificates
                           are not being registered under the Securities Act of
                           1933, as amended (the "Act") or any applicable state
                           securities or "Blue Sky" laws, and are being sold to
                           us in a transaction that is exempt from the
                           registration requirements of such laws;

                  (ii)     any information we desired concerning the
                           Certificates, including the Privately Offered
                           Certificates, the trust in which the Certificates
                           represent the entire beneficial ownership interest
                           (the "Trust") or any other matter we deemed relevant
                           to our decision to purchase Privately Offered
                           Certificates has been made available to us;

                  (iii)    we are able to bear the economic risk of investment
                           in Privately Offered Certificates; we are an
                           institutional "accredited investor" as defined in
                           Section 501(a) of Regulation D promulgated under the
                           Act and a sophisticated institutional investor;

                  (iv)     we are acquiring Privately Offered Certificates for
                           our own account, not as nominee for any other person,
                           and not with a present view to any distribution or
                           other disposition of the Privately Offered
                           Certificates;

                  (v)      we agree the Privately Offered Certificates must be
                           held indefinitely by us (and may not be sold,
                           pledged, hypothecated or in any way disposed of)

                                      F-1-1

<PAGE>

                           unless subsequently registered under the Act and any
                           applicable state securities or "Blue Sky" laws or an
                           exemption from the registration requirements of the
                           Act and any applicable state securities or "Blue Sky"
                           laws is available;

                  (vi)     we agree that in the event that at some future time
                           we wish to dispose of or exchange any of the
                           Privately Offered Certificates (such disposition or
                           exchange not being currently foreseen or
                           contemplated), we will not transfer or exchange any
                           of the Privately Offered Certificates unless:

                                    (A) (1) the sale is to an Eligible Purchaser
                           (as defined below), (2) if required by the Pooling
                           and Servicing Agreement (as defined below) a letter
                           to substantially the same effect as either this
                           letter or, if the Eligible Purchaser is a Qualified
                           Institutional Buyer as defined under Rule 144A of the
                           Act, the Rule 144A and Related Matters Certificate in
                           the form attached to the Pooling and Servicing
                           Agreement (as defined below) (or such other
                           documentation as may be acceptable to the Trustee) is
                           executed promptly by the purchaser and delivered to
                           the addressees hereof and (3) all offers or
                           solicitations in connection with the sale, whether
                           directly or through any agent acting on our behalf,
                           are limited only to Eligible Purchasers and are not
                           made by means of any form of general solicitation or
                           general advertising whatsoever; and

                                    (B) if the Privately Offered Certificate is
                           not registered under the Act (as to which we
                           acknowledge you have no obligation), the Privately
                           Offered Certificate is sold in a transaction that
                           does not require registration under the Act and any
                           applicable state securities or "blue sky" laws and,
                           if Bank One, National Association (the "Trustee") so
                           requests, a satisfactory Opinion of Counsel is
                           furnished to such effect, which Opinion of Counsel
                           shall be an expense of the transferor or the
                           transferee;

                  (vii)    we agree to be bound by all of the terms (including
                           those relating to restrictions on transfer) of the
                           Pooling and Servicing, pursuant to which the Trust
                           was formed; we have reviewed carefully and understand
                           the terms of the Pooling and Servicing Agreement;

                  (viii)   we either: (i) are not acquiring the Privately
                           Offered Certificate 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, or (ii) are
                           providing a representation or an opinion of counsel
                           to the effect that the proposed transfer and/or
                           holding of a Privately Offered 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

                                      F-1-2

<PAGE>

                           Exemption ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE
                           95-60, PTE 96-23 or Section 401(c) of ERISA and the
                           regulations promulgated thereunder and (II) will not
                           give rise to any additional fiduciary duties on the
                           part of the Seller, the Master Servicer or the
                           Trustee.

                  (ix)     We understand that each of the Class B-4, Class B-5
                           and Class B-6 Certificates bears, and will continue
                           to bear, a legend to substantiate the following
                           effect: "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
                           REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
                           ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
                           APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
                           UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
                           THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
                           INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
                           (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
                           PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
                           HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
                           PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
                           RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
                           REGISTRATION PROVIDED BY RULE 144 UNDER THE
                           SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
                           FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
                           THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or
                           (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
                           WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
                           PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
                           VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
                           RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
                           THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
                           RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
                           ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
                           PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
                           SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
                           CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
                           LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
                           JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED
                           DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN
                           EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
                           WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
                           RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
                           AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
                           1986, AS AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR
                           HOLDING OF A CERTIFICATE AND THE SERVICING,
                           MANAGEMENT AND/OR OPERATION OF

                                      F-1-3

<PAGE>

                           THE TRUST AND ITS ASSETS: (1) 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, PTE 96-23 OR SECTION 401(C) OF ERISA AND THE
                           REGULATIONS TO BE PROMULGATED THEREUNDER AND (II)
                           WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY DUTIES
                           ON THE PART OF THE SELLER, THE MASTER SERVICER OR THE
                           TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER
                           OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE
                           AND WILL BE EVIDENCED BY A REPRESENTATION OR AN
                           OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF
                           A HOLDER OF A PRIVATE CERTIFICATE."

         "ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.

         Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of May 1, 2002, among
Structured Asset Mortgage Investments Inc., EMC Mortgage Corporation, Wells
Fargo Bank Minnesota, National Association and Bank One, National Association,
as Trustee (the "Pooling and Servicing Agreement').

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

Name of Nominee (if any):
                          ---------------------------------

                                      F-1-4

<PAGE>

         IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.

                                         Very truly yours,

                                         [PURCHASER]

                                         By:
                                              ----------------------------------
                                                  (Authorized Officer)

                                         [By:
                                             -----------------------------------
                                                  Attorney-in-fact]

                                      F-1-5

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                             [NAME OF NOMINEE]

                                             By:
                                                --------------------------------
                                                      (Authorized Officer)

                                             [By:
                                                   -----------------------------
                                                      Attorney-in-fact]

                                      F-1-6

<PAGE>

                                                                     EXHIBIT F-2

                  FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE

[SELLER]                                                                  [Date]

Bank One, National Association
153 West 51st  St., 5th Floor
New York, New York 10019

Structured Asset Mortgage Investments Inc.
383 Madison Avenue
New York, New York 10179

                  Re:      Structured Asset Mortgage Investment Trust 2002-AR2,
                           Mortgage Pass-Through Certificates, Series 2002-AR2
                           Class B-4, Class B-5 and Class B-6 Certificates
                           (the "Privately Offered Certificates")
                           -----------------------------------------------------

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:

1.       It owned and/or invested on a discretionary basis eligible securities
         (excluding affiliate's securities, bank deposit notes and CD's, loan
         participations, repurchase agreements, securities owned but subject to
         a repurchase agreement and swaps), as described below:

         Date: ______________, 20__ (must be on or after the close of its most
         recent fiscal year)

         Amount: $ _____________________; and

2.       The dollar amount set forth above is:

         a.       greater than $100 million and the undersigned is one of the
                  following entities:

                  (x)      |_|      an insurance company as defined in Section
                                    2(13) of the Act1; or

--------
1    A purchase by an insurance company for one or more of its separate
     accounts, as defined by Section 2(a)(37) of the Investment Company Act of
     1940, which are neither registered nor required to be registered
     thereunder, shall be deemed to be a purchase for the account of such
     insurance company.

                                      F-2-1

<PAGE>

                  (y)      |_|      an investment company registered under the
                                    Investment Company Act or any business
                                    development company as defined in Section
                                    2(a)(48) of the Investment Company Act of
                                    1940; or

                  (z)      |_|      a Small Business Investment Company licensed
                                    by the U.S. Small Business Administration
                                    under Section 301(c) or (d) of the Small
                                    Business Investment Act of 1958; or

                  (aa)              |_| a plan (i) established and maintained by
                                    a state, its political subdivisions, or any
                                    agency or instrumentality of a state or its
                                    political subdivisions, the laws of which
                                    permit the purchase of securities of this
                                    type, for the benefit of its employees and
                                    (ii) the governing investment guidelines of
                                    which permit the purchase of securities of
                                    this type; or

                  (bb)     |_|      a business development company as defined in
                                    Section 202(a)(22) of the Investment
                                    Advisers Act of 1940; or

                  (cc)     |_|      a corporation (other than a U.S. bank,
                                    savings and loan association or equivalent
                                    foreign institution), partnership,
                                    Massachusetts or similar business trust, or
                                    an organization described in Section
                                    501(c)(3) of the Internal Revenue Code; or

                  (dd)     |_|      a U.S. bank, savings and loan association or
                                    equivalent foreign institution, which has an
                                    audited net worth of at least $25 million as
                                    demonstrated in its latest annual financial
                                    statements; or

                  (ee)     |_|      an investment adviser registered under the
                                    Investment Advisers Act; or

         b.       |_|      greater than $10 million, and the undersigned is a
                           broker-dealer registered with the SEC; or

         c.       |_|      less than $ 10 million, and the undersigned is a
                           broker-dealer registered with the SEC and will only
                           purchase Rule 144A securities in transactions in
                           which it acts as a riskless principal (as defined in
                           Rule 144A); or

         d.                |_| less than $100 million, and the undersigned is an
                           investment company registered under the Investment
                           Company Act of 1940, which, together with one or more
                           registered investment companies having the same or an
                           affiliated investment adviser, owns at least $100
                           million of eligible securities; or

         e.       |_|      less than $100 million, and the undersigned is an
                           entity, all the equity owners of which are qualified
                           institutional buyers.

                                      F-2-2

<PAGE>

         The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) a person
reasonably believed to be a Qualified Institutional Buyer that purchases for its
own account or for the account of a Qualified Institutional Buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance in Rule
144A, or (ii) an institutional "accredited investor," as such term is defined
under Rule 501 of the Act in a transaction that otherwise does not constitute a
public offering.

         The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of May 1, 2002, among Structured Asset Mortgage
Investments Inc., EMC Mortgage Corporation, Wells Fargo Bank Minnesota, National
Association and Bank One, National Association, as Trustee, pursuant to
Certificates were issued.

         The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate 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, or (ii) is
providing a representation or an opinion of counsel to the effect that the
proposed transfer and/or holding of a Privately Offered 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 a prohibited
transaction exemption, including, but not limited to, Prohibited Transaction
Exemption ("PTE") 84- 14, PTE 91-38, PTE 90-1, PTE 95-60, PTE 96-23 or Section
401(c) of ERISA and the regulations to be promulgated thereunder and (II) will
not give rise to any additional fiduciary duties on the part of the Seller, the
Master Servicer or the Trustee.

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

                                      F-2-3

<PAGE>

Name of Nominee (if any):

IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on the
____ day of ___________, 20___.

                                              Very truly yours,

                                              [PURCHASER]

                                              By:
                                                  ------------------------------
                                                       (Authorized Officer)

                                              [By:
                                                   -----------------------------
                                                       Attorney-in-fact]

                                      F-2-4

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                           [NAME OF NOMINEE]

                                           By:
                                               ---------------------------------
                                                    (Authorized Officer)

                                           [By:
                                                --------------------------------
                                                    Attorney-in-fact]

                                      F-2-5

<PAGE>

                                                                       EXHIBIT G

                           FORM OF CUSTODIAL AGREEMENT
                           ---------------------------

                  THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of _______ __, 20__, by and among BANK
ONE, NATIONAL ASSOCIATION, as trustee (including its successors under the
Pooling and Servicing Agreement defined below, the "Trustee"), STRUCTURED ASSET
MORTGAGE INVESTMENTS INC., as company (together with any successor in interest,
the "Company"), WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as master
servicer and securities administrator (together with any successor in interest
or successor under the Pooling and Servicing Agreement referred to below, the
"Master Servicer") and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as
custodian (together with any successor in interest or any successor appointed
hereunder, the "Custodian").

                                WITNESSETH THAT:
                                ---------------

                  WHEREAS, the Company, the Master Servicer, the Trustee and EMC
Mortgage Corporation have entered into a Pooling and Servicing Agreement, dated
as of _______ _, 20__, relating to the issuance of Structured Asset Mortgage
Investment Trust 2002-AR2 Mortgage Pass-Through Certificates, Series 2002-AR2
(as in effect on the date of this agreement, the "Original Pooling and Servicing
Agreement," and as amended and supplemented from time to time, the "Pooling and
Servicing Agreement'); and

                  WHEREAS, the Custodian has agreed to act as agent for the
Trustee for the purposes of receiving and holding certain documents and other
instruments delivered by the Company or the Master Servicer under the Pooling
and Servicing Agreement and the Servicers under their respective Servicing
Agreements, all upon the terms and conditions and subject to the limitations
hereinafter set forth;

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the Trustee, the Company,
the Master Servicer and the Custodian hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

                  Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.

                                       G-1

<PAGE>

                                   ARTICLE II
                          CUSTODY OF MORTGAGE DOCUMENTS

                  Section 2.1 CUSTODIAN TO ACT AS AGENT: ACCEPTANCE OF MORTGAGE
FILES. The custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto (the
"Mortgage Files") and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present and
future Certificateholders.

                  Section 2.2 RECORDATION OF ASSIGNMENTS. If any Mortgage File
includes one or more assignments of Mortgage to the Trustee in a state which is
specifically excluded from the Opinion of Counsel delivered to the Trustee (with
a copy to the Custodian) pursuant to the provisions of Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Company for the purpose of recording it in the appropriate
public office for real property records, and the Company, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.

                  Section 2.3   REVIEW OF MORTGAGE FILES.

                  (a) On or prior to the Closing Date, in accordance with
Section 2.02 of the Pooling and Servicing Agreement, the Custodian shall deliver
to the Trustee an Initial Certification in the form annexed hereto as Exhibit
One evidencing receipt (subject to any exceptions noted therein) of a Mortgage
File for each of the Mortgage Loans listed on the Schedule attached hereto (the
"Mortgage Loan Schedule").

                  (b) Within 90 days of the Closing Date, the Custodian agrees,
for the benefit of Certificateholders, to review, in accordance with the
provisions of Section 2.02 of the Pooling and Servicing Agreement, each such
document, and shall deliver to the Trustee an Interim Certification in the form
annexed hereto as Exhibit Two to the effect that all such documents have been
executed and received and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, except for any exceptions listed on
Schedule A attached to such Interim Certification. The Custodian shall be under
no duty or obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.

                  (c) Not later than 180 days after the Closing Date, the
Custodian shall review the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and deliver to the Trustee a Final Certification
in the form annexed hereto as Exhibit Three evidencing the completeness of the
Mortgage Files.

                  (d) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible

                                       G-2

<PAGE>

to verify (i) the validity, legality, enforceability, due authorization,
recordability, sufficiency or genuineness of any of the documents included in
any Mortgage File or (ii) the collectibility, insurability, effectiveness or
suitability of any of the documents in any Mortgage File.

         Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans then contained in the Mortgage Files.

                  Section 2.4 NOTIFICATION OF BREACHES OF REPRESENTATIONS AND
WARRANTIES. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Company as set forth in the Pooling and Servicing Agreement
with respect to a Mortgage Loan relating to a Mortgage File, the Custodian shall
give prompt written notice to the Company, the related Servicer and the Trustee.

                  Section 2.5 CUSTODIAN TO COOPERATE: RELEASE OF MORTGAGE FILES.
Upon receipt of written notice from the Trustee that the Mortgage Loan Seller
has repurchased a Mortgage Loan pursuant to Article II of the Pooling and
Servicing Agreement, and that the purchase price therefore has been deposited in
the Distribution Account, then the Custodian agrees to promptly release to the
Mortgage Loan Seller the related Mortgage File.

                  Upon the Custodian's receipt of a request for release (a
"Request for Release") substantially in the form of Exhibit D to the Pooling and
Servicing Agreement signed by a Servicing Officer of the related Servicer
stating that it has received payment in full of a Mortgage Loan or that payment
in full will be escrowed in a manner customary for such purposes, the Custodian
agrees promptly to release to the related Servicer the related Mortgage File.
The Company shall deliver to the Custodian and the Custodian agrees to accept
the Mortgage Note and other documents constituting the Mortgage File with
respect to any Substitute Mortgage Loan.

                  From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy, the related Servicer shall deliver to the
Custodian a Request for Release signed by a Servicing Officer requesting that
possession of all of the Mortgage File be released to the related Servicer and
certifying as to the reason for such release and that such release will not
invalidate any insurance coverage provided in respect of the Mortgage Loan under
any of the Insurance Policies. Upon receipt of the foregoing, the Custodian
shall deliver the Mortgage File to the related Servicer. The related Servicer
shall cause each Mortgage File or any document therein so released to be
returned to the Custodian when the need therefor by the related Servicer no
longer exists, unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the related Servicer has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.

                                       G-3

<PAGE>

                  At any time that a Servicer is required to deliver to the
Custodian a Request for Release, the Servicer shall deliver two copies of the
Request for Release if delivered in hard copy or the Servicer may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release. In connection with any Request for Release of a Mortgage
File because of a repurchase of a Mortgage Loan, such Request for Release shall
be accompanied by an assignment of Mortgage, without recourse, from the Trustee
to the Mortgage Loan Seller and the related Mortgage Note shall be endorsed
without recourse by the Trustee and be returned to the Mortgage Loan Seller. In
connection with any Request for Release of a Mortgage File because of the
payment in full of a Mortgage Loan, such Request for Release shall be
accompanied by a certificate of satisfaction or other similar instrument to be
executed by or on behalf of the Trustee and returned to the related Servicer.

                  Section 2.6 ASSUMPTION AGREEMENTS. In the event that any
assumption agreement or substitution of liability agreement is entered into with
respect to any Mortgage Loan subject to this Agreement in accordance with the
terms and provisions of the Pooling and Servicing Agreement, the Master
Servicer, to the extent provided in the related Servicing Agreement, shall cause
the related Servicer to notify the Custodian that such assumption or
substitution agreement has been completed by forwarding to the Custodian the
original of such assumption or substitution agreement, which shall be added to
the related Mortgage File and, for all purposes, shall be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting parts thereof.

                                   ARTICLE III
                            CONCERNING THE CUSTODIAN

                  Section 3.1 CUSTODIAN A BAILEE AND AGENT OF THE TRUSTEE. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and agent of the Trustee and has no instructions to hold any Mortgage
Note or Mortgage for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. Except upon compliance with the
provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage or
Mortgage File shall be delivered by the Custodian to the Company, the Servicers
or the Master Servicer or otherwise released from the possession of the
Custodian.

                  Section 3.2   RESERVED.

                  Section 3.3 CUSTODIAN MAY OWN CERTIFICATES. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.

                  Section 3.4 MASTER SERVICER TO PAY CUSTODIAN'S FEES AND
EXPENSES. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the Custodian shall be entitled to, reasonable compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer will pay
or reimburse the Custodian upon its request for all reasonable expenses,
disbursements and advances

                                       G-4

<PAGE>

incurred or made by the Custodian in accordance with any of the provisions of
this Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ),
except any such expense, disbursement or advance as may arise from its
negligence or bad faith or to the extent that such cost or expense is
indemnified by the Company pursuant to the Pooling and Servicing Agreement.

                  Section 3.5 CUSTODIAN MAY RESIGN TRUSTEE MAY REMOVE CUSTODIAN.
The Custodian may resign from the obligations and duties hereby imposed upon it
as such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such notice of resignation, the Trustee shall either take
custody of the Mortgage Files itself and give prompt notice thereof to the
Company, the Master Servicer and the Custodian, or promptly appoint a successor
Custodian by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Custodian and one copy to the successor
Custodian. If the Trustee shall not have taken custody of the Mortgage Files and
no successor Custodian shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Custodian may petition any court of competent jurisdiction for the
appointment of a successor Custodian.

                  The Trustee may remove the Custodian at any time with the
consent of the Master Servicer. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority shall be able to
satisfy the other requirements contained in Section 3.7 and shall be
unaffiliated with the Servicer or the Company.

                  Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Company and the Master
Servicer of the appointment of any successor Custodian. No successor Custodian
shall be appointed by the Trustee without the prior approval of the Company and
the Master Servicer.

                  Section 3.6 MERGER OR CONSOLIDATION OF CUSTODIAN. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  Section 3.7 REPRESENTATIONS OF THE CUSTODIAN. The Custodian
hereby represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.

                                       G-5

<PAGE>

                                   ARTICLE IV
                            MISCELLANEOUS PROVISIONS

                  Section 4.1 NOTICES. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.

                  Section 4.2 AMENDMENTS. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto, and neither the Company, the Master
Servicer nor the Trustee shall enter into any amendment hereof except as
permitted by the Pooling and Servicing Agreement. The Trustee shall give prompt
notice to the Custodian of any amendment or supplement to the Pooling and
Servicing Agreement and furnish the Custodian with written copies thereof.

                  Section 4.3 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

                  Section 4.4 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 properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Company and at the Trust's expense on
direction by the Trustee, but only upon direction accompanied by an Opinion of
Counsel reasonably satisfactory to the Company to the effect that the failure to
effect such recordation is likely to materially and adversely affect the
interests of the Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  Section 4.5 SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.

                                       G-6

<PAGE>

                  IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.

Address:                                     BANK ONE, NATIONAL
                                             ASSOCIATION, as Trustee
153 West 51st St., 5th Floor
New York, New York 10019
                                             By:________________________________
Attention:                                   Name:
Telecopy:                                    Title:
Confirmation:
Address:                                     STRUCTURED ASSET MORTGAGE
                                             INVESTMENTS, INC.
383 Madison Avenue
New York, New York 10179
                                             By:________________________________
                                             Name:
                                             Title:

Address:                                     WELLS FARGO BANK MINNESOTA,
                                             NATIONAL ASSOCIATION, as Master
9062 Old Annapolis Road                      Servicer
Columbia, Maryland 21045

                                             By:________________________________
                                             Name:
                                             Title:

Address:                                     WELLS FARGO BANK MINNESOTA,
                                             NATIONAL ASSOCIATION, as Custodian
9062 Old Annapolis Road
Columbia, Maryland 21045                     By:________________________________
                                             Name:
                                             Title:

                                       G-7

<PAGE>

STATE OF                   )
                           )ss:
COUNTY OF                  )

                  On the __ day of _______ 20__ before me, a notary public in
and for said State, personally appeared _______________, known to me to be a
_________________of Bank One, National Association, a national banking
association 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

[SEAL]

                                       G-8

<PAGE>

STATE OF                       )
                               ) ss:
COUNTY OF                      )

                  On the __ day of ______ 20__ before me, a notary public in and
for said State, personally appeared _________________, known to me to be an
_______ of Wells Fargo Bank Minnesota, National Association, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national banking association, and
acknowledged to me that such national banking association executed the within
instrument.

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

                                                        ______________________
                                                             Notary Public
[SEAL]

                                       G-9

<PAGE>

STATE OF                            )
                                    )ss:
COUNTY OF                           )

                  On the __ day of _______ 20__ before me, a notary public in
and for said State, personally appeared _________________, known to me to be a
_________________ of Structured Asset Mortgage Investments Inc., one of the
corporations 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]

                                      G-10

<PAGE>

STATE OF                       )
                               )ss:
COUNTY OF                      )

                  On the __ day of _______ 20__ 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, one of the corporations 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]

                                      G-11

<PAGE>

                                                                     EXHIBIT H-1

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                           DATED OF AS JANUARY 1, 2002

                                      H-1-1

<PAGE>

                                                                     EXHIBIT H-2

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                           DATED OF AS JANUARY 1, 2002

                                      H-2-1

<PAGE>

                                                                     EXHIBIT H-3

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                            DATED OF AS MARCH 1, 2002

                                      H-3-1

<PAGE>

                                                                     EXHIBIT H-4

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                            DATED OF AS APRIL 1, 2002

                                      H-4-1

<PAGE>

                                                                     EXHIBIT H-5

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                            DATED OF AS APRIL 1, 2002

                                      H-5-1

<PAGE>

                                                                     EXHIBIT H-6

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                             DATED OF AS MAY 1, 2002

                                      H-6-1

<PAGE>

                                                                     EXHIBIT H-7

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                            DATED OF AS MAY 15, 2002

                                      H-7-1

<PAGE>

                                                                     EXHIBIT H-8

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                          DATED OF AS FEBRUARY 1, 2002

                                      H-8-1

<PAGE>

                                                                     EXHIBIT H-9

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                            DATED OF AS APRIL 1, 2002

                                      H-9-1

<PAGE>

                                                                    EXHIBIT H-10

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                             DATED OF AS MAY 1, 2002

                                     H-10-1

<PAGE>

                                                                    EXHIBIT H-11

             EMC MORTGAGE CORPORATION AND ALLIANCE MORTGAGE COMPANY
                               SERVICING AGREEMENT
                            DATED OF AS JUNE 1, 2002

                                     H-11-1

<PAGE>

                                                                       EXHIBIT I

                              ASSIGNMENT AGREEMENTS

                            (Available upon request)

                                       I-1

<PAGE>

                                                                       EXHIBIT J

                   MORTGAGE LOAN PURCHASE AGREEMENT AGREEMENT

                                       J-1

<PAGE>

                                                                       EXHIBIT K

                         SUBSEQUENT TRANSFER INSTRUMENT

         Pursuant to this Subsequent Transfer Instrument, dated June 4, 2002
(the "Instrument"), between Structured Asset Mortgage Investments Inc., as
seller (the "Seller"), and Bank One, National Association, as trustee of the
Structured Asset Mortgage Investments Trust 2002-AR2 Mortgage Pass-Through
Certificates, Series 2002-AR2, as purchaser (the "Trustee"), and pursuant to the
Pooling and Servicing Agreement, dated as of May 1, 2002 (the "Pooling and
Servicing Agreement"), among the Seller as the seller, Wells Fargo Bank
Minnesota, National Association, as Master Servicer and Securities
Administrator, EMC Mortgage Corporation and the Trustee as trustee, the Seller
and the Trustee agree to the sale by the Seller and the purchase by the Trustee
in trust, on behalf of the Trust, of the Subsequent Mortgage Loans listed on the
Schedule of Mortgage Loans attached to the Instrument as Exhibit 1 hereto (the
"Subsequent Mortgage Loans").

                           Capitalized terms used but not otherwise defined
herein shall have the meanings set forth in the Pooling and Servicing Agreement.

                           Section 1. CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.

                           (a) The Seller does hereby sell, transfer, assign,
set over and convey to the Trustee in trust, on behalf of the Trust, without
recourse, all of its right, title and interest in and to the Subsequent Mortgage
Loans, and including all amounts due on the Subsequent Mortgage Loans after the
related Subsequent Cut-off Date, and all items with respect to the Subsequent
Mortgage Loans to be delivered pursuant to Section 2.07 of the Pooling and
Servicing Agreement; provided, however that the Seller reserves and retains all
right, title and interest in and to amounts due on the Subsequent Mortgage Loans
on or prior to the related Subsequent Cut-off Date. The Seller,
contemporaneously with the delivery of this Agreement, has delivered or caused
to be delivered to the Trustee each item set forth in Section 2.01 of the
Pooling and Servicing Agreement. The transfer to the Trustee by the Seller of
the Subsequent Mortgage Loans identified on the Mortgage Loan Schedule shall be
absolute and is intended by the Seller, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Seller to
the Trust Fund.

                           (b) The Seller, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Seller, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated June 1, 2002, between EMC Mortgage
Corporation, as seller and the Seller, as purchaser (the "Purchase Agreement").

                           (c) Additional terms of the sale are set forth on
Attachment A hereto.

                                       K-1

<PAGE>

                           Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS
                                      PRECEDENT.

                           (a) The Seller hereby confirms that each of the
conditions precedent and the representations and warranties set forth in Section
2.07 of the Pooling and Servicing Agreement are satisfied as of the date hereof.

                           (b) All terms and conditions of the Pooling and
Servicing Agreement are hereby ratified and confirmed; provided, however, that
in the event of any conflict, the provisions of this Instrument shall control
over the conflicting provisions of the Pooling and Servicing Agreement.

                           Section 3. RECORDATION OF INSTRUMENT.

                           To the extent permitted by applicable law, this
Instrument, or a memorandum thereof if permitted under applicable law, is
subject to recordation in all appropriate public offices for real property
records in all of the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the Certificateholders' expense on direction
of the related Certificateholders, but only when accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders or is necessary for the administration
or servicing of the Subsequent Mortgage Loans.

                           Section 4. GOVERNING LAW.

                           This Instrument shall be construed in accordance with
the laws of the State of New York and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws, without
giving effect to principles of conflicts of law.

                           Section 5. COUNTERPARTS.

                           This Instrument may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same instrument.

                           Section 6. SUCCESSORS AND ASSIGNS.

                           This Instrument shall inure to the benefit of and be
binding upon the Seller and the Trustee and their respective successors and
assigns.

                                       K-2

<PAGE>

STRUCTURED ASSET MORTGAGE
INVESTMENTS INC., as Seller

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

BANK ONE, NATIONAL
ASSOCIATION, as Trustee.

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

                                       K-3

<PAGE>

                                    EXHIBIT 1

                             MORTGAGE LOAN SCHEDULE

                             (Provided Upon Request)

                                       K-4

<PAGE>

                                    EXHIBIT 1

                             MORTGAGE LOAN SCHEDULE

                             (Provided Upon Request)

                                       K-5================================================================================

                          AB MORTGAGE SECURITIES CORP.

                                    Company,

                            [NAME OF MASTER SERVICER]

                                Master Servicer,

                                       and

                               [NAME OF TRUSTEE],

                                     Trustee

                         POOLING AND SERVICING AGREEMENT
                         Dated as of_____________1, 200_

                       Mortgage Pass-Through Certificates
                                 Series 200_-__

<PAGE>

<TABLE>
<CAPTION>

                               TABLE OF CONTENTS

                                   ARTICLE I

                                  DEFINITIONS
<S>                                                                                          <C>
SECTION  1.01.    Defined Terms...............................................................2

                                   ARTICLE II

                         CONVEYANCE OF MORTGAGE LOANS;
                       ORIGINAL ISSUANCE OF CERTIFICATES

SECTION  2.01.    Conveyance of Mortgage Loans................................................25
SECTION  2.02.    Acceptance of the Trust Fund by the Trustee.................................28
SECTION  2.03.    Representations, Warranties and Covenants of the Master Servicer and the
                  Company.....................................................................29
SECTION  2.04.    Representations and Warranties of the Seller; Repurchase and
                  Substitution................................................................31
SECTION  2.05.    Issuance of Certificates Evidencing Interests in the Trust Fund.............33

                                  ARTICLE III

                 ADMINISTRATION AND SERVICING OF THE TRUST FUND

SECTION  3.01.    Master Servicer to Act as Master Servicer...................................34
SECTION  3.02.    Sub-Servicing Agreements Between Master Servicer and Sub-Servicers.
                   ...........................................................................35
SECTION  3.03.    Successor Sub-Servicers.....................................................36
SECTION  3.04.    Liability of the Master Servicer............................................36
SECTION  3.05.    No Contractual Relationship Between Sub-Servicers and  Trustee or
                  Certificateholders..........................................................36
SECTION  3.06.    Assumption or Termination of Sub-Servicing Agreements by  Trustee.
                   ...........................................................................37
SECTION  3.07.    Collection of Certain Mortgage Loan Payments................................37
SECTION  3.08.    Sub-Servicing Accounts......................................................37
SECTION  3.09.    Collection of Taxes, Assessments and Similar Items;  Servicing Accounts.
                   ...........................................................................38
SECTION  3.10.    Custodial Account...........................................................38
SECTION  3.11.    Permitted Withdrawals From the Custodial Account............................40
SECTION  3.12.    Permitted Instruments.......................................................41
SECTION  3.13.    Maintenance of Primary Mortgage Insurance and Primary Hazard
                  Insurance...................................................................41
SECTION  3.14.    Enforcement of Due-on-Sale Clauses; Assumption Agreements...................43

9.1] 00
                                      -i-

<PAGE>

SECTION  3.15.    Realization Upon Defaulted Mortgage Loans...................................44
SECTION  3.16.    Trustee to Cooperate; Release of Mortgage Files.............................45
SECTION  3.17.    Servicing Compensation......................................................46
SECTION  3.18.    Maintenance of Certain Servicing Policies...................................46
SECTION  3.19.    Annual Statement as to Compliance...........................................47
SECTION  3.20.    Annual Independent Public Accountants' Servicing Statement..................47
SECTION  3.21.    Access to Certain Documentation.............................................48
SECTION  3.22.    Title, Conservation and Disposition of REO Property.........................48
SECTION  3.23.    Additional Obligations of the Master Servicer...............................50
SECTION  3.24.    Additional Obligations of the Company.......................................51

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

SECTION  4.01.    Certificate Account; Distributions..........................................52
SECTION  4.02.    Statements to Certificateholders............................................55
SECTION  4.03.    Remittance Reports; Advances by the Master Servicer.........................57
SECTION  4.04.    Allocation of Realized Losses...............................................59
SECTION  4.05.    Information Reports to be Filed by the Master Servicer......................60
SECTION  4.06.    Compliance with Withholding Requirements....................................60

                                   ARTICLE V

                                THE CERTIFICATES

SECTION  5.01.    The Certificates............................................................61
SECTION  5.02.    Registration of Transfer and Exchange of Certificates.......................62
SECTION  5.03.    Mutilated, Destroyed, Lost or Stolen Certificates...........................66
SECTION  5.04.    Persons Deemed Owners.......................................................66

                                   ARTICLE VI

                       THE COMPANY AND THE MASTER SERVICER

SECTION  6.01.    Liability of the Company and the Master Servicer............................67
SECTION  6.02.    Merger, Consolidation or Conversion of the Company or the Master
                  Servicer....................................................................67
SECTION  6.03.    Limitation on Liability of the Company, the Master Servicer and Others.
                   ...........................................................................67
SECTION  6.04.    Limitation on Resignation of the Master Servicer............................68

                                      -ii-

<PAGE>

                                  ARTICLE VII

                                     DEFAULT
SECTION  7.01.    Events of Default...........................................................69
SECTION  7.02.    Trustee to Act; Appointment of Successor....................................71
SECTION  7.03.    Notification to Certificateholders..........................................72
SECTION  7.04.    Waiver of Events of Default.................................................72

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

SECTION  8.01.    Duties of Trustee...........................................................73
SECTION  8.02.    Certain Matters Affecting the Trustee.......................................74
SECTION  8.03.    Trustee Not Liable for Certificates or Mortgage Loans.......................75
SECTION  8.04.    Trustee May Own Certificates................................................75
SECTION  8.05.    Payment of Trustee's Fees...................................................75
SECTION  8.06.    Eligibility Requirements for Trustee........................................76
SECTION  8.07.    Resignation and Removal of the Trustee......................................76
SECTION  8.08.    Successor Trustee...........................................................77
SECTION  8.09.    Merger or Consolidation of Trustee..........................................78
SECTION  8.10.    Appointment of Co-Trustee or Separate Trustee...............................78

                                   ARTICLE IX

                                  TERMINATION

SECTION  9.01.    Termination Upon Repurchase or Liquidation of All Mortgage Loans.
                   ...........................................................................80
SECTION  9.02.    Additional Termination Requirements.........................................81

                                   ARTICLE X

                                REMIC PROVISIONS

SECTION  10.01.    REMIC Administration.......................................................83
SECTION  10.02.    Prohibited Transactions and Activities.....................................85
SECTION  10.03.    Master Servicer and Trustee Indemnification................................86

                                     -iii-

<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

SECTION  11.01.  Amendment.....................................................................87
SECTION  11.02.  Recordation of Agreement; Counterparts........................................88
SECTION  11.03.  Limitation on Rights of Certificateholders. ..................................88
SECTION  11.04.  Governing Law.................................................................89
SECTION  11.05.  Notices.......................................................................89
SECTION  11.06.  Severability of Provisions....................................................90
SECTION  11.07.  Successors and Assigns; Third Party Beneficiary...............................90
SECTION  11.08.  Article and Section Headings..................................................90
SECTION  11.09.  Notice to Rating Agencies and Certificateholder...............................90
</TABLE>

Exhibit A-1  Form of Class A Certificate
Exhibit A-2  Form of Class B Certificate
Exhibit B    Form of Class R Certificate
Exhibit C    Form of Trustee Initial Certification
Exhibit D    Form of Trustee Final Certification
Exhibit E    Form of Remittance Report
Exhibit F-1  Request for Release
Exhibit F-2  Request for Release for Mortgage Loans Paid in Full
Exhibit G-1  Form of Investor Representation Letter
Exhibit G-2  Form of Transferor Representation Letter
Exhibit G-3  Transferor Affidavit and Agreement in connection with transfer of
             Residual Certificates
Exhibit G-4  Form of Transferor Certificate
Exhibit G-5  Form of Investor Representation Letter for Insurance Companies
Exhibit H    Mortgage Loan Schedule
Exhibit I    Seller's Warranty Certificate
Exhibit J    Form of Notice Under Section 3.24

                                      -iv-

<PAGE>

                  This Pooling and Servicing Agreement, effective as of
_______________ 1, 200_, among AB MORTGAGE SECURITIES CORP., as the company
(together with its permitted successors and assigns, the "Company"), [NAME OF
MASTER SERVICER], as master servicer (together with its permitted successors and
assigns, the "Master Servicer"), and [NAME OF TRUSTEE], as trustee (together
with its permitted successors and assigns, the "Trustee"),

                             PRELIMINARY STATEMENT:

                  The Company intends to sell mortgage pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes
(each, a "Class"), which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein). As provided
herein, the Master Servicer will make an election to treat the segregated pool
of assets described in the definition of Trust Fund (as defined herein), and
subject to this Agreement (including the Mortgage Loans but excluding the
Initial Monthly Payment Deposit), as a real estate mortgage investment conduit
(a "REMIC") for federal income tax purposes, and such segregated pool of assets
will be designated as the "Trust Fund." The Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7 and Class B Certificates will
represent ownership of "regular interests" in the Trust Fund, and the Class R
Certificates will be the sole class of "residual interests" therein, for
purposes of the REMIC Provisions (as defined herein) under federal income tax
law.

                  The following table sets forth the designation, type,
Pass-Through Rate, aggregate Initial Certificate Principal Balance, initial
ratings and certain features for each Class of Certificates comprising the
interests in the Trust Fund created hereunder.

                       AGGREGATE INITIAL PASS-CERTIFICATE
               INITIAL RATINGS THROUGH PRINCIPAL DESCRIPTION TYPE
                              RATE BALANCE FEATURES

                               [INSERT TABLE HERE]

                  The Mortgage Loans have an aggregate Stated Principal Balance
as of the Cut-off Date equal to $___________. The Mortgage Loans are fixed rate
mortgage loans having terms to maturity at origination or modification of not
more than 30 years.

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

                                       -1-

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION  1.01.    Defined Terms.

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

                  "Accrued Certificate Interest": With respect to each
Distribution Date, as to any Class A Certificate (other than the Class A-5
Certificates and Class A-7 Certificates) or any Class B Certificate, one month's
interest accrued at the then applicable Pass-Through Rate on the Certificate
Principal Balance thereof immediately prior to such Distribution Date. With
respect to each Distribution Date, as to the Class A-5 Certificates and Class
A-7 Certificates, one month's interest accrued at the then applicable
Pass-Through Rate on the Notional Amount thereof immediately prior to such
Distribution Date. Accrued Certificate Interest will be calculated on the basis
of a 360-day year consisting of twelve 30-day months. In each case Accrued
Certificate Interest on any Class of Certificates will be reduced by the amount
of (i) Prepayment Interest Shortfalls, if any, which are not covered by payments
by the Master Servicer pursuant to Section 3.23 with respect to such
Distribution Date, (ii) the interest portion (adjusted to the related Net
Mortgage Rate) of any of Realized Losses (including Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses and Extraordinary Losses)
not allocated solely to one or more specific Classes of Certificates pursuant to
Section 4.04 (which, with respect to the pro rata portion thereof allocated to
the Class A-1, Class A-5 and Class A-6 Certificates will be allocated first to
the Class A-6 Certificates and second to the Class A-1 and Class A-5
Certificates on a pro rata basis to the extent such Realized Losses are Default
Losses), (iii) the interest portion of Advances previously made with respect to
a Mortgage Loan or REO Property which remained unreimbursed following the Cash
Liquidation or REO Disposition of such Mortgage Loan or REO Property that was
made with respect to delinquencies that were ultimately determined to be Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses, and (iv) any other interest shortfalls not covered by the
subordination provided by the Class B Certificates pursuant to Section 4.04,
including interest that is not collectible from the Mortgagor pursuant to the
Relief Act or similar legislation or regulations as in effect from time to time;
with all such reductions allocated among the Classes of Certificates, in
proportion to their respective amounts of Accrued Certificate Interest which
would have resulted absent such reductions. In addition to that portion of the
reductions described in the preceding sentence, Accrued Certificate Interest on
the Class B Certificates will be reduced by the interest portion (adjusted to
the related Net Mortgage Rate) of Realized Losses that are allocated solely to
the Class B Certificates pursuant to Section 4.04.

                  "Advance": As to any Mortgage Loan, any advance made by the
Master Servicer on any Distribution Date pursuant to Section 4.03.

                  "Agreement": This Pooling and Servicing Agreement and all
amendments hereof.

                                       -2-

<PAGE>

                  "Anniversary":  Each anniversary of _____________ 1, 20__.

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

                  "Assignment Agreement": The Assignment and Assumption
Agreement, dated as of ____________, 200_, between [Name of Seller] and the
Company relating to the transfer and assignment of the Mortgage Loans.

                  "Available Distribution Amount": With respect to each
Distribution Date, the Available Distribution Amount will be an amount equal to
(a) the sum of (i) the balance on deposit in the Custodial Account as of the
close of business on the related Determination Date and (ii) the aggregate
amount of any Advances made, all required amounts pursuant to Section 3.22 and
all amounts required to be paid by the Master Servicer pursuant to Sections 3.13
and 3.23 by deposits into the Certificate Account on the immediately preceding
Certificate Account Deposit Date, reduced by (b) the sum, as of the close of
business on the related Determination Date of (i) Monthly Payments collected but
due during a Due Period subsequent to the Due Period ending on the first day of
the month of the related Distribution Date, (ii) all interest or other income
earned on deposits in the Custodial Account, (iii) any other amounts
reimbursable or payable to the Master Servicer or any other Person pursuant to
Section 3.11, (iv) Insurance Proceeds, Liquidation Proceeds, Principal
Prepayments, REO Proceeds and the proceeds of Mortgage Loan purchases (or
amounts received in connection with substitutions) made pursuant to Section 2.02
and 2.04, in each case received or made in the month of such Distribution Date
and (v) the Trustee's Fee.

                  "Bankruptcy Amount": As of any date of determination, an
amount, equal to the excess, if any, of (A) $_______, over (B) the aggregate
amount of Bankruptcy Losses allocated solely to one or more specific Classes of
Certificates in accordance with Section 4.04.

                  The Bankruptcy Amount may be further reduced by the Master
Servicer (including accelerating the manner in which such coverage is reduced)
provided that prior to any such reduction, the Master Servicer shall (i) obtain
written confirmation from each Rating Agency that such reduction shall not
reduce the rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency and (ii) provide a
copy of such written confirmation to the Trustee.

                  "Bankruptcy Code": The United States Bankruptcy Code of 1978,
as amended.

                                       -3-

<PAGE>

                  "Bankruptcy Loss": With respect to any Mortgage Loan, a
Deficient Valuation or Debt Service Reduction; provided, however, that a
Deficient Valuation or a Debt Service Reduction shall not be deemed a Bankruptcy
Loss hereunder so long as the Master Servicer has notified the Trustee in
writing that the Master Servicer is diligently pursuing any remedies that may
exist in connection with the related Mortgage Loan and either (A) the related
Mortgage Loan is not in default with regard to payments due thereunder or (B)
delinquent payments of principal and interest under the related Mortgage Loan
and any related escrow payments in respect of such Mortgage Loan are being
advanced on a current basis by the Master Servicer, in either case without
giving effect to any Deficient Valuation or Debt Service Reduction.

                  "Business Day": Any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking institutions in the State of ______________ or
the State of ______________ (and such other state or states in which the
Custodial Account or the Certificate Account are at the time located) are
required or authorized by law or executive order to be closed.

                  "Cash Liquidation": As to any defaulted Mortgage Loan other
than a Mortgage Loan as to which an REO Acquisition occurred, the final receipt
by or on behalf of the Master Servicer of all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.

                  "Certificate":  Any Class A, Class B or Class R Certificate.

                  "Certificate Account": The account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled
"___________________________________, as trustee, in trust for the registered
holders of AB Mortgage Securities Corp., Mortgage Pass-Through Certificates,
Series 200_-__" and which must be an Eligible Account.

                  "Certificate Account Deposit Date": The 20th day (or if such
20th day is not a Business Day, the Business Day immediately preceding such 20th
day) of the month.

                  "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that, neither a
Disqualified Organization nor a Non-United States Person shall be a Holder of a
Class R Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Company or the Master Servicer or any affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee shall be entitled to rely upon
a certification of the Company or the Master Servicer in determining if any
Certificates are registered in the name of a respective affiliate.

                                       -4-

<PAGE>

                  "Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate, as reflected on the
books of an indirect participating brokerage firm for which a Company
Participant acts as agent, if any, and otherwise on the books of a Company
Participant, if any, and otherwise on the books of the Company.

                  "Certificate Principal Balance": With respect to each Class A
Certificate (other than a Class A-5 Certificate or Class A-7 Certificate), on
any date of determination, an amount equal to (i) the Initial Certificate
Principal Balance of such Certificate as specified on the face thereof, minus
(ii) the sum of (x) the aggregate of all amounts previously distributed with
respect to such Certificate (or any predecessor Certificate) and applied to
reduce the Certificate Principal Balance thereof pursuant to Section 4.02(b) and
(y) the aggregate of all reductions in Certificate Principal Balance deemed to
have occurred in connection with Realized Losses which were previously allocated
to such Certificate (or any predecessor Certificate) pursuant to Section 4.04.
With respect to the Class B Certificates, on any date of determination, an
amount equal to the Percentage Interest evidenced by such Certificate times the
excess, if any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans over (B) the then aggregate Certificate Principal Balance of all
other Classes of Certificates then outstanding. The Class A-5 Certificates,
Class A-7 Certificates and Class R Certificates have no Certificate Principal
Balance.

                  "Certificate Register": The register maintained pursuant to
Section 5.02.

                  "Class": Collectively, all of the Certificates bearing the
same designation.

                  "Class A Certificate": Any one of the Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class A-6 or Class A-7 Certificates, executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit A-1, each such Certificate evidencing an
interest designated as a "regular interest" in the Trust Fund for purposes of
the REMIC Provisions.

                  "Class B Certificate": The Class B Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A-2 and evidencing an interest designated as a
"regular interest" in the Trust Fund for purposes of the REMIC Provisions.

                  "Class B Percentage": With respect to any Distribution Date,
the lesser of (i) 100% minus the Senior Percentage and (ii) a fraction,
expressed as a percentage, the numerator of which is the aggregate Certificate
Principal Balance of the Class B Certificates immediately prior to such date and
the denominator of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans (or related REO Properties) immediately prior to such
Distribution Date.

                  "Class R Certificate": Any one of the Class R Certificates
executed and delivered by the Trustee substantially in the form annexed hereto
as Exhibit B and evidencing an interest designated as a "residual interest" in
the REMIC for purposes of the REMIC Provisions.

                                       -5-

<PAGE>

                  "Closing Date" : _______________ ___, 20__.

                  "Code":   The Internal Revenue Code of 1986.

                  "Collateral Value": The appraised value of a Mortgaged
Property based upon the lesser of (i) the appraisal made at the time of the
origination of the related Mortgage Loan, or (ii) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
appraised value of the Mortgaged Property based upon the appraisal (as reviewed
and approved by the Seller) obtained at the time of refinancing.

                  "Company": AB Mortgage Securities Corp., or its successor in
interest.

                  "Corporate Trust Office": The principal office of the Trustee
at which at any particular time its corporate trust business with respect to
this Agreement shall be administered, which office at the date of the execution
of this instrument is located at _____________________, Attention:
__________________ Series 200_-__.

                  "Credit Support Depletion Date": The first Distribution Date
on which the Senior Percentage equals 100%.

                  "Custodial Account": The custodial account or accounts created
and maintained pursuant to Section 3.10 in a depository institution, as
custodian for the holders of the Certificates, for the holders of certain other
interests in mortgage loans serviced or sold by the Master Servicer and for the
Master Servicer, into which the amounts set forth in Section 3.10 shall be
deposited directly. Any such account or accounts shall be an Eligible Account.

                  "Cut-off Date":  _____________ 1, 200_.

                  "Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.

                  "Default Loss": Any Realized Loss that is attributable to the
related Mortgagor's failure to make any payment of principal or interest as
required under the Mortgage Note, excluding Special Hazard Losses (or any other
loss resulting from damage to a Mortgaged Property), Bankruptcy Losses, Fraud
Losses, or other losses of a type not covered by the subordination provided by
the Class B Certificates pursuant to Section 4.04.

                  "Deficient Valuation": With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding

                                       -6-

<PAGE>

indebtedness under the Mortgage Loan, which valuation results from a proceeding
initiated by the Mortgagor under the Bankruptcy Code.

                  "Definitive Certificate": Any definitive, fully registered
Certificate.

                  "Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced with a Qualified Substitute Mortgage Loan.

                  "Determination Date": The 15th day (or if such 15th day is not
a Business Day, the Business Day immediately preceding such 15th day) of the
month of the related Distribution Date.

                  "Disqualified Organization": Any of the following: (i) the
United States, any State or any 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 FHLMC, a majority of its board of
directors is not selected by any such governmental unit), (ii) a foreign
government, international organization or any agency or instrumentality of
either the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from tax
imposed by Chapter 1 of the Code (unless such organization is subject to the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381 of the Code
or (v) any other Person so designated by the Trustee based on an Opinion of
Counsel obtained by the Trustee, at the expense of the Trust Fund, (which
opinion shall be sought only if the Trustee has actual knowledge that the
holding of an Ownership Interest in a Class R Certificate by such Person may
cause the Trust Fund or any Person having an Ownership Interest in any Class of
Certificates, 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 Class R Certificate to such Person). The terms
"United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day commencing on _______ 25, 20__.

                  "Due Date": The first day of the month of the related
Distribution Date.

                  "Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month preceding the month of such
Distribution Date (or, with respect to the first Due Period, the day following
the Cut-off Date) and ending on the related Due Date.

                  ["Duff & Phelps": Duff & Phelps Credit Rating Company or its
successor in interest.]

                  "Eligible Account": An account maintained with a federal or
state chartered depository institution (i) the short-term obligations of which
are rated by each of the Rating Agencies

                                       -7-

<PAGE>

in its highest rating at the time of any deposit therein, or (ii) insured by the
FDIC (to the limits established by such Corporation), the uninsured deposits in
which account are otherwise secured such that, as evidenced by an Opinion of
Counsel (obtained by and at the expense of the Person requesting that the
account be held pursuant to this clause (ii)) delivered to the Trustee prior to
the establishment of such account, the Certificateholders will have a claim with
respect to the funds in such account and a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Instruments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of
investment in such collateral or the Distribution Date if such Permitted
Instrument is an obligation of the institution that maintains the Certificate
Account or Custodial Account) securing such funds that is superior to claims of
any other depositors or general creditors of the depository institution with
which such account is maintained or (iii) a trust account or accounts maintained
with a federal or state chartered depository institution or trust company with
trust powers acting in its fiduciary capacity or (iv) an account or accounts of
a depository institution acceptable to the Rating Agencies (as evidenced in
writing by the Rating Agencies that use of any such account as the Custodial
Account or the Certificate Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by
the Rating Agencies). Eligible Accounts may bear interest.

                  "Event of Default": One or more of the events described in
Section 7.01.

                  "Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion
thereof, which exceeds the then applicable Bankruptcy Amount.

                  "Excess Fraud Loss": Any Fraud Loss, or portion thereof, which
exceeds the then applicable Fraud Loss Amount.

                  "Excess Special Hazard Loss": Any Special Hazard Loss, or
portion thereof, that exceeds the then applicable Special Hazard Amount.

                  "Extraordinary Events": Any of the following conditions with
respect to a Mortgaged Property or Mortgage Loan causing or resulting in a loss
which causes the liquidation of such Mortgage Loan:

                  (a) losses that are of a type that would be covered by the
fidelity bond and the errors and omissions insurance policy required to be
maintained pursuant to Section 3.18 but are in excess of the coverage maintained
thereunder;

                  (b) nuclear reaction or nuclear radiation or radioactive
contamination, all whether controlled or uncontrolled, and whether such loss be
direct or indirect, proximate or remote or be in whole or in part caused by,
contributed to or aggravated by a peril covered by the definition of the term
"Special Hazard Loss";

                                       -8-

<PAGE>

                  (c) hostile or warlike action in time of peace or war,
including action in hindering, combatting or defending against an actual,
impending or expected attack:

                  1. by any government or sovereign power, de jure or de facto,
or by any authority maintaining or using military, naval or air forces; or

                  2. by military, naval or air forces; or

                  3. by an agent of any such government, power, authority or
forces;

                  (d) any weapon of war employing atomic fission or radioactive
force whether in time of peace or war; or

                  (e) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combatting or
defending against such an occurrence, seizure or destruction under quarantine or
customs regulations, confiscation by order of any government or public
authority; or risks of contraband or illegal transportation or trade.

                  "Extraordinary Losses": Any loss incurred on a Mortgage Loan
caused by or resulting from an Extraordinary Event.

                  "FDIC": Federal Deposit Insurance Corporation or any
successor.

                  "FHLMC": Federal Home Loan Mortgage Corporation or any
successor.

                  ["Fitch": Fitch Investors Service, Inc., or its successor in
interest.]

                  "FNMA": Federal National Mortgage Association or any
successor.

                  "Fraud Losses": Any Realized Loss sustained by reason of a
default arising from fraud, dishonesty or misrepresentation in connection with
the related Mortgage Loan.

                  "Fraud Loss Amount": As of any date of determination after the
Cut-off Date, an amount equal to: (X) up to and including the [first]
anniversary of the Cut-off Date an amount equal to ______% of the aggregate
outstanding principal balance of all of the Mortgage Loans as of the Cut-off
Date minus the aggregate amount of Fraud Losses allocated to the Class B
Certificates in accordance with Section 4.04 since the Cut-off Date up to such
date of determination, (Y) from the [first] to the fifth anniversary of the
Cut-off Date, an amount equal to (1) the lesser of (a) the Fraud Loss Amount as
of the most recent anniversary of the Cut-off Date and (b) ______% of the
aggregate outstanding principal balance of all of the Mortgage Loans as of the
most recent anniversary of the Cut-off Date minus (2) the Fraud Losses allocated
solely to the Class B Certificates in accordance with Section 4.04 since the
most recent anniversary of the Cut-off Date up to such date of

                                       -9-

<PAGE>

determination. On and after the fifth anniversary of the Cutoff Date the Fraud
Loss Amount shall be zero.

                  The Fraud Loss Amount may be further reduced by the Master
Servicer (including accelerating the manner in which such coverage is reduced)
provided that prior to any such reduction, the Master Servicer shall (i) obtain
written confirmation from each Rating Agency that such reduction shall not
reduce the rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency and (ii) provide a
copy of such written confirmation to the Trustee.

                  "Funding Date": With respect to each Mortgage Loan, the date
on which funds were advanced by or on behalf of the Seller and interest began to
accrue thereunder.

                  "Initial Certificate Principal Balance": With respect to each
Class of Certificates, the Certificate Principal Balance of such Class of
Certificates as of the Cut-off Date as set forth in the Preliminary Statement
hereto.

                  "Insurance Policy": With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement in respect of such Mortgage Loan.

                  "Insurance Proceeds": Proceeds paid by any insurer pursuant to
the Primary Mortgage Insurance Policy and any other insurance policy covering a
Mortgage Loan to the extent such proceeds are not applied to the restoration of
the related Mortgaged Property or released to the Mortgagor in accordance with
the procedures that the Master Servicer would follow in servicing mortgage loans
held for its own account.

                  "Late Collections": With respect to any Mortgage Loan, all
amounts received during any Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of Monthly Payments due but delinquent
for a previous Due Period and not previously recovered.

                  "Liquidation Proceeds": Amounts (other than Insurance
Proceeds) received by the Master Servicer in connection with the taking of an
entire Mortgaged Property by exercise of the power of eminent domain or
condemnation or in connection with the liquidation of a defaulted Mortgage Loan
through trustee's sale, foreclosure sale or otherwise, other than amounts
received in respect of REO Property.

                  "Loan-to-Value Ratio": As of any date, the fraction, expressed
as a percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Collateral Value of the related Mortgaged Property.

                                      -10-

<PAGE>

                  "Master Servicer": [Name of Master Servicer], or any successor
master servicer appointed as herein provided.

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by a Mortgagor from time to time under the related Mortgage Note as
originally executed (after adjustment, if any, for Principal Prepayments and for
Deficient Valuations occurring prior to such Due Date, and after any adjustment
by reason of any bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period).

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

                  "Mortgage": The mortgage, deed of trust or any other
instrument securing the Mortgage Loan.

                  "Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement; provided, that
whenever the term "Mortgage File" is used to refer to documents actually
received by the Trustee, such term shall not be deemed to include such
additional documents required to be added unless they are actually so added.

                  "Mortgage Loan": Each of the mortgage loans, transferred and
assigned to the Trustee pursuant to Section 2.01 or Section 2.03 and from time
to time held in the Trust Fund, the Mortgage Loans originally so transferred,
assigned and held being identified in the Mortgage Loan Schedule attached hereto
as Exhibit H (and any Qualified Substitute Mortgage Loans). As used herein, the
term "Mortgage Loan" includes the related Mortgage Note and Mortgage.

                  "Mortgage Loan Schedule": As of any date of determination, the
schedule of Mortgage Loans included in the Trust Fund. The initial schedule of
Mortgage Loans with accompanying information transferred on the Closing Date to
the Trustee as part of the Trust Fund for the Certificates, attached hereto as
Exhibit H (as amended from time to time to reflect the addition of Qualified
Substitute Mortgage Loans) (and, for purposes of the Trustee's review of the
Mortgage Files pursuant to Section 2.02, in computer-readable form as delivered
to the Trustee), which list shall set forth the following information, if
applicable, with respect to each Mortgage Loan:

                  (i)      the loan number and name of the Mortgagor;

                  (ii)     the street address, city, state and zip code of the
         Mortgaged Property;

                  (iii)    the Mortgage Rate;

                  (iv)     the maturity date;

                                      -11-

<PAGE>

                  (v)      the original principal balance;

                  (vi)     the first payment date;

                  (vii)    the type of Mortgaged Property;

                  (viii)   the Monthly Payment in effect as of the Cut-off Date;

                  (ix)     the principal balance as of the Cut-off Date;

                  (x)      the occupancy status;

                  (xi)     the purpose of the Mortgage Loan;

                  (xii)    the Collateral Value of the Mortgaged Property;

                  (xiii)   the original term to maturity;

                  (xiv)    the paid-through date of the Mortgage Loan;

                  (xv)     the Loan-to-Value Ratio; and

                  (xvi)    whether or not the Mortgage Loan was underwritten
         pursuant to a limited documentation program.

                  The Mortgage Loan Schedule shall also set forth the total of
the amounts described under (ix) above for all of the Mortgage Loans. The
Mortgage Loan Schedule may be in the form of more than one schedule,
collectively setting forth all of the information required. With respect to any
Qualified Substitute Mortgage Loan, the item described in clauses (viii) shall
be set forth as the date of substitution.

                  "Mortgage Note": The note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.

                  "Mortgage Rate": With respect to any Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan. "Mortgaged Property": The
underlying property securing a Mortgage Loan.

                  "Mortgagor":    The obligor or obligors on a Mortgage Note.

                                      -12-

<PAGE>

                  "Net Mortgage Rate": As to each Mortgage Loan, a per annum
rate of interest equal to the related Mortgage Rate as in effect from time to
time minus the sum of the Servicing Fee Rate and the rate at which the Trustee's
Fee accrues.

                   "Nonrecoverable Advance": Any Advance previously made or
proposed to be made in respect of a Mortgage Loan which, in the good faith
judgment of the Master Servicer, will not or, in the case of a proposed Advance,
would not be ultimately recoverable from related Late Collections, Insurance
Proceeds, Liquidation Proceeds, REO Proceeds or amounts reimbursable to the
Master Servicer pursuant to Section 4.01(b). The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed Advance
would constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered to the Company and the Trustee.

                  "Non-United States Person": Any Person other than a United
States Person.

                  "Notional Amount": As of any Distribution Date, with respect
to the Class A-5 Certificates and the Class A-7 Certificates, an amount equal to
the aggregate Certificate Principal Balance of all Classes of Certificates
immediately prior to such date.

                  "Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
and by the Treasurer, the Secretary, or one of the assistant treasurers or
assistant secretaries of the Master Servicer or of the Sub-Servicer and
delivered to the Company and Trustee.

                  "Opinion of Counsel": A written opinion of counsel, who may be
counsel for the Company or the Master Servicer, reasonably acceptable to the
Trustee; except that any opinion of counsel relating to (a) the qualification of
any account required to be maintained pursuant to this Agreement as an Eligible
Account, (b) qualification of the Trust Fund as a REMIC, (c) compliance with the
REMIC Provisions or (d) resignation of the Master Servicer pursuant to Section
6.04 must be an opinion of counsel who (i) is in fact independent of the Company
and the Master Servicer, (ii) does not have any direct financial interest or any
material indirect financial interest in the Company or the Master Servicer or in
an affiliate of either and (iii) is not connected with the Company or the Master
Servicer as an officer, employee, director or person performing similar
functions.

                  "Optimal Percentage": A fraction, expressed as a percentage,
the numerator of which is the Certificate Principal Balance of the Class A-1
Certificates immediately prior to the applicable Distribution Date and the
denominator of which is the aggregate Certificate Principal Balance of all of
the Class A Certificates immediately prior to such Distribution Date.

                  "Optimal Principal Distribution Amount": An amount equal to
the product of (i) the then applicable Optimal Percentage and (ii) the Senior
Principal Distribution Amount.

                  "Original Senior Percentage": _______%, which is the fraction,
expressed as a percentage, the numerator of which is the aggregate Initial
Certificate Principal Balance of the Class

                                      -13-

<PAGE>

A Certificates and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans.

                  "OTS":    Office of Thrift Supervision or any successor.

                  "Outstanding Mortgage Loan": As to any Due Date, a Mortgage
Loan (including an REO Property) which was not the subject of a Principal
Prepayment in full, Cash Liquidation or REO Disposition and which was not
purchased or substituted for prior to such Due Date pursuant to Sections 2.02 or
2.04.

                  "Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.

                  "Pass-Through Rate": With respect to the Class A Certificates
(other than the Class A-7 Certificates) and Class B Certificates and any
Distribution Date, the per annum rate set forth in the Preliminary Statement
hereto. With respect to the Class A-7 Certificates and any Distribution Date, a
rate equal to the weighted average, expressed as a percentage, of the Pool Strip
Rates of all Mortgage Loans in the Trust Fund as of the Due Date in the month
immediately preceding the month in which such Distribution Date occurs, weighted
on the basis of the respective Stated Principal Balances of such Mortgage Loans,
which Stated Principal Balances shall be the Stated Principal Balances of such
Mortgage Loans at the close of business on the immediately preceding
Distribution Date after giving effect to the distributions thereon allocable to
principal (or, in the case of the initial Distribution Date, at the close of
business on the Cut-off Date). With respect to the Class A-7 Certificates and
the initial Distribution Date, the Pass-Through Rate is equal to ______% per
annum.

                  "Percentage Interest": With respect to any Certificate (other
than a Class A-5, Class A-7 or Class R Certificate), the undivided percentage
ownership interest in the related Class evidenced by such Certificate, which
percentage ownership interest shall be equal to the initial Certificate
Principal Balance thereof divided by the aggregate Initial Certificate Principal
Balance of all of the Certificates of the same Class. With respect to a Class
A-5 or Class A-7 Certificate, the undivided percentage ownership interest in the
related Class evidenced by such Certificate, which percentage ownership interest
shall be equal to the initial Notional Amount thereof divided by the aggregate
initial Notional Amount of all of the Certificates of the same Class. With
respect to a Class R Certificate, the interest in distributions to be made with
respect to such Class evidenced thereby, expressed as a percentage, as stated on
the face of each such Certificate.

                  "Permitted Instruments":    Any one or more of the following:

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

                                      -14-

<PAGE>

         obligations of, and obligations guaranteed as to timely payment by
         FHLMC or FNMA if, at the time of investment, they are assigned the
         highest credit rating by the Rating Agencies;

                  (ii) repurchase obligations (the collateral for which is held
         by a third party or the Trustee) with respect to any security described
         in clause (i) above, provided that the short-term unsecured obligations
         of the party agreeing to repurchase such obligations are at the time
         rated by each Rating Agency in one of its two highest long-term rating
         categories;

                  (iii) certificates of deposit, time deposits, demand deposits
         and bankers' acceptances of any bank or trust company incorporated
         under the laws of the United States or any state thereof or the
         District of Columbia, provided that the short-term commercial paper of
         such bank or trust company (or, in the case of the principal depository
         institution in a depository institution holding company, the long-term
         unsecured debt obligations of the depository institution holding
         company) at the date of acquisition thereof has been rated by each
         Rating Agency in its highest short-term rating;

                  (iv) commercial paper (having original maturities of not more
         than nine months) of any corporation incorporated under the laws of the
         United States or any state thereof or the District of Columbia which on
         the date of acquisition has been rated by each Rating Agency in its
         highest short- term rating;

                  (v)      a money market fund or a qualified investment fund
         rated by each Rating Agency in its highest rating available; and

                  (vi) if previously confirmed in writing to the Trustee, any
         other obligation or security acceptable to each Rating Agency in
         respect of mortgage pass-through certificates rated in each Rating
         Agency's highest rating category;

provided, that no such instrument shall be a Permitted Instrument if such
instrument evidences either (a) the right to receive interest only payments with
respect to the obligations underlying such instrument or (b) both principal and
interest payments derived from obligations underlying such instrument where the
principal and interest payments with respect to such instrument provide a yield
to maturity exceeding 120% of the yield to maturity at par of such underlying
obligation.

                  "Permitted Transferee": Any transferee of a Class R
Certificate other than a Disqualified Organization or a Non-United States
Person.

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

                  "Pool Strip Rate": With respect to each Mortgage Loan, the
rate per annum equal to the Net Mortgage Rate thereon minus _____% per annum.

                                      -15-

<PAGE>

                  "Prepayment Assumption": A prepayment assumption of _____% of
the standard prepayment assumption, used for determining the accrual of original
issue discount and market discount and premium on the Certificates for federal
income tax purposes. The standard prepayment assumption assumes a constant rate
of prepayment of mortgage loans of 0.2% per annum of the then outstanding
principal balance of such mortgage loans in the first month of the life of the
mortgage loans, increasing by an additional 0.2% per annum in each succeeding
month until the thirtieth month, and a constant 6% per annum rate of prepayment
thereafter for the life of such mortgage loans.

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a partial
Principal Prepayment, a Principal Prepayment in full, or of a Cash Liquidation
or an REO Disposition during the related Prepayment Period, an amount equal to
the amount of interest that would have accrued at the applicable Net Mortgage
Rate (i) in the case of a Principal Prepayment in full, Cash Liquidation or REO
Disposition on the principal balance of such Mortgage Loan immediately prior to
such prepayment (or liquidation), commencing on the date of prepayment (or
liquidation) and ending on the last day of the month of prepayment or
liquidation or (ii) in the case of a partial Principal Prepayment, on the amount
of such prepayment, commencing on the date as of which the prepayment is applied
and ending on the last day of the month of prepayment.

                  "Prepayment Period": As to any Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs.

                  "Primary Hazard Insurance Policy": Each primary hazard
insurance policy required to be maintained pursuant to Section 3.13.

                  "Primary Mortgage Insurance Policy": Each primary mortgage
insurance policy required to be maintained pursuant to Section 3.13.

                  "Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment.

                  "Purchase Price": With respect to any Mortgage Loan (or REO
Property) required to be purchased pursuant to Section 2.02 or 2.04, an amount
equal to the sum of (i) 100% of the Stated Principal Balance thereof, (ii)
unpaid accrued interest (or REO Imputed Interest) at the sum of the applicable
Net Mortgage Rate, the rate at which the Trustee's Fee accrues on the Stated
Principal Balance thereof outstanding during each Due Period that such interest
was not paid or advanced, from the date through which interest was last paid by
the Mortgagor or advanced and distributed to Certificateholders together with
unpaid related Servicing Fees from the date through which interest was last paid
by the Mortgagor, in each case to the first day of the month in which

                                      -16-

<PAGE>

such Purchase Price is to be distributed, plus (iii) the aggregate of all
Advances made in respect thereof that were not previously reimbursed.

                  "Qualified Insurer": An insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact business in such states and to write the insurance provided by the
insurance policy issued by it, approved as an insurer by the Master Servicer, as
a FNMA approved mortgage insurer and having a claims paying ability rating of at
least "AA" by ________________ and which is acceptable to _______________. Any
replacement insurer with respect to a Mortgage Loan must have at least as high a
claims paying ability rating by ______________ and _______________ as the
insurer it replaces had on the Closing Date.

                  "Qualified Substitute Mortgage Loan": A Mortgage Loan
substituted by the Company for a Deleted Mortgage Loan which must, on the date
of such substitution, as confirmed in an Officers' Certificate delivered to the
Trustee, (i) have an outstanding principal balance, after deduction of the
principal portion of the monthly payment due in the month of substitution (or in
the case of a substitution of more than one Mortgage Loan for a Deleted Mortgage
Loan, an aggregate outstanding principal balance, after such deduction), not in
excess of the Stated Principal Balance of the Deleted Mortgage Loan (the amount
of any shortfall to be deposited by the Master Servicer, in the Custodial
Account in the month of substitution); (ii) have a Mortgage Rate and a Net
Mortgage Rate no lower than and not more than 1% per annum higher than the
Mortgage Rate and Net Mortgage Rate, respectively, of the Deleted Mortgage Loan
as of the date of substitution; (iii) have a remaining term to stated maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan; (iv) comply with each representation and warranty set forth in
Section 2 of the Seller's Warranty Certificate; (v) have a Loan-to-Value Ratio
as of the date of substitution equal to or lower than the Loan-to-Value Ratio of
the Deleted Mortgage Loan as of such date; and (vi) be covered under a Primary
Insurance Policy if such Qualified Substitute Mortgage Loan has a Loan-to-Value
Ratio in excess of 80%. In the event that one or more mortgage loans are
substituted for one or more Deleted Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Mortgage Rates described in clause (ii) hereof shall be determined
on the basis of weighted average Mortgage Rates, the Net Mortgage Rates
described in clause (ii) hereof shall be satisfied as to each such mortgage
loan, the terms described in clause (iii) shall be determined on the basis of
weighted average remaining terms to maturity, the Loan-to-Value Ratios described
in clause (v) hereof shall be satisfied as to each such mortgage loan and,
except to the extent otherwise provided in this sentence, the representations
and warranties described in clause (iv) hereof must be satisfied as to each
Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.

                  "Rating Agency": [Standard & Poor's] [Moody's] [Fitch] [Duff &
Phelps]. If either agency or a successor is no longer in existence, "Rating
Agency" shall be such statistical credit rating agency, or other comparable
Person, designated by the Company, notice of which designation shall be given to
the Trustee and the Master Servicer. References herein to the two highest long
term debt

                                      -17-

<PAGE>

rating categories of a Rating Agency shall mean "AA" or better in the case of
[Standard & Poor's] [Fitch] [Duff & Phelps] and "Aa2" or better in the case of
Moody's and references herein to the highest short-term debt rating of a Rating
Agency shall mean "D-1" or better in the case of [Duff & Phelps] and "A-1" in
the case of [Standard & Poor's,] and in the case of any other Rating Agency such
references shall mean such rating categories without regard to any plus or
minus.

                  "Realized Loss": With respect to any Mortgage Loan or related
REO Property as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan as of the date of Cash Liquidation or REO Disposition, plus (ii)
interest (and REO Imputed Interest, if any) at the related Net Mortgage Rate
from the Due Date as to which interest was last paid or advanced to
Certificateholders up to the date of the Cash Liquidation or REO Disposition on
the Stated Principal Balance of such Mortgage Loan outstanding during each Due
Period that such interest was not paid or advanced, minus (iii) the proceeds, if
any, received during the month in which such Cash Liquidation or REO Disposition
occurred, to the extent applied as recoveries of interest at the related Net
Mortgage Rate and to principal of the Mortgage Loan, net of the portion thereof
reimbursable to the Master Servicer or any Sub-Servicer with respect to related
Advances not previously reimbursed. With respect to each Mortgage Loan which has
become the subject of a Deficient Valuation, the difference between the
principal balance of the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan as reduced by
the Deficient Valuation. With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction, the amount of such Debt Service Reduction.

                  "Record Date": The last Business Day of the month immediately
preceding the month of the related Distribution Date.

                  "Regular Certificate": Any of the Certificates other than the
Class R Certificates.

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

                  "Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended calendar month as
a result of the application of the Relief Act.

                  "REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.

                  "REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 86OG of Subchapter M of Chapter 1 of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.

                                      -18-

<PAGE>

                  "Remittance Report": A report prepared by the Master Servicer
providing the information set forth in Exhibit E attached hereto.

                  "REO Acquisition": The acquisition by the Master Servicer on
behalf of the Trustee for the benefit of the Certificateholders of any REO
Property pursuant to Section 3.15.

                  "REO Disposition": The receipt by the Master Servicer of
Insurance Proceeds, Liquidation Proceeds and other payments and recoveries
(including proceeds of a final sale) which the Master Servicer expects to be
finally recoverable from the sale or other disposition of the REO Property.

                  "REO Imputed Interest": As to any REO Property, for any
period, an amount equivalent to interest (at the Mortgage Rate that would have
been applicable to the related Mortgage Loan had it been outstanding) on the
unpaid principal balance of the Mortgage Loan as of the date of acquisition
thereof (as such balance is reduced by any income from the REO Property treated
as a recovery of principal pursuant to Section 3.15).

                  "REO Proceeds": Proceeds, net of directly related expenses,
received in respect of any REO Property (including, without limitation, proceeds
from the rental of the related Mortgaged Property and of any REO Disposition),
which proceeds are required to be deposited into the Custodial Account as and
when received.

                  "REO Property": A Mortgaged Property acquired by the Master
Servicer through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.

                  "Request for Release": A release signed by a Servicing
Officer, in the form of Exhibits F-1 or F-2 attached hereto.

                  "Required Insurance Policy": With respect to any Mortgage
Loan, any Insurance Policy or any other insurance policy that is required to be
maintained from time to time under this Agreement or pursuant to the provisions
of a Mortgage Loan.

                  "Residual Certificate":   Any of the Class R Certificates.

                  "Responsible Officer": When used with respect to the Trustee,
the Chairman or Vice Chairman of the Board of Directors or Trustees, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, the Chairman of the Committee on Trust
Matters, any vice president, any assistant vice president, the Secretary, any
assistant secretary, the Treasurer, any assistant treasurer, the Cashier, any
assistant cashier, any trust officer or assistant trust officer, the Controller
and any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.

                                      -19-

<PAGE>

                  "Seller": [Name of Seller] and its successors and assigns.

                  "Seller's Warranty Certificate": The Seller's Warranty
Certificate of the Seller, dated ______ __, 20__, in the form of Exhibit I
attached hereto.

                  "Senior Accelerated Distribution Percentage": With respect to
any Distribution Date, the percentage indicated below:

          DISTRIBUTION DATE SENIOR ACCELERATED DISTRIBUTION PERCENTAGE

                                     [TABLE]

provided, however, (i) that any scheduled reduction to the Senior Accelerated
Distribution Percentage described above shall not occur as of any Distribution
Date unless either (a)(1) the outstanding principal balance of Mortgage Loans
delinquent [60] days or more averaged over the last six months, as a percentage
of the aggregate outstanding principal balance of all Mortgage Loans averaged
over the last [six] months, does not exceed [2%] and (2) Realized Losses on the
Mortgage Loans to date for such Distribution Date if occurring during the sixth,
seventh, eighth, ninth or tenth year (or any year thereafter) after the Closing
Date are less than [30%, 35%, 40%, 45% or 50%], respectively, of the Initial
Certificate Principal Balance of the Class B Certificates or (b)(1) the
outstanding principal balance of the Mortgage Loans delinquent [60] days or more
averaged over the last six months, as a percentage of the aggregate outstanding
principal balance of all Mortgage Loans averaged over the last [six] months,
does not exceed [4%] and (2) Realized Losses on the Mortgage Loans to date for
such Distribution Date are less than [10%] of the Initial Certificate Principal
Balance of the Class B Certificates and (ii) that for any Distribution Date on
which the Senior Percentage is greater than the Original Senior Percentage, the
Senior Accelerated Distribution Percentage for such Distribution Date shall be
100%. Notwithstanding the foregoing, upon the reduction of the aggregate
Certificate Principal Balance of the Class A Certificates to zero, the Senior
Accelerated Distribution Percentage shall thereafter be 0%.

                  "Senior Percentage": As of any Distribution Date, the lesser
of 100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class A Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.

                  "Senior Principal Distribution Amount": As to any Distribution
Date, the lesser of (a) the balance of the Available Distribution Amount
remaining after the distribution of all amounts required to be distributed
pursuant to Section 4.02(b)(i) and (b) the sum of the amounts required to be
distributed to the Class A Certificateholders on such Distribution Date pursuant
to Section 4.02(b)(ii) and (vi).

                                      -20-

<PAGE>

                  "Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.

                  "Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of any REO Property and (iv) compliance
with the obligations under the second paragraph of Section 3.01 and Section
3.09.

                  "Servicing Fee": As to each Mortgage Loan, an amount, payable
out of any payment of interest on the Mortgage Loan, equal to interest at the
related Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan
for the calendar month preceding the month in which the payment is due
(alternatively, in the event such payment of interest accompanies a Principal
Prepayment in full made by the Mortgagor, interest for the number of days
covered by such payment of interest).

                  "Servicing Fee Rate": With respect to each Mortgage Loan, the
per annum rate of ------%.

                  "Servicing Officer": Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans, whose name appears on a list of servicing officers furnished to
the Trustee by the Master Servicer, as such list may from time to time be
amended.

                  "Single Certificate": A Certificate of any Class evidencing
the minimum denomination for Certificates of such Class as set forth in Section
5.01.

                  "Special Hazard Amount": As of any Distribution Date, an
amount equal to $___________ (the initial "Special Hazard Amount") minus the sum
of (i) the aggregate amount of Special Hazard Losses allocated solely to the
Class B Certificates pursuant to Section 4.04 and (ii) the Adjustment Amount (as
defined below) as most recently calculated. For each anniversary of the Cut-off
Date, the Adjustment Amount shall be calculated and shall be equal to the
amount, if any, by which the amount calculated in accordance with the preceding
sentence (without giving effect to the deduction of the Adjustment Amount for
such anniversary) exceeds the greater of (A) the product of the Special Hazard
Percentage for such anniversary multiplied by the outstanding principal balance
of all of the Mortgage Loans on such anniversary and (B) twice the outstanding
principal balance of the Mortgage Loan which has the largest outstanding
principal balance on such Anniversary.

                  "Special Hazard Percentage": As of each anniversary of the
Cut-off Date, the greater of (i) 1% and (ii) the largest percentage obtained by
dividing the aggregate outstanding principal

                                      -21-

<PAGE>

balance on such anniversary of the Mortgage Loans secured by Mortgaged
Properties located in a single, five-digit zip code area in the State of
California by the outstanding principal balance of all the Mortgage Loans on
such anniversary.

                  "[Standard & Poor's": Standard & Poor's Ratings Group, a
division of McGraw Hill, Inc. or its successor in interest.]

                  "Startup Day": The day designated as such pursuant to Article
X hereof.

                  "Stated Principal Balance": With respect to any Mortgage Loan
or related REO Property at any given time, (i) the principal balance of the
Mortgage Loan outstanding as of the Cut-off Date, after application of principal
payments due on or before such date, whether or not received, minus (ii) the sum
of (a) the principal portion of the Monthly Payments due with respect to such
Mortgage Loan or REO Property during each Due Period ending prior to the most
recent Distribution Date which were received or with respect to which an Advance
was made, (b) all Principal Prepayments with respect to such Mortgage Loan or
REO Property, and all Insurance Proceeds, Liquidation Proceeds and net income
from a REO Property to the extent applied by the Master Servicer as recoveries
of principal in accordance with Section 3.15 with respect to such Mortgage Loan
or REO Property, which were distributed pursuant to Section 4.01 on any previous
Distribution Date and (c) any Realized Loss with respect thereto allocated
pursuant to Section 4.04 for any previous Distribution Date.

                  "Subordinate Principal Distribution Amount": With respect to
any Distribution Date and the Class B Certificates, (a) the sum of (i) the
product of (x) the Class B Percentage and (y) the aggregate of the amounts
calculated for such Distribution Date under clauses (1), (2) and (3) of Section
4. 01 (b)(ii)(A); (ii) the principal collections described in Section 4. 01
(b)(ii)(B) to the extent such collections are not otherwise distributed to the
Senior Certificates; and (iii) the product of (x) 100% minus the Senior
Accelerated Distribution Percentage and (z) the aggregate of all Principal
Prepayments in Full and Curtailments received in the related Prepayment Period;
provided, however, that such amount shall in no event exceed the outstanding
Certificate Principal Balance of the Class B Certificates immediately prior to
such date.

                  "Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.

                  "Sub-Servicer Remittance Date": The 18th day of each month, or
if such day is not a Business Day, the immediately preceding Business Day.

                  "Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Master Servicer.

                                      -22-

<PAGE>

                  "Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer and any successor Sub-Servicer relating to
servicing and administration of certain Mortgage Loans as provided in Section
3.02.

                  "Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information, reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.

                  "Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.

                  "Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.

                  "Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) the
Mortgage Loans (exclusive of payments of principal and interest due on or before
the Cut-off Date, if any) as from time to time are subject to this Agreement and
all payments under and proceeds of the Mortgage Loans, together with all
documents included in the related Mortgage File, subject to Section 2.01; (ii)
such funds or assets as from time to time are deposited in the Custodial Account
and the Certificate Account; (iii) any REO Property; (iv) the Primary Mortgage
Insurance Policies, if any, Primary Hazard Insurance Policies and all other
Insurance Policies with respect to the Mortgage Loans; and (v) the Company's
interest in respect of the representations and warranties made by the Seller in
the Seller's Warranty Certificate as assigned to the Trustee pursuant to Section
2.04 hereof.

                  "Trustee": [Name of Trustee], or its successor in interest, or
any successor trustee appointed as herein provided.

                  "Trustee's Fee": As to each Mortgage Loan and as the
Distribution Date, an amount, payable out of any payment of interest on the
Mortgage Loan, equal to interest at ______% per annum on the Stated Principal
Balance of such Mortgage Loan as of the Due Date immediately preceding the month
in which such Distribution Date occurs.

                  "Uninsured Cause": Any cause of damage to property subject to
a Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 3.13.

                                      -23-

<PAGE>

                  "United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includable in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States. The term "United States" shall have the meaning set forth in
Section 7701 of the Code or successor provisions.

                  "Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. ______% of all of the
Voting Rights shall be allocated among Holders of the Certificates,
respectively, other than the Class A-5, Class A-7 and Class R Certificates, in
proportion to the outstanding Certificate Principal Balances of their respective
Certificates; and the Holders of the Class A-5, Class A-7 and Class R
Certificates shall be entitled to ___%, ___% and ___% of all of the Voting
Rights, respectively, allocated among the Certificates of each such Class in
accordance with their respective Percentage Interests.

                                      -24-

<PAGE>

                                   ARTICLE II

         CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION  2.01.      Conveyance of Mortgage Loans.

                  The Company, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign, transfer, sell, set over and
otherwise convey to the Trustee without recourse all the right, title and
interest of the Company in and to the Mortgage Loans identified on the Mortgage
Loan Schedule and all other assets included or to be included in the Trust Fund
for the benefit of the Certificateholders. Such assignment includes all
principal and interest received by the Master Servicer on or with respect to the
Mortgage Loans (other than payment of principal and interest due on or before
the Cut-off Date).

                  In connection with such transfer and assignment, the Company
has requested the Seller to deliver to, and deposit with the Trustee, the
following documents or instruments:

                  (i) the original Mortgage Note, endorsed by the Seller "Pay to
         the order of [Name of Trustee], as trustee without recourse" or to "Pay
         to the order of [Name of Trustee], as trustee for holders of AB
         Mortgage Securities Corp., Mortgage Pass-Through Certificates, Series
         200_-_, without recourse" with all intervening endorsements showing a
         complete chain of endorsements from the originator to the Person
         endorsing it to the Trustee;

                  (ii) the original recorded Mortgage or, if the original
         Mortgage has not been returned from the applicable public recording
         office, a copy of the Mortgage certified by the Seller to be a true and
         complete copy of the original Mortgage submitted to the title insurance
         company for recording;

                  (iii) a duly executed original Assignment of the Mortgage
         endorsed by the Seller, without recourse, to "[Name of Trustee], as
         trustee" or to "[Name of Trustee], as trustee for holders of AB
         Mortgage Securities Corp., Mortgage Pass-Through Certificates, Series
         200_-_", with evidence of recording thereon;

                  (iv) the original recorded Assignment or Assignments of the
         Mortgage showing a complete chain of assignment from the originator
         thereof to the Person assigning it to the Trustee or, if any such
         Assignment has not been returned from the applicable public recording
         office, a copy of such Assignment certified by the Seller to be a true
         and complete copy of the original Assignment submitted to the title
         insurance company for recording;

                  (v) the original lender's title insurance policy, or, if such
         policy has not been issued, any one of an original or a copy of the
         preliminary title report, title binder or title

                                      -25-

<PAGE>

         commitment on the Mortgaged Property with the original policy of the
         insurance to be delivered promptly following the receipt thereof;

                  (vi)     the original of any assumption, modification,
         extension or guaranty agreement;

                  (vii)    the original or a copy of the private mortgage
         insurance policy or original certificate of private mortgage insurance,
         if applicable; and

                  (viii) if any of the documents or instruments referred to
         above were executed on behalf of the Mortgagor by another Person, the
         original power of attorney or other instrument that authorized and
         empowered such Person to sign, or a copy thereof certified by the
         Seller (or by an officer of the applicable title insurance or escrow
         company) to be a true and correct copy of the original.

                  The Seller is obligated pursuant to the Seller's Warranty
Certificate to deliver to the Trustee: (a) either the original recorded
Mortgage, or in the event such original cannot be delivered by the Seller, a
copy of such Mortgage certified as true and complete by the appropriate
recording office, in those instances where a copy thereof certified by the
Seller was delivered to the Trustee pursuant to clause (ii) above; and (b)
either the original Assignment or Assignments of the Mortgage, with evidence of
recording thereon, showing a complete chain of assignment from the originator to
the Seller, or in the event such original cannot be delivered by the Seller, a
copy of such Assignment or Assignments certified as true and complete by the
appropriate recording office, in those instances where copies thereof certified
by the Seller were delivered to the Trustee pursuant to clause (iv) above.
Notwithstanding anything to the contrary contained in this Section 2.01, in
those instances where the public recording office retains the original Mortgage
after it has been recorded, the Seller shall be deemed to have satisfied its
obligations hereunder upon delivery to the Trustee of a copy of such Mortgage
certified by the public recording office to be a true and complete copy of the
recorded original thereof.

                  If any Assignment is lost or returned unrecorded to the
Trustee because of any defect therein, the Seller is required to prepare a
substitute Assignment or cure such defect, as the case may be, and the Trustee
shall cause such Assignment to be recorded in accordance with this paragraph.

                  The Seller is required, as described in the Seller's Warranty
Certificate, to deliver to the Trustee the original of any documents assigned to
the Trustee pursuant to this Section 2.01 not later than 120 days after the
Closing Date.

                  All original documents relating to the Mortgage Loans which
are not delivered to the Trustee, to the extent delivered by the Seller to the
Master Servicer, are and shall be held by the Master Servicer in trust for the
benefit of the Trustee on behalf of the Certificateholders.

                                      -26-

<PAGE>

                  Except as may otherwise expressly be provided herein, neither
the Company, the Master Servicer nor the Trustee shall (and the Master Servicer
shall ensure that no Sub-Servicer shall) assign, sell, dispose of or transfer
any interest in the Trust Fund or any portion thereof, or permit the Trust Fund
or any portion thereof to be subject to any lien, claim, mortgage, security
interest, pledge or other encumbrance of, any other Person.

                  It is intended that the conveyance of the Mortgage Loans by
the Company to the Trustee as provided in this Section be, and be construed as,
a sale of the Mortgage Loans by the Company to the Trustee for the benefit of
the Certificateholders. It is, further, not intended that such conveyance be
deemed a pledge of the Mortgage Loans by the Company to the Trustee to secure a
debt or other obligation of the Company. However, in the event that the Mortgage
Loans are held to be property of the Company, or if for any reason this
Agreement is held or deemed to create a security interest in the Mortgage Loans,
then it is intended that, (a) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in this Section shall be deemed to
be (1) a grant by the Company to the Trustee of a security interest in all of
the Company's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to (A) the Mortgage
Loans, including the Mortgage Notes, the Mortgages, any related insurance
policies and all other documents in the related Mortgage Files, (B) all amounts
payable to the holders of the Mortgage Loans in accordance with the terms
thereof and (C) all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the
Certificate Account or the Custodial Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment by the Company
to the Trustee of any security interest in any and all of the Seller's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the property described in the foregoing
clauses (1)(A) through (C) granted by [Name of Seller] to the Company pursuant
to the Assignment Agreement; (c) the possession by the Trustee or its agent of
Mortgage Notes and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party" or possession by a purchaser or a person designated by
such secured party, for purposes of perfecting the security interest pursuant to
the New York Uniform Commercial Code and the Uniform Commercial Code of any
other applicable jurisdiction (including, without limitation, Sections 9-305,
8-313 or 8-321 thereof); and (d) notifications to persons holding such property,
and acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. The Company and the Trustee shall, to the extent consistent with
this Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement.

                                                        -27-

<PAGE>

                  SECTION  2.02.    Acceptance of the Trust Fund by the Trustee.

                  The Trustee acknowledges receipt (subject to any exceptions
noted in the Initial Certification described below) of the documents referred to
in Section 2.01 above and all other assets included in the Trust Fund and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it holds or will hold
such other assets included in the Trust Fund (to the extent delivered or
assigned to the Trustee), in trust for the exclusive use and benefit of all
present and future Certificateholders.

                  The Trustee agrees, for the benefit of the Certificateholders,
to review each Mortgage File on or before the Closing Date to ascertain that all
documents required to be delivered to it are in its possession, and the Trustee
agrees to execute and deliver to the Company and the Master Servicer on the
Closing Date an Initial Certification in the form annexed hereto as Exhibit C to
the effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), (i) all
documents required to be delivered to it pursuant to this Agreement with respect
to such Mortgage Loan are in its possession, (ii) such documents have been
reviewed by it and appear regular on their face and relate to such Mortgage Loan
and (iii) based on its examination and only as to the foregoing documents, the
information set forth in items (i) - (vi) and (xiii) of the definition of the
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. Neither the Trustee nor the Master Servicer shall be under any
duty to determine whether any Mortgage File should include any of the documents
specified in clause (vi) of Section 2.01. Neither the Trustee nor the Master
Servicer shall be under any duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable or appropriate for the represented purpose or that
they have actually been recorded or that they are other than what they purport
to be on their face.

                  Within 90 days of the Closing Date the Trustee shall deliver
to the Company and the Master Servicer a Final Certification in the form annexed
hereto as Exhibit D evidencing the completeness of the Mortgage Files, with any
applicable exceptions noted thereon.

                  If in the process of reviewing the Mortgage Files and
preparing the certifications referred to above the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective in
any material respect, the Trustee shall promptly notify the Seller, the Master
Servicer and the Company. The Trustee shall promptly notify the Seller of such
defect and request that the Seller cure any such defect within 60 days from the
date on which the Seller was notified of such defect, and if the Seller does not
cure such defect in all material respects during such period, request that the
Seller purchase such Mortgage Loan from the Trust Fund on behalf of the
Certificateholders at the Purchase Price within 90 days after the date on which
the Seller was notified of such defect. It is understood and agreed that the
obligation of the Seller to cure a material defect in, or purchase any Mortgage
Loan as to which a material defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to
Certificateholders or the Trustee on behalf of Certificateholders. The Purchase
Price for the purchased Mortgage Loan shall be

                                      -28-

<PAGE>

deposited or caused to be deposited upon receipt by the Master Servicer in the
Custodial Account and, upon receipt by the Trustee of written notification of
such deposit signed by a Servicing Officer, the Trustee shall release or cause
to be released to the Seller the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Seller shall require as necessary to vest in the Seller
ownership of any Mortgage Loan released pursuant hereto and at such time the
Trustee shall have no further responsibility with respect to the related
Mortgage File.

                  SECTION  2.03.      Representations, Warranties and Covenants
                                      of the Master Servicer and the Company.

                  (a) The Master Servicer hereby represents and warrants to and
covenants with the Company and the Trustee for the benefit of Certificateholders
that:

                  (i) The Master Servicer is, and throughout the term hereof
         shall remain, a duly organized, validly existing and in good standing
         under the laws of the State of (except as otherwise permitted pursuant
         to Section 6.02), the Master Servicer is, and shall remain, in
         compliance with the laws of each state in which any Mortgaged Property
         is located to the extent necessary to perform its obligations under
         this Agreement, and the Master Servicer is, and shall remain, approved
         to sell mortgage loans to and service mortgage loans for FNMA and
         FHLMC;

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

                  (iii) The Master Servicer has the full power and authority to
         enter into and consummate all transactions contemplated by this
         Agreement, has duly authorized the execution, delivery and performance
         of this Agreement, and has duly executed and delivered this Agreement;

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

                  (v)      The Master Servicer is not in violation of, and its
         execution and delivery of this Agreement and its performance and
         compliance with the terms of this Agreement will

                                      -29-

<PAGE>

         not constitute a violation of, any law, any order or decree of any
         court or arbiter, or any order, regulation or demand of any federal,
         state or local governmental or regulatory authority, which violation is
         likely to affect materially and adversely either the ability of the
         Master Servicer to perform its obligations under this Agreement or the
         financial condition of the Master Servicer;

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

                  (vii) The Master Servicer will comply in all material respects
         in the performance of this Agreement and with all reasonable rules and
         requirements of each insurer under each Insurance Instrument;

                  (viii) The execution of this Agreement and the performance of
         the Master Servicer's obligations hereunder do not require any license,
         consent or approval of any state or federal court, agency, regulatory
         authority or other governmental body having jurisdiction over the
         Master Servicer, other than such as have been obtained; and (ix) no
         information, certificate of an officer, statement furnished in writing
         or report delivered to the Company, any affiliate of the Company or the
         Trustee by the Master Servicer will, to the knowledge of the Master
         Servicer, contain any untrue statement of a material fact or omit a
         material fact necessary to make the information, certificate, statement
         or report not misleading; and

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.03(a) shall survive the
execution and delivery of this Agreement, and shall inure to the benefit of the
Company, the Trustee and the Certificateholders. Upon discovery by the Company,
the Trustee or the Master Servicer of a breach of any of the foregoing
representations, warranties and covenants that materially and adversely affects
the interests of the Company or the Trustee, the party discovering such breach
shall give prompt written notice to the other parties.

                  (b) The Company hereby represents and warrants to the Master
Servicer and the Trustee for the benefit of Certificateholders that as of the
Closing Date (or, if otherwise specified below, as of the date so specified):

                  (i) Immediately prior to the assignment of the Mortgage Loans
         to the Trustee, the Company had good title to, and was the sole owner
         of, each Mortgage Loan free and clear of any pledge, lien, encumbrance
         or security interest (other than rights to servicing and related
         compensation) and such assignment validly transfers ownership of the
         Mortgage Loans to the Trustee free and clear of any pledge, lien,
         encumbrance or security interest;

                                      -30-

<PAGE>

                  (ii) No Mortgage Loan is one month or more delinquent in
         payment of principal and interest as of the Cut-off Date and no
         Mortgage Loan has been so delinquent more than once in the 12-month
         period prior to the Cut- off Date;

                  (iii) The information set forth in the Mortgage Loan Schedule
         with respect to each Mortgage Loan or the Mortgage Loans, as the case
         may be, is true and correct in all material respects at the date or
         dates respecting which such information is furnished;

                  (iv) The Mortgage Loans are fully-amortizing, fixed-rate
         mortgage loans with level Monthly Payments due on the first day of each
         month and terms to maturity at origination or modification of not more
         than 30 years;

                  (v) Each Mortgage Loan secured by a Mortgaged Property with a
         Loan-to-Value Ratio at origination in excess of 80% is the subject of a
         Primary Mortgage Insurance Policy that insures that portion of the
         principal balance thereof that exceeds the amount equal to 75% of the
         appraised value of the related Mortgaged Property. Each such Primary
         Mortgage Insurance Policy is in full force and effect and the Trustee
         is entitled to the benefits thereunder; and

                  (vi) The representations and warranties of the Seller with
         respect to the Mortgage Loans and the remedies therefor are as set
         forth in the Seller's Warranty Certificate.

                  [Other representations and warranties as applicable.]

                  It is understood and agreed that the representations and
warranties set forth in this Section 2.03(b) shall survive delivery of the
respective Mortgage Files to the Trustee.

                  Upon discovery by either the Company, the Master Servicer or
the Trustee of a breach of any representation or warranty set forth in this
Section 2.03 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties.

                  SECTION  2.04.      Representations and Warranties of the
                                      Seller; Repurchase and Substitution.

                  The Company hereby assigns to the Trustee for the benefit of
Certificateholders its interest in respect of the representations and warranties
made by the Seller in the Seller's Warranty Certificate or the exhibits thereto.
Insofar as the Seller's Warranty Certificate relates to such representations and
warranties and any remedies provided thereunder for any breach of such
representations and warranties, such right, title and interest may be enforced
by the Trustee on behalf of the Certificateholders. Upon the discovery by the
Company, the Master Servicer or the Trustee of a breach of any of the
representations and warranties made in the Seller's Warranty Certificate in
respect of any Mortgage Loan which materially and adversely affects the
interests of the

                                      -31-

<PAGE>

Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties. The Trustee shall
promptly notify the Seller of such breach and request that such Seller shall,
within 90 days from the date that the Company, the Seller or the Trustee was
notified of such breach, either (i) cure such breach in all material respects or
(ii) purchase such Mortgage Loan from the Trust Fund at the Purchase Price and
in the manner set forth in Section 2.02; provided that in the case of such
breach, the Seller shall have the option to substitute a Qualified Substitute
Mortgage Loan or Loans for such Mortgage Loan if such substitution occurs within
two years following the Closing Date. Any such substitution must occur within 90
days from the date the Seller was notified of the breach if such 90 day period
expires before two years following the Closing Date. In the event that the
Seller elects to substitute a Qualified Substitute Mortgage Loan or Loans for a
Deleted Mortgage Loan pursuant to this Section 2.04, the Seller shall deliver to
the Trustee for the benefit of the Certificateholders with respect to such
Qualified Substitute Mortgage Loan or Loans, the original Mortgage Note, the
Mortgage, an Assignment of the Mortgage in recordable form, and such other
documents and agreements as are required by Section 2.01, with the Mortgage Note
endorsed as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
shall not be part of the Trust Fund and will be retained by the Master Servicer
and remitted by the Master Servicer to the Seller on the next succeeding
Distribution Date.

                  For the month of substitution, distributions to
Certificateholders will include the Monthly Payment due on a Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan. The Company shall
amend or cause to be amended the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Qualified Substitute Mortgage Loan or Loans and the Company
shall deliver the amended Mortgage Loan Schedule, to the Trustee. Upon such
substitution, the Qualified Substitute Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, the Seller shall be deemed to
have made the representations and warranties with respect to the Qualified
Substitute Mortgage Loan contained in the Seller's Warranty Certificate as of
the date of substitution, and the Company shall be deemed to have made with
respect to any Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section 2.03
hereof, and the Seller shall be obligated to repurchase or substitute for any
Qualified Substitute Mortgage Loan as to which a repurchase or substitution
obligation has occurred pursuant to Section 3 of the Seller's Warranty
Certificate.

                  In connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (in each case after application of the principal portion
of the Monthly Payments due in the month of substitution that are to be
distributed to Certificateholders in the month of substitution). The Seller
shall provide the Master Servicer on the day of substitution for immediate

                                      -32-

<PAGE>

deposit in to the Custodial Account the amount of such shortfall, without any
reimbursement therefor. The Seller shall give notice in writing to the Trustee
of such event, which notice shall be accompanied by an Officers' Certificate as
to the calculation of such shortfall and by an Opinion of Counsel to the effect
that such substitution will not cause (a) any federal tax to be imposed on the
Trust Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 86OF(a)(1) of the Code or on "contributions after
the startup date" under Section 86OG(d)(1) of the Code or (b) any portion of the
Trust Fund to fail to qualify as a REMIC at any time that any Certificate is
outstanding. The costs of any substitution as described above, including any
related assignments, opinions or other documentation in connection therewith
shall be borne by the Seller.

                  Except as expressly set forth herein neither the Trustee nor
the Master Servicer is under any obligation to discover any breach of the above
mentioned representations and warranties. It is understood and agreed that the
obligation of the Seller to cure such breach or to so purchase or substitute for
any Mortgage Loan as to which such a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to
Certificateholders or the Trustee on behalf of Certificateholders. In addition,
if the first scheduled Monthly Payment is due during the first month after its
closing date (as such term is used in the Seller's Warranties Certificate) and
such Monthly Payment is not received by the Master Servicer within 30 days of
the due date in accordance with the terms of the related Mortgage Note, the
Master Servicer shall promptly notify the Seller and the Trustee and the Seller
shall purchase such Mortgage Loan from the Trust Fund at the Purchase Price or
substitute a Qualified Substitute Mortgage Loan therefor within 15 days from the
date that the Seller was notified.

                  SECTION  2.05.      Issuance of Certificates Evidencing
                                      Interests in the Trust Fund.

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery of the Mortgage Files to it together with the assignment
to it of all other assets included in the Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Company executed by an officer
of the Company, has executed and caused to be authenticated, and delivered to or
upon the order of the Company, the Certificates in authorized denominations
which evidence ownership of the entire Trust Fund.

                                      -33-

<PAGE>

                                   ARTICLE III

                 ADMINISTRATION AND SERVICING OF THE TRUST FUND

                  SECTION  3.01.      Master Servicer to Act as Master Servicer.

                  The Master Servicer shall service and administer the Mortgage
Loans for the benefit of the Certificateholders, in accordance with this
Agreement and the customary and usual standards of practice of prudent
institutional mortgage lenders servicing comparable mortgage loans for their own
account in the respective states in which the Mortgaged Properties are located.
Subject to the foregoing, the Master Servicer shall have full power and
authority, acting alone and/or through Sub-Servicers as provided in Section
3.02, to do or cause to be done any and all things in connection with such
servicing and administration that it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Master Servicer in its own name or
in the name of a Sub-Servicer is hereby authorized and empowered by the Trustee
when the Master Servicer believes it appropriate in its best judgment, to (i)
execute and deliver, on behalf of the Certificateholders and the Trustee or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Mortgage Loans and the Mortgaged Properties, (ii) institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and (iii) hold or cause to be held title to such
properties, on behalf of the Trustee and Certificateholders. The Master Servicer
shall service and administer the Mortgage Loans in accordance with applicable
state and federal law and shall provide to the Mortgagors any reports required
to be provided to them thereby. Subject to Section 3.16, the Trustee shall
furnish to the Master Servicer and any Sub-Servicer any powers of attorney and
other documents necessary or appropriate to enable the Master Servicer and any
Sub- Servicer to carry out their servicing and administrative duties hereunder.
The Trustee shall not be responsible for any action taken by the Master Servicer
or any Sub-Servicer pursuant to the application of such powers of attorney. In
accordance with the standards of the preceding paragraph, the Master Servicer
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the payment of taxes and assessments on the Mortgaged Properties,
which advances shall be reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. No costs incurred by the Master Servicer or by Sub-
Servicers in effecting the payment of taxes and assessments on the Mortgaged
Properties shall, for the purpose of calculating distributions to
Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loans so permit.

                  The Master Servicer shall not (unless the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) make or permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (i) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (ii) cause the Trust Fund to fail to qualify as a REMIC under the Code or
the imposition of any tax on "prohibited transactions" or "contributions" after
the startup date under the REMIC Provisions.

                                      -34-

<PAGE>

                  The Master Servicer may approve a request for a partial
release of the Mortgaged Property, easement, consent to alteration or demolition
and other similar matters if it has determined, exercising its good faith
business judgement in the same manner as it would if it were the owner of the
related Mortgage Loan, that such approval will not adversely affect the security
for, or the timely and full collectability of, the related Mortgage Loan. Any
fee collected by the Master Servicer for processing such request will be
retained by the Master Servicer as additional servicing compensation.

                  The relationship of the Master Servicer (and of any successor
to the Master Servicer under this Agreement) to the Trustee under this Agreement
is intended by the parties to be that of an independent contractor and not that
of a joint venturer, partner or agent.

                  SECTION  3.02.      Sub-Servicing Agreements Between Master
                                      Servicer and Sub-Servicers.

                  (a) The Master Servicer may enter into Sub-Servicing
Agreements with Sub- Servicers for the servicing and administration of the
Mortgage Loans and for the performance of any and all other activities of the
Master Servicer hereunder. Each Sub-Servicer shall be either (i) an institution
the accounts of which are insured by the FDIC or (ii) another entity that
engages in the business of originating or servicing mortgage loans, and in
either case shall be authorized to transact business in the state or states in
which the related Mortgaged Properties it is to service are situated, if and to
the extent required by applicable law to enable the Sub-Servicer to perform its
obligations hereunder and under the Sub-Servicing Agreement, and in either case
shall be a FHLMC or FNMA approved mortgage servicer. Each Sub-Servicing
Agreement must impose on the Sub-Servicer requirements conforming to the
provisions set forth in Section 3.08 and provide for servicing of the Mortgage
Loans consistent with the terms of this Agreement. With the consent of the
Trustee, which consent shall not be unreasonably withheld, the Master Servicer
and the Sub-Servicers may enter into Sub-Servicing Agreements and make
amendments to the Sub-Servicing Agreements or enter into different forms of
Sub-Servicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of this
Agreement.

                  (b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each Sub-Servicer under the related Sub-Servicing
Agreement, including, without limitation, any obligation to make advances in
respect of delinquent payments as required by a Sub-Servicing Agreement, or to
purchase a Mortgage Loan on account of defective documentation or on account of
a breach of a representation or warranty, as described in Section 2.02. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-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, but shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement only
to the extent, if any, that such recovery exceeds all amounts due in respect of
the

                                      -35-

<PAGE>

related Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.

                  SECTION  3.03.      Successor Sub-Servicers.

                  The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.

                  SECTION  3.04.      Liability of the Master Servicer.

                  Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. For purposes of this Agreement, the Master Servicer shall be deemed to
have received payments on Mortgage Loans when the Sub-Servicer has received such
payments. The Master Servicer shall be entitled to enter into any agreement with
a Sub-Servicer for indemnification of the Master Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.

                  SECTION  3.05.      No Contractual Relationship Between
                                      Sub-Servicers and Trustee or
                                      Certificateholders.

                  Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Sub-Servicer and the Master Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 3.06.

                                      -36-

<PAGE>

                  SECTION  3.06.      Assumption or Termination of Sub-Servicing
                                      Agreements by Trustee.

                  In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of an Event of Default), the
Trustee or its designee shall thereupon assume all of the rights and obligations
of the Master Servicer under each Sub-Servicing Agreement that the Master
Servicer may have entered into, unless the Trustee is then permitted and elects
to terminate any Sub-Servicing Agreement in accordance with its terms. The
Trustee, its designee or the successor servicer for the Trustee shall be deemed
to have assumed all of the Master Servicer's interest therein and to have
replaced the Master Servicer as a party to each Sub-Servicing Agreement to the
same extent as if the Sub-Servicing Agreements had been assigned to the assuming
party, except that the Master Servicer shall not thereby be relieved of any
liability or obligations under the Sub-Servicing Agreements, and the Master
Servicer shall continue to be entitled to any rights or benefits which arose
prior to its termination as master servicer.

                  The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the Sub-Servicing
Agreements to the assuming party.

                  SECTION  3.07.      Collection of Certain Mortgage Loan
                                      Payments.

                  The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any related Insurance Policy, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. The Master
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note, Primary
Hazard Insurance Policy, Primary Mortgage Insurance Policy or otherwise or
against any public or governmental authority with respect to a taking or
condemnation) if it reasonably believes that it is prohibited by applicable law
from enforcing the provision of the Mortgage or other instrument pursuant to
which such payment is required. Consistent with the foregoing, the Master
Servicer may in its discretion waive any prepayment fees, late payment charge or
other charge, except as otherwise required under applicable law. The Master
Servicer shall be responsible for preparing and distributing all information
statements relating to payments on the Mortgage Loans, in accordance with all
applicable federal and state tax laws and regulations.

                  SECTION  3.08.      Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an

                                      -37-

<PAGE>

Eligible Account and shall otherwise be acceptable to the Master Servicer. All
amounts held in a Sub-Servicing Account shall be held in trust for the Trustee
for the benefit of the Certificateholders. The Sub-Servicer will be required to
deposit into the Sub-Servicing Account no later than the first Business Day
after receipt all proceeds of Mortgage Loans received by the Sub-Servicer, less
its servicing compensation and any unreimbursed expenses and advances, to the
extent permitted by the Sub-Servicing Agreement. On each Sub-Servicer Remittance
Date the Sub-Servicer will be required to remit to the Master Servicer for
deposit into the Custodial Account all funds held in the Sub-Servicing Account
with respect to any Mortgage Loan as of the Sub-Servicer Remittance Date, after
deducting from such remittance an amount equal to the servicing compensation and
unreimbursed expenses and advances to which it is then entitled pursuant to the
related Sub- Servicing Agreement, to the extent not previously paid to or
retained by it. In addition, on each Sub-Servicer Remittance Date the
Sub-Servicer will be required to remit to the Master Servicer any amounts
required to be advanced pursuant to the related Sub-Servicing Agreement. The
Sub-Servicer will also be required to remit to the Master Servicer, within one
Business Day of receipt, the proceeds of any Principal Prepayment made by the
Mortgagor and any Insurance Proceeds or Liquidation Proceeds.

                  SECTION  3.09.      Collection of Taxes, Assessments and
                                      Similar Items; Servicing Accounts.

                  The Master Servicer and the Sub-Servicers shall establish and
maintain one or more accounts (the "Servicing Accounts"), and shall deposit and
retain therein all collections from the Mortgagors (or related advances from
Sub- Servicers) for the payment of taxes, assessments, Primary Hazard Insurance
Policy premiums, and comparable items for the account of the Mortgagors, to the
extent that the Master Servicer customarily escrows for such amounts.
Withdrawals of amounts so collected from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, Primary Hazard Insurance Policy
premiums and comparable items; (ii) reimburse the Master Servicer (or a
Sub-Servicer to the extent provided in the related Sub-Servicing Agreement) out
of related collections for any payments made pursuant to Sections 3.01 (with
respect to taxes and assessments) and 3.13 (with respect to Primary Hazard
Insurance Policies); (iii) refund to Mortgagors any sums as may be determined to
be overages; or (iv) clear and terminate the Servicing Account at the
termination of this Agreement pursuant to Section 9.01. As part of its servicing
duties, the Master Servicer or Sub-Servicers shall, if and to the extent
required by law, pay to the Mortgagors interest on funds in Servicing Accounts
from its or their own funds, without any reimbursement therefor.

                  SECTION  3.10.      Custodial Account.

                  (a) The Master Servicer shall establish and maintain one or
more accounts (collectively, the "Custodial Account") in which the Master
Servicer shall deposit or cause to be deposited no later than the first Business
Day after receipt or as and when received from the Sub-Servicers, the following
payments and collections received or made by or on behalf of it subsequent to
the Cut-off Date, or received by it prior to the Cut-off Date but allocable to a
period

                                      -38-

<PAGE>

subsequent thereto (other than in respect of principal and interest on the
Mortgage Loans due on or before the Cut-off Date):

                  (i)      all payments on account of principal, including
         Principal Prepayments, on the Mortgage Loans;

                  (ii)     all payments on account of interest on the Mortgage
         Loans, not including any portion thereof representing interest on
         account of the related Servicing Fee Rate;

                  (iii) all Insurance Proceeds, other than proceeds that
         represent reimbursement of costs and expenses incurred by the Master
         Servicer in connection with presenting claims under the related
         Insurance Policies, Liquidation Proceeds and REO Proceeds;

                  (iv) all proceeds of any Mortgage Loan or REO Property
         repurchased or purchased in accordance with Sections 2.02, 2.04 or 9.01
         and all amounts required to be deposited in connection with the
         substitution of a Qualified Substitute Mortgage Loan pursuant to
         Section 2.04;

                  (v) any amounts required to be deposited in the Custodial
         Account pursuant to Section 3.12, 3.13 or 3.22; and

                  (vi) all amounts transferred from the Certificate Account
         to the Custodial Account in accordance with Sections 4.01(b).

                  For purposes of the immediately preceding sentence, the
Cut-off Date with respect to any Qualified Substitute Mortgage Loan shall be
deemed to be the date of substitution.

The foregoing requirements for deposit in the Custodial Account shall be
exclusive. In the event the Master Servicer shall deposit in the Custodial
Account any amount not required to be deposited therein, it may withdraw such
amount from the Custodial Account, any provision herein to the contrary
notwithstanding. The Custodial Account shall be maintained as a segregated
account, separate and apart from trust funds created for mortgage pass-through
certificates of other series, and the other accounts of the Master Servicer.

                  (b) Funds in the Custodial Account may be invested in
Permitted Instruments in accordance with the provisions set forth in Section
3.12. The Master Servicer shall give notice to the Trustee and the Company of
the location of the Custodial Account after any change thereof.

                  (c) Payments in the nature of late payment charges, prepayment
fees, assumption fees and reconveyance fees received on the Mortgage Loans shall
not be deposited in the Custodial Account, but rather shall be received and held
by the Master Servicer as additional servicing compensation.

                                      -39-

<PAGE>

                  SECTION  3.11.      Permitted Withdrawals From the Custodial
                                      Account.

                  The Master Servicer may, from time to time as provided herein,
make withdrawals from the Custodial Account of amounts on deposit therein
pursuant to Section 3.10 that are attributable to the Mortgage Loans for the
following purposes:

                  (i) to make deposits into the Certificate Account in the
         amounts and in the manner provided for in Section 4.01, such deposit to
         include interest collections on the Mortgage Loans at the Net Mortgage
         Rate [and net of amounts reimbursed therefrom];

                  (ii) to pay to itself, the Company, the Seller or any other
         appropriate person, as the case may be, with respect to each Mortgage
         Loan that has previously been purchased, repurchased or replaced
         pursuant to Sections 2.02, 2.04 or 9.01 all amounts received thereon
         and not yet distributed as of the date of purchase, repurchase or
         substitution;

                  (iii) to reimburse itself or any Sub-Servicer for Advances not
         previously reimbursed, the Master Servicer's or any Sub-Servicer's
         right to reimbursement pursuant to this clause (iii) being limited to
         amounts received which represent Late Collections (net of the related
         Servicing Fees) of Monthly Payments on Mortgage Loans with respect to
         which such Advances were made and as further provided in Section 3.15;

                  (iv) to reimburse or pay itself, the Trustee or the Company
         for expenses incurred by or reimbursable to the Master Servicer, the
         Trustee or the Company pursuant to Sections 3.22, 6.03, 8.05, 10.01(c)
         or 10.01(g), except as otherwise provided in such Sections;

                  (v) to reimburse itself or any Sub-Servicer for costs and
         expenses incurred by or reimbursable to it relating to the prosecution
         of any claims pursuant to Section 3.13 that are in excess of the
         amounts so recovered;

                  (vi) to reimburse itself or any Sub-Servicer for unpaid
         Servicing Fees and unreimbursed Servicing Advances, the Master
         Servicer's or any Sub-Servicer's right to reimbursement pursuant to
         this clause (vi) with respect to any Mortgage Loan being limited to
         late recoveries of the payments for which such advances were made
         pursuant to Section 3.01 or Section 3.09 and any other related Late
         Collections;

                  (vii) to pay itself as servicing compensation (in addition to
         the Servicing Fee), on or after each Distribution Date, any interest or
         investment income earned on funds deposited in the Custodial Account
         for the period ending on such Distribution Date, subject to Section
         8.05;

                  (viii) to reimburse itself or any Sub-Servicer for any Advance
         previously made which itself has determined to be a Nonrecoverable
         Advance, provided that either (a) such Advance was made with respect to
         a delinquency that ultimately constituted an Excess

                                      -40-

<PAGE>

          Special Hazard Loss, Excess Fraud Loss, Excess Bankruptcy Loss or
          Extraordinary Loss, or (b) the Certificate Principal Balances of the
          Class B Certificates have been reduced to zero; and

                  (ix)     to clear and terminate the Custodial Account at the
         termination of this Agreement pursuant to Section 9.01.

                  The Master Servicer shall keep and maintain separate
accounting records on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Custodial Account pursuant to such clauses
(ii), (iii), (iv), (v), (vi), (vii) and (viii).

                  In connection with clause (viii) above, the Trustee shall
notify the Master Servicer if and when the Certificate Principal Balances of the
Class B Certificates have been reduced to zero.

                  SECTION  3.12.      Permitted Instruments.

                  Any institution maintaining the Custodial Account shall at the
direction of the Master Servicer invest the funds in such account in Permitted
Instruments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of such
investment (except that if such Permitted Instrument is an obligation of the
institution that maintains such account, then such Permitted Instrument shall
mature not later than such Distribution Date) and shall not be sold or disposed
of prior to its maturity. All income and gain realized from any such investment
as well as any interest earned on deposits in the Custodial Account shall be for
the benefit of the Master Servicer. The Master Servicer shall deposit in the
Custodial Account (with respect to investments made hereunder of funds held
therein) an amount equal to the amount of any loss incurred in respect of any
such investment immediately upon realization of such loss without right of
reimbursement.

                  SECTION  3.13.      Maintenance of Primary Mortgage Insurance
                                      and Primary Hazard Insurance.

                  (a) The Master Servicer shall not take, or permit any
Sub-Servicer to take, any action which would result in non-coverage under any
applicable Primary Mortgage Insurance Policy of any loss which, but for the
actions of the Master Servicer or Sub-Servicer, would have been covered
thereunder. To the extent coverage is available, the Master Servicer shall keep
or cause to be kept in full force and effect each such Primary Mortgage
Insurance Policy until the principal balance of the related Mortgage Loan
secured by a Mortgaged Property is reduced to 75% or less of the Collateral
Value in the case of such a Mortgage Loan having a Loan-to-Value Ratio at
origination in excess of 80%. The Master Servicer shall not cancel or refuse to
renew any such Primary Mortgage Insurance Policy, or consent to any Sub-Servicer
canceling or refusing to renew any such Primary Mortgage Insurance Policy
applicable to a Mortgage Loan subserviced by it, that is in effect at the date
of the initial issuance of the Certificates and is required to be kept in force
hereunder

                                      -41-

<PAGE>

unless the replacement Primary Mortgage Insurance Policy for such canceled or
non-renewed policy is maintained with a Qualified Insurer.

                  (b) In connection with its activities as administrator and
servicer of the Mortgage Loans, the Master Servicer agrees to present or to
cause the related Sub-Servicer to present, on behalf of the Master Servicer, the
Sub-Servicer, if any, the Trustee and Certificateholders, claims to the insurer
under any Primary Mortgage Insurance Policies, in a timely manner in accordance
with such policies, and, in this regard, to take or cause to be taken such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 3. 10, any Insurance Proceeds collected by or remitted to the Master
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 3.11.

                  (c) The Master Servicer shall cause to be maintained for each
Mortgage Loan primary hazard insurance with extended coverage on the related
Mortgaged Property in an amount equal to the lesser of 100% of the replacement
value of the improvements, as determined by the insurance company, on such
Mortgaged Property or the unpaid principal balance of the Mortgage Loan. The
Master Servicer shall also cause to be maintained on property acquired upon
foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan, fire
insurance with extended coverage in an amount equal to the replacement value of
the improvements thereon. Pursuant to Section 3.10, any amounts collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures) shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 3.11. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating monthly distributions to Certificateholders, be added to the
amount owing under the Mortgage Loan, notwithstanding that the terms of the
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage 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. When the improvements securing a Mortgage
Loan are located at the time of origination of such Mortgage Loan in a federally
designated special flood hazard area, the Master Servicer shall cause flood
insurance (to the extent available) to be maintained in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the replacement
value of the improvements, which are part of such Mortgaged Property on a
replacement cost basis and (ii) the maximum amount of such insurance available
for the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program).

                  In the event that the Master Servicer shall obtain and
maintain a blanket fire insurance policy with extended coverage insuring against
hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in

                                      -42-

<PAGE>

which case the Master Servicer shall, in the event that there shall not have
been maintained on the related Mortgaged Property a policy complying with the
first two sentences of this Section 3.13 and there shall have been a loss which
would have been covered by such policy, deposit in the Certificate Account the
amount not otherwise payable under the blanket policy because of such deductible
clause. Any such deposit by the Master Servicer shall be made on the Certificate
Account Deposit Date next preceding the Distribution Date which occurs in the
month following the month in which payments under any such policy would have
been deposited in the Custodial Account. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
present, on behalf of itself, the Trustee and Certificateholders, claims under
any such blanket policy.

                  SECTION  3.14.      Enforcement of Due-on-Sale Clauses;
                                      Assumption Agreements.

                  The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance by any Mortgagor of the Mortgaged
Property (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note or the
Mortgage), exercise or cause to be exercised its rights to accelerate the
maturity of such Mortgage Loan under any "due-on-sale" clause applicable
thereto; provided, however, that the Master Servicer shall not exercise any such
rights if it reasonably believes that it is prohibited by law from doing so or
if such enforcement will adversely affect or jeopardize required coverage under
the Insurance Instruments. If the Master Servicer is unable to enforce such
"due- on-sale" clause (as provided in the previous sentence) or if no
"due-on-sale" clause is applicable, the Master Servicer or the Sub-Servicer will
enter into an assumption and modification agreement with the Person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
Person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon; provided, however,
that the Master Servicer shall not enter into any assumption and modification
agreement if the coverage provided under the Primary Insurance Policy, if any,
would be impaired by doing so. The Master Servicer is also authorized to enter
into a substitution of liability agreement with such Person, pursuant to which
the original Mortgagor is released from liability and such Person is substituted
as the Mortgagor and becomes liable under the Mortgage Note, if the Master
Servicer shall have determined in good faith that such substitution will not
adversely affect the collectability of the Mortgage Loan. Any fee collected by
or on behalf of the Master Servicer for entering into an assumption or
substitution of liability agreement will be retained by or on behalf of the
Master Servicer as additional servicing compensation. In connection with any
such assumption, no material term of the Mortgage Note (including but not
limited to the Mortgage Rate, the amount of the Monthly Payment and any other
term affecting the amount or timing of payment on the Mortgage Loan) may be
changed. The Master Servicer shall not enter into any substitution or assumption
if such substitution or assumption would constitute a "significant modification"
effecting an exchange or reissuance of such Mortgage Loan under the Code (or
final, temporary or proposed Treasury regulations promulgated thereunder) and
cause the Trust Fund to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or "contributions" after the
Startup Day under the REMIC Provisions. The

                                      -43-

<PAGE>

Master Servicer shall notify the Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Trustee the
original copy of such substitution or assumption agreement, which copy shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption that the
Master Servicer may be restricted by law from preventing, for any reason
whatsoever. For purposes of this Section 3.14, the term "assumption" is deemed
to also include a sale of a Mortgaged Property that is not accompanied by an
assumption or substitution of liability agreement.

                  SECTION  3.15.      Realization Upon Defaulted Mortgage Loans.

                  The Master Servicer shall exercise reasonable efforts,
consistent with the procedures that the Master Servicer would use in servicing
loans for its own account, to foreclose upon or otherwise comparably convert
(which may include an REO Acquisition) the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from the Trust Fund
pursuant to any other provision hereof. The Master Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by Certificateholders, taking
into account, among other things, the timing of foreclosure proceedings. The
foregoing is subject to the provisions that, in any case in which Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
shall not be required to expend its own funds toward the restoration of such
property unless it shall determine in (i) that such restoration will increase
the net proceeds of liquidation of the related Mortgage Loan to
Certificateholders after reimbursement to itself for such expenses, and (ii)
that such expenses will be recoverable by the Master Servicer through Insurance
Proceeds or Liquidation Proceeds from the related Mortgaged Property, as
contemplated in Section 3.11. The Master Servicer shall be responsible for all
other costs and expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof from the related
Mortgaged Property, as contemplated in Section 3.11.

                  The proceeds of any Cash Liquidation or REO Disposition, as
well as any recovery resulting from a partial collection of Insurance Proceeds
or Liquidation Proceeds or any income from an REO Property, will be applied in
the following order of priority: first, to reimburse the Master Servicer or any
Sub- Servicer for any related unreimbursed Servicing Advances, pursuant to
Section 3.11 (vi) or 3.22; second, to accrued and unpaid interest on the
Mortgage Loan or REO Imputed Interest, at the Mortgage Rate, to the date of the
Cash Liquidation or REO Disposition, or to the Due Date prior to the
Distribution Date on which such amounts are to be distributed if not in
connection with a Cash Liquidation or REO Disposition; and third, as a recovery
of principal of the Mortgage

                                      -44-

<PAGE>

Loan. If the amount of the recovery so allocated to interest is less than a full
recovery thereof, that amount will be allocated as follows: first, on a pro rata
basis, to unpaid Servicing Fees; and second, to interest at the related Net
Mortgage Rate. The portion of the recovery so allocated to unpaid Servicing Fees
shall be reimbursed to the Master Servicer or any Sub-Servicer pursuant to
Section 3.11(vi). The portions of the recovery so allocated to interest at the
related Net Mortgage Rate and to principal of the Mortgage Loan shall be applied
as follows: first, to reimburse the Trustee for any unpaid Trustee's Fees,
second, to reimburse the Master Servicer or any Sub-Servicer for any related
unreimbursed Advances in accordance with Section 3. 1 31 (iii) or 3.22, and
third, for distribution in accordance with the provisions of Section 4.01(b) and
4.01(c).

                  SECTION  3.16.      Trustee to Cooperate; Release of Mortgage
                                      Files.

                  Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by a certification (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the Custodial
Account pursuant to Section 3.10 have been or will be so deposited) of a
Servicing Officer and shall request delivery to it of the Mortgage File in the
form of the Request for Release attached hereto as Exhibit F-2. Upon receipt of
such certification and request, the Trustee shall promptly release the related
Mortgage File to the Master Servicer. Subject to the receipt by the Master
Servicer of the proceeds of such payment in full and the payment of all related
fees and expenses, the Master Servicer shall arrange for the release to the
Mortgagor of the original cancelled Mortgage Note. The Master Servicer shall
provide for preparation of the appropriate instrument of satisfaction covering
any Mortgage Loan which pays in full and the Trustee shall cooperate in the
execution and return of such instrument to provide for its delivery or recording
as may be required. All other documents in the Mortgage File shall be retained
by the Master Servicer to the extent required by applicable law. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Custodial Account or the Certificate
Account.

                  From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
the Insurance Instruments or any other insurance policy relating to the Mortgage
Loan, the Trustee shall, upon request of the Master Servicer and delivery to the
Trustee of a Request for Release in the form attached hereto as Exhibit F-1,
release the related Mortgage File to the Master Servicer, and the Trustee shall
execute such documents as the Master Servicer shall prepare and request as being
necessary to the prosecution of any such proceedings. Such Request for Release
shall obligate the Master Servicer to return each document previously requested
from the Mortgage File to the Trustee when the need therefor by the Master
Servicer no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Custodial Account or the Mortgage File or such document has been delivered to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the

                                      -45-

<PAGE>

Master Servicer has delivered to the Trustee a certificate of a Servicing
Officer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer stating that such
Mortgage Loan was liquidated and that all amounts received or to be received in
connection with such liquidation which are required to be deposited into the
Custodial Account have been or will be so deposited, or that such Mortgage Loan
has become an REO Property, the servicing receipt shall be released by the
Trustee to the Master Servicer.

                  Upon written request of a Servicing Officer, the Trustee shall
execute and deliver to the Master Servicer any court pleadings, requests for
trustee's sale or other documents prepared by the Master Servicer that are
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or to any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by the Mortgage Note or Mortgage
or otherwise available at law or in equity. Each such request that such
pleadings or documents be executed by the Trustee shall include a certification
as to the reason such documents or pleadings are required and that the execution
and delivery thereof by the Trustee will not invalidate or otherwise affect the
lien of the Mortgage, except for the termination of such a lien upon completion
of the foreclosure or trustee's sale.

                  SECTION  3.17.      Servicing Compensation.

                  As compensation for its activities hereunder, the Master
Servicer shall be entitled to retain, from deposits to the Custodial Account of
amounts representing payments or recoveries of interest, the Servicing Fees with
respect to each Mortgage Loan (less any portion of such amounts retained by any
Sub-Servicer). In addition, the Master Servicer shall be entitled to recover
unpaid Servicing Fees out of related Late Collections to the extent permitted in
Section 3.11.

                  The Master Servicer also shall be entitled pursuant to Section
3.11 to receive from the Custodial Account, as additional servicing compensation
interest or other income earned on deposits therein, as well as any prepayment
fees, assumption fees, late payment fees and reconveyance fees. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of the premiums for any
Primary Mortgage Insurance Policy or blanket policy insuring against hazard
losses pursuant to Section 3.13, payment of the servicing compensation of the
Sub-Servicer to the extent not retained by it), and shall not be entitled to
reimbursement therefor except as specifically pro vided in Section 3.11. The
Servicing Fee may not be transferred in whole or in part except in connection
with the transfer of all of the Master Servicer's responsibilities and
obligations under this Agreement.

                  SECTION  3.18.      Maintenance of Certain Servicing Policies.

                  During the term of its service as Master Servicer, the Master
Servicer shall maintain in force (i) a policy or policies of insurance covering
errors and omissions in the performance of its obligations as servicer hereunder
and (ii) a fidelity bond in respect of its officers, employees or

                                      -46-

<PAGE>

agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of FNMA or FHLMC for persons performing servicing
for mortgage loans purchased by such corporation. The Master Servicer shall
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such errors and omissions policy or policies or fidelity bond
in a timely fashion in accordance with the terms of such policy or bond, and
upon the filing of any claim on any policy or bond described in this Section,
the Master Servicer shall promptly notify the Trustee of any such claims and the
Trustee shall notify the Rating Agency of such claim.

                  SECTION  3.19.      Annual Statement as to Compliance.

                  The Master Servicer will deliver to the Trustee and the
Company on or before ________ ___ of each year, beginning with _______ ___,
200_, an Officers' Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Master Servicer during the preceding calendar
year and of its performance under this Agreement has been made under such
officers' supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Master Servicer has fulfilled in all material respects its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officers and the nature and status thereof. Copies of such
certificate shall be provided by the Trustee to any Certificateholder upon
request at the Master Servicer's expense, provided such statement is delivered
by the Master Servicer to the Trustee.

                  SECTION  3.20.      Annual Independent Public Accountants'
                                      Servicing Statement.

                  On or before March 31 of each year, beginning with March 31,
20__, the Master Servicer at its expense shall furnish to the Company and the
Trustee a statement from a firm of independent certified public accountants
(which is a member of the American Institute of Certified Public Accountants) to
the effect that, based on an examination by such firm conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
the Audit Program for Mortgages serviced for FHLMC, the servicing of mortgage
loans under agreements (including this Agreement) substantially similar to each
other was conducted in compliance with such agreements except for such
significant exceptions or errors in record that, in the opinion of the firm, the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FHLMC requires it to report. In rendering its statement
such firm may rely, as to the matters relating to the direct servicing of
mortgage loans by Sub-Servicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FHLMC (rendered within one year of such statement) of firms of independent
public accountants with respect to those Sub-Servicers which also have been the
subject of such an examination. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon request at the Master Servicer's
expense, provided such statement is delivered by the Master Servicer to the
Trustee.

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<PAGE>

                  SECTION  3.21.      Access to Certain Documentation.

                  (a) The Master Servicer shall provide to the OTS, the FDIC and
other federal banking regulatory agencies, and their respective examiners,
access to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS, the FDIC and such other agencies. Such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices of the Master Servicer designated by
it. Nothing in this Section shall derogate from the obligation of the Master
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Master Servicer to provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this section.

                  (b) The Master Servicer shall afford the Company and the
Trustee, upon reasonable notice, during normal business hours access to all
records maintained by the Master Servicer in respect of its rights and
obligations hereunder and access to officers of the Master Servicer responsible
for such obligations. Upon request, the Master Servicer shall furnish the
Company and the Trustee with its most recent financial statements and such other
information as the Master Servicer possesses regarding its business, affairs,
property and condition, financial or otherwise to the extent related to the
servicing of the Mortgage Loans. The Company may, but is not obligated to,
enforce the obligations of the Master Servicer hereunder and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation
of the Master Servicer hereunder or exercise the rights of the Master Servicer
hereunder; provided that the Master Servicer shall not be relieved of any of its
obligations hereunder by virtue of such performance by the Company or its
designee. The Company shall not have any responsibility or liability for any
action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.

                  SECTION  3.22.      Title, Conservation and Disposition of REO
                                      Property.

                  This Section shall apply only to REO Properties acquired for
the account of the Trust Fund, and shall not apply to any REO Property relating
to a Mortgage Loan which was purchased or repurchased from the Trust Fund
pursuant to any provision hereof. In the event that title to any such REO
Property is acquired, the deed or certificate of sale shall be issued to the
Trustee, or to its nominee, on behalf of the Certificateholders. The Master
Servicer, on behalf of the Trust Fund, shall either sell any REO Property within
two years after the Trust Fund acquires ownership of such REO Property for
purposes of Section 86OG(a)(8) of the Code or, at the expense of the Trust Fund,
request an extension of the two-year grace period, more than 60 days before the
day on which the two-year grace period would otherwise expire, unless the Master
Servicer has delivered to the Trustee an Opinion of Counsel, addressed to the
Trustee and the Master Servicer, to the effect that the holding by the Trust
Fund of such REO Property subsequent to two years after its acquisition will not
result in the imposition on the Trust Fund of taxes on "prohibited transactions"
thereof, as defined in Section 86OF of the Code, or cause the Trust Fund to fail
to qualify as a REMIC under federal law at any time that any Certificates are
outstanding. The Master Servicer shall manage,

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<PAGE>

conserve, protect and operate each REO Property for the Certificateholders
solely for the purpose of its prompt disposition and sale in a manner which does
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 86OG(a)(8) or result in the receipt by the Trust Fund of
any "income from non- permitted assets" within the meaning of Section
86OF(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under the REMIC Provisions. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Master Servicer deems to be in the best interest of the Certificateholders for
the period prior to the sale of such REO Property.

                  The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets. The Master Servicer
shall deposit, or cause to be deposited, on a daily basis in the Custodial
Account all revenues received with respect to the REO Properties, net of any
directly related expenses incurred or withdraw therefrom funds necessary for the
proper operation, management and maintenance of the REO Property.

                  If as of the date of acquisition of title to any REO Property
there remain outstanding unreimbursed Servicing Advances with respect to such
REO Property or any outstanding Advances allocated thereto the Master Servicer,
upon an REO Disposition, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances and any unreimbursed related Advances as well as
any unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.15.

                  Subject to the first paragraph of this Section 3.22, the REO
Disposition shall be carried out by the Master Servicer at such price and upon
such terms and conditions as the Master Servicer shall determine to be in the
best economic interest of the Trust Fund.

                  Any REO Disposition shall be for cash only (unless changes in
the REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).

                  The Master Servicer shall deposit the proceeds from the REO
Disposition, net of any payment to the Master Servicer as provided above, in the
Custodial Account upon receipt thereof for distribution in accordance with
Section 4.01, including any such net proceeds which are in excess of the
applicable Stated Principal Balance plus all unpaid REO Imputed Interest thereon
through the date of the REO Disposition.

                  Notwithstanding the foregoing provisions of this Section 3.22,
with respect to any Mortgage Loan as to which the Master Servicer has received
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the Mortgaged Property, the Master Servicer shall promptly request
the Trustee and the Company to provide directions and instructions with

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<PAGE>

respect to such Mortgage Loan and shall act in accordance with any such
directions and instructions jointly provided by the Trustee and the Company.
Notwithstanding the preceding sentence of this Section 3.22, with respect to any
Mortgage Loan described by such sentence, the Master Servicer shall not, on
behalf of the Trustee, either (i) obtain title to the related Mortgaged Property
as a result of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire
possession of, the related Mortgaged Property, unless (i) the Company and the
Trustee jointly direct the Master Servicer to take such action and (ii) either
(A) the Master Servicer has, at least 30 days prior to taking such action,
obtained and delivered to the Company an environmental audit report prepared by
a Person who regularly conducts environmental audits using customary industry
standards or (B) the Company has directed the Master Servicer not to obtain an
environmental audit report. If the Trustee and the Company have not jointly
provided directions and instructions to the Master Servicer in connection with
any such Mortgage Loan within 30 days of a request by the Master Servicer for
such directions and instructions, then the Master Servicer shall take such
action as it deems to be in the best economic interest of the Trust Fund (other
than proceeding against the Mortgaged Property) and is hereby authorized at such
time as it deems appropriate to release such Mortgaged Property from the lien of
the related Mortgage.

                  The cost of the environmental audit report contemplated by
this Section 3.22 shall be advanced by the Master Servicer as an expense of the
Trust Fund, and the Master Servicer shall be reimbursed therefor from the
Custodial Account as provided in Section 3.11, any such right of reimbursement
being prior to the rights of the Certificateholders to receive any amount in the
Custodial Account.

                  If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property in compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Master Servicer as
an expense of the Trust Fund, and the Master Servicer shall be entitled to be
reimbursed therefor from the Custodial Account as provided in Section 3.11, any
such right of reimbursement being prior to the rights of the Certificateholders
to receive any amount in the Custodial Account.

                  SECTION  3.23.      Additional Obligations of the Master
                                      Servicer.

                  On each Certificate Account Deposit Date, the Master Servicer
shall deliver to the Trustee for deposit in the Certificate Account from its own
funds and without any right of reimbursement therefor, a total amount equal to
the aggregate of the Prepayment Interest Shortfalls for such Distribution Date;
provided that the Master Servicer's obligations under this subsection on any
Distribution Date shall not be more than the total amount of its master
servicing compensation payable in such month.

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<PAGE>

                  SECTION  3.24.      Additional Obligations of the Company.

                  The Company agrees that on or prior to the tenth day after the
Closing Date, the Company shall provide the Trustee with a written notification,
substantially in the form of Exhibit J attached hereto, relating to each Class
of Certificates, setting forth (i) in the case of each Class of such
Certificates, (a) if less than 10% of the aggregate Certificate Principal
Balance of such Class of Certificates has been sold as of such date, the value
calculated pursuant to clause (b)(iii) of Exhibit J hereto, or, (b) if 10% or
more of such Class of Certificates has been sold as of such date but no single
price is paid for at least 10% of the aggregate Certificate Principal Balance of
such Class of Certificates, then the weighted average price at which the
Certificates of such Class were sold and the aggregate percentage of
Certificates of such Class sold, (c) the first single price at which at least
10% of the aggregate Certificate Principal Balance of such class of Certificates
was sold or, (d) if any Certificates of each Class of Certificates are retained
by the Company or an affiliated corporation, or are delivered to the Seller, the
fair market value of such Certificates as of the Closing Date, (ii) the
prepayment assumption used in pricing the Certificates, and (iii) such other
information as to matters of fact as the Trustee may reasonably request to
enable it to comply with its reporting requirements with respect to each Class
of such Certificates to the extent such information can in the good faith
judgment of the Company be determined by it.

                                      -51-

<PAGE>

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION  4.01.      Certificate Account; Distributions.

                  (a) The Trustee shall establish and maintain a Certificate
Account, in which the Master Servicer shall cause to be deposited on behalf of
the Trustee on or before 3:00 P.M. New York time on each Certificate Account
Deposit Date by wire transfer of immediately available funds an amount equal to
the sum of (i) any Advance for the immediately succeeding Distribution Date,
(ii) any amount required to be deposited in the Certificate Account pursuant to
Sections 3.11, 3.13, 3.23 or 4.03(b) and (iii) all other amounts constituting
or, if not otherwise applicable to the payment of the Trustee's Fee, that would
constitute the Available Distribution Amount for the immediately succeeding
Distribution Date. The Trustee shall transfer from the Certificate Account to
itself, the Trustee's Fee on each Certificate Account Deposit Date. Such amounts
do not constitute part of the Available Distribution Amount.

                  (b) On each Distribution Date the Trustee shall, distribute to
the Master Servicer, in the case of a distribution pursuant to Section
4.01(b)(iii), and to each Certificateholder of record on the next preceding
Record Date (other than as provided in Section 9.01 respecting the final
distribution) either in immediately available funds (by wire transfer or
otherwise) to the account of such Certificateholder at a bank or other entity
having appropriate facilities therefor, if such Certificateholder has so
notified the Trustee at least 5 Business Days prior to the related Record Date
and such Certificateholder is the registered owner of Certificates the aggregate
Initial Certificate Principal Balance of which is not less than $2,500,000 (or,
with respect to the Class A-5 and Class A-7 Certificates, is the registered
owner of an initial Notional Amount of not less than $10,000,000 of each such
class), or otherwise by check mailed to such Certificateholder at the address of
such Holder appearing in the Certificate Register, such Certificateholder's
share (based on the aggregate of the Percentage Interests represented by
Certificates of the applicable Class held by such Holder) of the following
amounts, in the following order of priority, in each case to the extent of the
Available Distribution Amount:

                  (i) to the Class A Certificateholders on a pro rata basis
         based on Accrued Certificate Interest payable thereon, Accrued
         Certificate Interest on such Classes of Certificates for such
         Distribution Date and to the extent not previously paid, for all prior
         Distribution Dates;

                  (ii) to the Class A Certificateholders (other than the Class
         A-5 Certificateholders and the Class A-7 Certificateholders), in the
         priorities and amounts set forth in Sections 4.01(c) and (d), the sum
         of the following (applied to reduce the Certificate Principal Balances
         of such Class A Certificates, as applicable):

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<PAGE>

                  (A) the Senior Percentage for such Distribution Date times the
sum of the following:

                           (1) the principal portion of each Monthly Payment due
                  during the related Due Period on each Outstanding Mortgage
                  Loan, whether or not received on or prior to the related
                  Determination Date, minus the principal portion of any Debt
                  Service Reduction which together with other Bankruptcy Losses
                  exceeds the Bankruptcy Amount;

                           (2) the Stated Principal Balance of any Mortgage Loan
                  purchased during the related Prepayment Period and the amount
                  of any shortfall deposited in the Custodial Account in
                  connection with the substitution of a Deleted Mortgage Loan
                  pursuant to Section 2.04 during the related Prepayment Period;
                  and

                           (3) the principal portion of all other unscheduled
                  collections (other than Principal Prepayments and amounts
                  received in connection with a Cash Liquidation or REO
                  Disposition) received during the related Prepayment Period,
                  including, without limitation, Insurance Proceeds, Liquidation
                  Proceeds and REO Proceeds, to the extent applied by the Master
                  Servicer as recoveries of principal of the related Mortgage
                  Loan pursuant to Section 3.15;

                  (B) with respect to each Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the related Prepayment Period
and did not result in any Excess Special Hazard Losses, Excess Fraud Losses,
Excess Bankruptcy Losses or Extraordinary Losses, an amount equal to the lesser
of (a) the Senior Percentage for such Distribution Date times the Stated
Principal Balance of such Mortgage Loan and (b) the Senior Accelerated
Distribution Percentage for such Distribution Date times the related unscheduled
collections (including without limitation Insurance Proceeds, Liquidation
Proceeds and REO Proceeds) to the extent applied by the Master Servicer as
recoveries of principal of the related Mortgage Loan pursuant to Section 3.15;

                  (C) the Senior Accelerated Distribution Percentage for such
Distribution Date times the aggregate of all Principal Prepayments in Full and
Curtailments received in the related Prepayment Period; and

                  (D) any amounts described in clauses (A), (B) and (C) of this
Section 4.01 (b)(ii), as determined for any previous Distribution Date, which
remain unpaid after application of amounts previously distributed pursuant to
this clause (D) to the extent that such amounts are not attributable to Realized
Losses which have been allocated to the Class B Certificates;

                  (iii) if the Certificate Principal Balances of the Class B
         Certificates have not been reduced to zero, to the Master Servicer or a
         Sub-Servicer, to the extent of and in reimbursement for any Advances
         previously made with respect to any Mortgage Loan or REO Property which
         remain unreimbursed in whole or in part following the Cash

                                      -53-

<PAGE>

         Liquidation or REO Disposition of such Mortgage Loan or REO Property,
         minus any such Advances that were made with respect to delinquencies
         that ultimately constituted Excess Special Hazard Losses, Excess Fraud
         Losses, Excess Bankruptcy Losses or Extraordinary Losses;

                  (iv) to the Holders of the Class B Certificates, the Accrued
         Certificate Interest thereon for such Distribution Date, plus any
         Accrued Certificate Interest thereon remaining unpaid from any previous
         Distribution Date, except as provided below;

                  (v) to the Holders of the Class B Certificates, an amount
         equal to the Subordinate Principal Distribution Amount for such Class
         of Certificates for such Distribution Date, applied in reduction of the
         Certificate Principal Balance of the Class B Certificates;

                  (vi) to the Class A Certificateholders (other than the Class
         A-5 and Class A-7 Certificateholders) in the priority set forth in
         Section 4.01(c), the portion, if any, of the Available Distribution
         Amount remaining after the foregoing distributions, applied to reduce
         the Certificate Principal Balances of such Class A Certificates, but in
         no event more than the sum of the outstanding Certificate Principal
         Balances of the Class A Certificates (other than the Class A-5 and
         Class A-7 Certificates) and thereafter applied to reduce the
         Certificate Principal Balance of the Class B Certificates, but in no
         event more than the outstanding Certificate Principal Balance of the
         Class B Certificates; and

                  (vii)    to the Class R Certificateholders, the balance, if
         any, of the Available Distribution Amount.

                  (c) Distributions of principal on the Class A Certificates
(other than the Class A-5 and Class A-7 Certificates) on each Distribution Date
occurring prior to the occurrence of the Credit Support Depletion Date will be
made as follows:

                  (i) first, to the Class A-1 Certificates and Class A-6
         Certificates, with the amount to be distributed allocated as between
         such classes on a pro rata basis, until the Certificate Principal
         Balance of each such Class has been reduced to zero;

                  (ii)     second, to the Class A-2 Certificates, until the
         Certificate Principal Balance thereof has been reduced to zero;

                  (iii)    third, to the Class A-3 Certificates, until the
         Certificate Principal Balance thereof has been reduced to zero; and

                  (iv) fourth, to the Class A-4 Certificates, until the
         Certificate Principal Balance thereof has been reduced to zero.

                                      -54-

<PAGE>

                  (d) On each Distribution Date occurring on or after the Credit
Support Depletion Date, all priorities relating to sequential distributions in
respect of principal among the various classes of Senior Certificates will be
disregarded, and the Senior Principal Distribution Amount will be distributed to
all classes of Senior Certificates pro rata in accordance with their respective
outstanding Certificate Principal Balances; provided, that the aggregate amount
distributable to the Class A-1, Class A-5 and Class A-6 Certificates (the
"Tiered Certificates") in respect of Accrued Certificate Interest thereon and in
respect of their pro rata portion of the Senior Principal Distribution Amount
shall be distributed among the Tiered Certificates in the amounts and priority
as follows: first, to the Class A-1 Certificates and the Class A-5 Certificates,
up to an amount equal to, and pro rata based on, the Accrued Certificate
Interest thereon; second to the Class A-1 Certificates, up to an amount equal to
the Optimal Principal Distribution Amount thereof, in reduction of the
Certificate Principal Balances thereof; third to the Class A-6 Certificates, up
to an amount equal to the Accrued Certificate Interest thereon; and fourth to
the Class A-6 Certificates the remainder of the amount so distributable among
the Tiered Certificates.

                  (e) The Trustee shall, upon written request from the Master
Servicer, invest or cause the institution maintaining the Certificate Account to
invest the funds in the Certificate Account in Permitted Instruments designated
in the name of the Trustee for the benefit of the Certificateholders, which
shall mature not later than the Business Day next preceding the Distribution
Date next following the date of such investment (except that (i) any investment
in obligations of the institution with which the Certificate Account is
maintained may mature on such Distribution Date and (ii) any other investment
may mature on such Distribution Date if the Trustee shall agree to advance funds
on such Distribution Date to the Certificate Account in the amount payable on
such investment on such Distribution Date, pending receipt thereof to the extent
necessary to make distributions on the Certificates) and shall not be sold or
disposed of prior to maturity. All income and gain realized from any such
investment shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of any such investments shall be deposited in the Certificate Account
by the Master Servicer out of its own funds immediately as realized without
right of reimbursement.

                  SECTION  4.02.      Statements to Certificateholders.

                  On each Distribution Date the Trustee shall forward or cause
to be forwarded by mail to each Holder of a Certificate and to the Company and
the Master Servicer a statement as to such distribution setting forth the
following information as to each Class of Certificates to the extent applicable:

                  (i) (a) the amount of such distribution to the
         Certificateholders of such Class applied to reduce the Certificate
         Principal Balance thereof, and (b) the aggregate amount included
         therein representing Principal Prepayments;

                  (ii)     the amount of such distribution to the
         Certificateholders of such Class allocable to interest;

                                      -55-

<PAGE>

                  (iii) if the distribution to the Certificateholders of such
         Class is less than the full amount that would be distributable to such
         Certificateholders if there were sufficient funds available therefor,
         the amount of the shortfall;

                  (iv)     the amount of any Advance by the Master Servicer
         pursuant to Section 4.04;

                  (v)      the number and aggregate Stated Principal Balance of
         the Mortgage Loans after giving effect to the distribution of
         principal on such Distribution Date;

                  (vi) the aggregate Certificate Principal Balance of each Class
         of Certificates, after giving effect to the amounts distributed on such
         Distribution Date, separately identifying any reduction thereof due to
         Realized Losses other than pursuant to an actual distribution of
         principal;

                  (vii)    the related Subordinate Principal Distribution
         Amount;

                  (viii)   the amount of Servicing Fees paid to the Master
         Servicer;

                  (ix) on the basis of the most recent reports furnished to it
         by Sub-Servicers, the number and aggregate principal balances of
         Mortgage Loans that are delinquent (A) one month, (B) two months and
         (C) three months, and the number and aggregate principal balance of
         Mortgage Loans that are in foreclosure;

                  (x)      the number, aggregate principal balance and book
         value of any REO Properties;

                  (xi) the aggregate Accrued Certificate Interest remaining
         unpaid, if any, for each Class of Certificates, after giving effect to
         the distribution made on such Distribution Date;

                  (xii) the Special Hazard Amount, Fraud Loss Amount and
         Bankruptcy Amount as of the close of business on such Distribution Date
         and a description of any change in the calculation of such amounts;

                  (xiii)   the Pass-Through Rate on the Class A-7 Certificates
         for such Distribution Date;

                  (xiv)    the occurrence of the Credit Support Depletion Date;

                  (xv)     the Senior Accelerated Distribution Percentage
         applicable to such distribution;

                  (xvi)    the Senior and Class B Percentages for such
         Distribution Date;

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<PAGE>

                  (xvii)   the aggregate amount of Realized Losses allocated to
         the Certificates on such Distribution Date;

                  (xviii)  the aggregate amount of any recoveries on previously
         foreclosed loans from the Seller due to a breach of representation or
         warranty;

                  (xix) the weighted average remaining term to maturity of the
         Mortgage Loans after giving effect to the amounts distributed on such
         Distribution Date; and

                  (xx) the weighted average Mortgage Rates of the Mortgage Loans
         after giving effect to the amounts distributed on such Distribution
         Date.

                  In the case of information furnished pursuant to subclauses
(i) and (ii) above, the amounts shall also be expressed as a dollar amount per
Single Certificate. Within a reasonable period of time after the end of each
calendar year, the Trustee shall prepare and forward to each Person who at any
time during the calendar year was a Holder of a Certificate, a statement
containing the information set forth in subclauses (i) and (ii) above,
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code and regulations thereunder as from time to time are in force.

                  SECTION  4.03.      Remittance Reports; Advances by the Master
                                      Servicer.

                  (a) By 11:00 A.M. New York time the Business Day following
each Determination Date, the Master Servicer shall deliver to the Trustee a
report, prepared as of the close of business on the Determination Date (the
"Determination Date Report"), by telecopy or in a mutually agreeable electronic
format. The Determination Date Report and any written information supplemental
thereto shall include such information with respect to the Mortgage Loans that
is reasonably available to the Master Servicer and that is required by the
Trustee for purposes of making the calculations referred to in the following
paragraph, as set forth in written specifications or guidelines issued by the
Trustee from time to time. Not later than 2:00 P.M. New York time on the
Certificate Account Deposit Date, the Trustee shall furnish by telecopy to the
Master Servicer a statement (the information in such statement to be made
available to Certificateholders or the Company by the Master Servicer on
request) setting forth (i) the Available Distribution Amount, (ii) the amounts
required to be withdrawn from the Custodial Account and deposited into the
Certificate Account on the immediately succeeding Certificate Account Deposit
Date pursuant to clause (iii) of Section 4.01 (a); and (iii) such other
information with respect to the Mortgage Loans as the Trustee may reasonably
require to perform the calculations necessary to make the distributions
contemplated by Section 4.01 and to prepare the statements to Certificateholders
contemplated by Section 4.02. The determination by the Trustee of such amounts
shall, in the absence of obvious error, be presumptively deemed to be correct
for all purposes hereunder.

                                      -57-

<PAGE>

                  (b) Not later than 2:00 P.M. New York time on the Certificate
Account Deposit Date, the Trustee shall notify the Master Servicer of the
aggregate amount of Advances required to be made for the related Distribution
Date, which shall be the aggregate amount of Monthly Payments (with each
interest portion thereof adjusted to be net of the related Servicing Fee Rate),
less the amount of any related Debt Service Reductions or reductions in the
amount of interest collectable from the Mortgagor pursuant to the Relief Act, on
the Outstanding Mortgage Loans as of the related Due Date, which Monthly
Payments were delinquent as of the close of business as of the related
Determination Date, provided that following the reduction of the Certificate
Principal Balances of the Class B Certificates to zero no Advance shall be made
if it would be a Nonrecoverable Advance. On or before 3:00 P.M. New York time on
each Certificate Account Deposit Date, the Master Servicer shall either (i)
deposit in the Certificate Account from its own funds, or funds received
therefor from the Sub-Servicers, an amount equal to the Advances to be made by
the Master Servicer in respect of the related Distribution Date, (ii) withdraw
from amounts on deposit in the Custodial Account and deposit in the Certificate
Account all or a portion of the amounts held for future distribution in
discharge of any such Advance, or (iii) make advances in the form of any
combination of (i) and (ii) aggregating the amount of such Advance. Any portion
of the amounts held for future distribution so used shall be replaced by the
Master Servicer by deposit in the Custodial Account on or before 12: 00 P.M. New
York time on any future Certificate Account Deposit Date to the extent that
funds attributable to the Mortgage Loans that are available in the Custodial
Account for deposit in the Certificate Account on such Certificate Account
Deposit Date shall be less than payments to Certificateholders required to be
made on the following Distribution Date. The amount of any reimbursement
pursuant to Section 4.01(b)(iii) in respect of outstanding Advances on any
Distribution Date shall be allocated to specific Monthly Payments due but
delinquent for previous Due Periods, which allocation shall be made, to the
extent practicable, to Monthly Payments which have been delinquent for the
longest period of time. Such allocations shall be conclusive for purposes of
reimbursement to the Master Servicer from recoveries on the Mortgage Loans
pursuant to Section 3.11. The determination by the Master Servicer that it has
made a Nonrecoverable Advance or that any proposed Advance, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by a certificate of a
Servicing Officer delivered to the Seller and the Trustee. The Trustee shall
deposit all funds it receives pursuant to this Section 4.03 into the Certificate
Account.

                  (c) In the event that the Master Servicer determines on the
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date in the amount determined by the Trustee
pursuant to paragraph (b) above, it shall give notice to the Trustee of its
inability to advance (such notice may be given by telecopy), not later than 3:00
P.M., New York time, on such Business Day, specifying the portion of such amount
that it will be unable to deposit. If the Master Servicer shall have determined
that it is not obligated to make the entire Advance because all or a lesser
portion of such Advance would not be recoverable from Insurance Proceeds,
Liquidation Proceeds or otherwise, the Master Servicer shall promptly deliver to
the Trustee for the benefit of the Certificateholders an Officer's Certificate
setting forth the reasons for the Master Servicer's determination. Not later
than 5:00 P.M., New York time, on the Certificate Account Deposit Date, unless
by such time the Master Servicer shall have directly or indirectly deposited in

                                      -58-

<PAGE>

the Certificate Account the entire amount of the Advances required to be made
for the related Distribution Date, pursuant to Section 7.01, the Trustee shall
(a) terminate all of the rights and obligations of the Master Servicer under
this Agreement in accordance with Section 7.01 and (b) assume the rights and
obligations of the Master Servicer hereunder, including the obligation to
deposit in the Certificate Account an amount equal to the Advance for the
immediately succeeding Distribution Date.

                  SECTION  4.04.      Allocation of Realized Losses.

                  Prior to each Distribution Date, the Master Servicer shall
determine the total amount of Realized Losses, if any, that resulted from any
Cash Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition
that occurred during the related Prepayment Period. The amount of each Realized
Loss shall be evidenced by an Officers' Certificate by the Master Servicer.
Realized Losses shall be allocated among the various Classes of Certificates as
determined by the Trustee in accordance with the following provisions. All
Realized Losses, other than Excess Special Hazard Losses, Excess Bankruptcy
Losses, Excess Fraud Losses or Extraordinary Losses shall be allocated as
follows: first, to the Class B Certificates until the Certificate Principal
Balance thereof has been reduced to zero; and second, among all the Class A
Certificates as described below. Any Excess Special Hazard Losses, Excess
Bankruptcy Losses, Excess Fraud Losses and Extraordinary Losses on Mortgage
Loans will be allocated among the Class A and Class B Certificates on a pro rata
basis, as described below. As used herein, an allocation of a Realized Loss on a
"pro rata basis" among two or more specified Classes of Certificates means an
allocation on a pro rata basis, without priority among the various Classes so
specified, to each such Class of Certificates on the basis of the then
outstanding Certificate Principal Balances thereof in the case of the principal
portion of a Realized Loss or based on the Accrued Certificate Interest thereon
in the case of an interest portion of a Realized Loss. Allocations of Realized
Losses which are Default Losses to the Class A Certificates will be made on a
pro rata basis, based on their then outstanding Certificate Principal Balances,
or the Accrued Certificate Interest thereon, as applicable, between the Class A-
1, Class A-5 and Class A-6 Certificates, on the one hand, and the Class A-2,
Class A-3, Class A-4 and Variable Strip Certificates, on the other. Any such
Realized Losses so allocated to the Class A-1, Class A-5 and Class A-6
Certificates will be allocated first to the Class A-6 Certificates until the
Certificate Principal Balance thereof or the Accrued Certificate Interest
thereon, as appropriate, is reduced to zero and then to the Class A-1 and Class
A-5 Certificates on a pro rata basis. Any allocation of the principal portion of
Realized Losses (other than Debt Service Reductions) to a Class A Certificate
shall be made by reducing the Certificate Principal Balance thereof by the
amount so allocated, which allocation shall be deemed to have occurred at the
close of business on such Distribution Date. Any allocation of the principal
portion of Realized Losses (other than Debt Service Reductions) to the Class B
Certificates, shall be made by operation of the definition of "Certificate
Principal Balance" and by operation of the provisions of Section 4.01(b).
Allocations of the interest portions of Realized Losses shall be made by
operation of the definition of "Accrued Certificate Interest" and by operation
of the provisions of Section 4.01(b) or 4.01(d), as applicable. Allocations of
the principal portion of Debt Service Reductions shall be made by operation of
the provisions of Section 4.01(b) or 4.01(d), as applicable. All Realized Losses
and all other losses

                                      -59-

<PAGE>

allocated to a Class of Certificates under this Section 4.04 will be allocated
among the Certificates of such Class in proportion to the Percentage Interests
evidenced thereby.

                  SECTION  4.05.      Information Reports to be Filed by the
                                      Master Servicer.

                  The Master Servicer or the Sub-Servicers shall file the
information returns with respect to the receipt of mortgage interest received in
a trade or business, reports of foreclosures and abandonments of any Mortgaged
Property and the information returns relating to cancellation of indebtedness
income with respect to any Mortgaged Property required by Sections 6050H, 6050J
and 6050P of the Code, respectively, and deliver to the Trustee an Officers'
Certificate stating that such reports have been filed. Such reports shall be in
form and substance sufficient to meet the reporting requirements imposed by such
Sections 6050H, 6050J and 6050P of the Code.

                  SECTION  4.06.      Compliance with Withholding Requirements.

                  Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount on the
Mortgage Loans, and payments of interest or discount on amounts invested by the
Trustee as agent for Certificateholders pursuant to an election made under
Section 4.01 hereof, that the Trustee reasonably believes are applicable under
the Code. The consent of Certificateholders shall not be required for such
withholding. In the event the Trustee withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee shall, together with
its monthly report to such Certificateholders pursuant to Section 4.02 hereof,
indicate such amount withheld.

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<PAGE>

                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION  5.01.      The Certificates.

                  The Certificates will be substantially in the respective forms
annexed hereto as Exhibits A-1, A-2 and B. The Certificates will be issuable in
registered form only. The Class A Certificates, other than the Class A-5 and
Class A-7 Certificates, shall be issuable in minimum dollar denominations of
$1,000 and integral multiples of $1 in excess thereof, except that one
Certificate of each Class of Class A Certificates may be issued in an amount
such that the denomination of such Certificate and the aggregate denomination of
all other outstanding Certificates of such Class together equal the aggregate
Certificate Principal Balance of such Class. The Class B Certificates shall be
issuable in minimum dollar denominations of $25,000 and integral multiples of $1
in excess thereof, except that one Certificate of such Class may be issued in an
amount such that the denomination of such Certificate and the aggregate
denomination of all other outstanding Certificates of such Class together equal
the aggregate Certificate Principal Balance of such Class. The Class A-5 and
Class A-7 Certificates shall be issuable in minimum Notional Amounts of $1,000
and integral multiples of $1 in excess thereof, except that one Certificate of
each such Class may be issued in an amount such that the denomination of such
Certificate and the aggregate denomination of all other outstanding Certificates
of such Class together equal the aggregate Notional Amount of such Class. The
Class R Certificates will each be issuable in minimum denominations of any
Percentage Interest representing 20% and integral multiples of 0.01% in excess
thereof, provided, however, that one Class R Certificate may be issued to the
"tax matters person" pursuant to Article X, in a minimum denomination
representing a Percentage Interest of not less than 0.01%.

                  Upon original issue, the Certificates shall, upon the written
request of the Company executed by an officer of the Company, be executed and
delivered by the Trustee, authenticated by the Trustee and delivered to or upon
the order of the Company upon receipt by the Trustee of the documents specified
in Section 2.01. The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee in its capacity as trustee hereunder by a
Responsible Officer. Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates issued on the Closing
Date shall be dated the Closing Date and any Certificates delivered thereafter
shall be dated the date of their authentication.

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<PAGE>

                  SECTION  5.02.      Registration of Transfer and Exchange of
                                      Certificates.

                  The Trustee shall maintain 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.

                  No transfer, sale, pledge or other disposition of a Class B or
a Class R Certificate shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Act"), and any applicable state securities laws or is
made in accordance with said Act and laws. In the event that a transfer of a
Class B or Class R Certificate is to be made (i) the Depositor may direct the
Trustee to require a written Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee and the Depositor that such transfer shall
be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from said Act and laws or is being made pursuant to said Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee, the
Depositor or the Master Servicer, provided that such Opinion of Counsel will not
be required in connection with the initial transfer of any such Certificate by
the Depositor or any affiliate thereof, to a non-affiliate of the Depositor and
(ii) the Trustee shall require the transferee to execute a representation
letter, substantially in the form of Exhibit G-1 hereto, and the Trustee shall
require the transferor to execute a representation letter, substantially in the
form of Exhibit G-2 hereto, each acceptable to and in form and substance
satisfactory to the Depositor and the Trustee certifying to the Depositor and
the Trustee the facts surrounding such transfer, which representation letters
shall not be an expense of the Trustee, the Depositor or the Master Servicer.
Any such Certificateholder desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Depositor and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such applicable federal and state laws.

                  The Trustee shall require a written Opinion of Counsel from a
prospective transferee prior to the transfer of any Class B or Class R
Certificate to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and Keogh plans, that is subject to
Section 406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Code (any of the foregoing, a "Plan"), to a
trustee or other Person acting on behalf of any Plan, or to any other person who
is using "plan assets" of any Plan to effect such acquisition (including any
insurance company using funds in its general or separate accounts that may
constitute "plan assets"). Such Opinion of Counsel must establish to the
satisfaction of the Depositor and the Trustee or the Certificate Registrar that
such disposition will not violate the prohibited transaction provisions of
Section 406 of ERISA and Section 4975 of the Code. Neither the Depositor, the
Master Servicer nor the Trustee will be required to obtain such Opinion of
Counsel on behalf of any prospective transferee. In the case of any transfer of
the foregoing Certificates to an insurance company, in lieu of such Opinion of
Counsel, the Trustee shall require a certification in the form of Exhibit G-5
hereto substantially to the effect that all funds used by such transferee to
purchase such Certificates will be funds held by it in its general account which
it reasonably believes do not constitute "plan assets" of any Plan (as defined
above). The permission

                                      -62-

<PAGE>

of any transfer in violation of the restriction on transfer set forth in this
paragraph shall not constitute a default or an Event of Default.

                  (i) Each Person who has or who acquires any Ownership Interest
         in a Class R Certificate shall be deemed by the acceptance or
         acquisition of such Ownership Interest to have agreed to be bound by
         the following provisions and to have irrevocably authorized the Trustee
         or its designee under clause (iii)(A) below to deliver payments to a
         Person other than such Person and to negotiate the terms of any
         mandatory sale under clause (iii)(B) below and to execute all
         instruments of transfer and to do all other things necessary in
         connection with any such sale. The rights of each Person acquiring any
         Ownership Interest in a Class R Certificate are expressly subject to
         the following provisions:

                  (A) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a Permitted
Transferee.

                  (B) In connection with any proposed transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery to it, and
shall not register the transfer of any Class R Certificate until its receipt of
(1) an affidavit and agreement (a "Transfer Affidavit and Agreement" in the form
attached hereto as Exhibit G-3) from the proposed Transferee, in form and
substance satisfactory to the Master Servicer and the Trustee representing and
warranting, among other things, that it is a Permitted Transferee, that it is
not acquiring its Ownership Interest in the Class R Certificate that is the
subject of the proposed Transfer as a nominee, trustee or agent for any Person
who is not a Permitted Transferee, that for so long as it retains its Ownership
Interest in a Class R Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of this Section 5.02 and
agrees to be bound by them, and (11) a certificate, in the form attached hereto
as Exhibit G-4, from the Holder wishing to transfer the Class R Certificate, in
form and substance satisfactory to the Master Servicer and the Trustee
representing and warranting, among other things, that no purpose of the proposed
Transfer is to impede the assessment or collection of tax.

                  (C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a Responsible
Officer of the Trustee assigned to this transaction has actual knowledge that
the proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee shall be
effected.

                  (D) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to transfer its
Ownership Interest in a Class R Certificate and (y) not to transfer its
Ownership Interest unless it provides a certificate to the Trustee in the form
attached hereto as Exhibit G-4.

                                      -63-

<PAGE>

                  (E) Each Person holding or acquiring an Ownership Interest in
a Class R Certificate, by purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is a "pass- through interest
holder" within the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Class
R Certificate, if it is "a pass-through interest holder", or is holding an
Ownership Interest in a Class R Certificate on behalf of a "pass-through
interest holder."

                  (ii) The Trustee will register the Transfer of any Class R
         Certificate only if it shall have received the Transfer Affidavit and
         Agreement in the form attached hereto as Exhibit G-3, a certificate of
         the holder requesting such transfer in the form attached hereto as
         Exhibit G-4 and all of such other documents as shall have been
         reasonably required by the Trustee as a condition to such registration.
         Transfers of the Class R Certificates to Non-United States Persons and
         Disqualified Organizations are prohibited.

                  (iii) (a) if any Disqualified Organization shall become a
         holder of a Class R Certificate, then the last preceding Permitted
         Transferee shall be restored, to the extent permitted by law, to all
         rights and obligations as holder thereof retroactive to the date of
         registration of such Transfer of such Class R Certificate. If a
         Non-United States Person shall become a holder of a Class R
         Certificate, then the last preceding United States Person shall be
         restored, to the extent permitted by law, to all rights and obligations
         as holder thereof retroactive to the date of registration of such
         Transfer of such Class R Certificate. If a transfer of a Class R
         Certificate is disregarded pursuant to the provisions of Treasury
         Regulations Section 1.860E-1 or Section 1.86OG-3, then the last
         preceding Permitted Transferee shall be restored, to the extent
         permitted by law, to all rights and obligations as holder thereof
         retroactive to the date of registration of such Transfer of such Class
         R Certificate. The Trustee shall be under no liability to any Person
         for any registration of Transfer of a Class R Certificate that is in
         fact not permitted by this Section 5.02 or for making any payments due
         on such Certificate to the holder thereof or for taking any other
         action with respect to such holder under the provisions of this
         Agreement.

                           (b) If any purported Transferee shall become a holder
         of a Class R Certificate in violation of the restrictions in this
         Section 5.02 and to the extent that the retroactive restoration of the
         rights of the holder of such Class R Certificate as described in clause
         (iii)(a) above shall be invalid, illegal or unenforceable, then the
         Trustee shall have the right, without notice to the holder or any prior
         holder of such Class R Certificate, to sell such Class R Certificate to
         a purchaser selected by the Trustee on such terms as the Trustee may
         choose. Such purported Transferee shall promptly endorse and deliver
         each Class R Certificate in accordance with the instructions of the
         Trustee. Such purchaser may be the Trustee itself. The proceeds of such
         sale, net of the commissions (which may include commissions payable to
         the Trustee), expenses and taxes due, if any, will be remitted by the
         Trustee to such purported Transferee. The terms and conditions of any
         sale under this clause (iii)(b) shall be determined in the sole
         discretion of the Trustee, and the Trustee shall not be

                                      -64-

<PAGE>

         liable to any Person having an Ownership Interest in a Class R
         Certificate as a result of its exercise of such discretion.

                  (iv) The Trustee shall make available to the Internal Revenue
         Service and those Persons specified by the REMIC Provisions, all
         information necessary to compute any tax imposed (A) as a result of the
         transfer of an ownership interest in a Class R Certificate to any
         Person who is a Disqualified Organization, including the information
         regarding "excess inclusions" of such Class R Certificates required to
         be provided to the Internal Revenue Service and certain Persons as
         described in Treasury Regulations Sections 1.86OD-l(b)(5) and 1.860E
         2(a)(5), and (B) as a result of any regulated investment company, real
         estate investment trust, common trust fund, partnership, trust, estate
         or organization described in Section 1381 of the Code that holds an
         Ownership Interest in a Class R Certificate having as among its record
         holders at any time any Person who is a Disqualified Organization. The
         Trustee may charge and shall be entitled to reasonable compensation for
         providing such information as may be required from those Persons which
         may have had a tax imposed upon them as specified in clauses (A) and
         (B) of this paragraph for providing such information.

                  Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate at the office of the Trustee
maintained for such purpose, the Trustee shall execute and the Trustee or the
Authenticating Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class of a like aggregate initial Certificate Principal Balance. Every
Certificate surrendered for transfer shall be accompanied by notification of the
account of the designated transferee or transferees for the purpose of receiving
distributions pursuant to Section 4.01 by wire transfer, if any such transferee
desires and is eligible for distribution by wire transfer.

                  At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of the same Class
of a like aggregate initial Certificate Principal Balance, upon surrender of the
Certificates to be exchanged at the office of the Certificate Registrar.
Whenever any Certificates are so surrendered for exchange the Trustee shall
execute, authenticate and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall (if so required by the Trustee or the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee or the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.

                  No service charge shall be made to the Certificateholders 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.

                  All Certificates surrendered for transfer and exchange shall
be canceled and retained by the Trustee in accordance with the Trustee's
standard procedures.

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<PAGE>

                  SECTION  5.03.      Mutilated, Destroyed, Lost or Stolen
                                      Certificates.

                  If (i) any mutilated Certificate is surrendered to the Trustee
and 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 may be required by it to save it harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same Class and initial Certificate
Principal Balance. Upon the issuance of any new Certificate under this Section,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.

                  SECTION  5.04.      Persons Deemed Owners.

                  The Company, the Master Servicer, the Trustee and any agent of
any of them 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 4.01 and for all other purposes whatsoever, and neither the
Company, the Master Servicer, the Trustee nor any agent of any of them shall be
affected by notice to the contrary.

                                      -66-

<PAGE>

                                   ARTICLE VI

                       THE COMPANY AND THE MASTER SERVICER

                  SECTION  6.01.      Liability of the Company and the Master
                                      Servicer.

                  The Company and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Company and the Master Servicer herein.

                  SECTION  6.02.      Merger, Consolidation or Conversion of the
                                      Company or the Master Servicer.

                  The Company and the Master Servicer each will keep in full
effect its existence, rights and franchises as a corporation under the laws of
the state of its incorporation, and each 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 respective duties under this Agreement; and provided further
that the Rating Agencies' ratings of the Class A Certificates immediately prior
to such merger or consolidation will not be qualified, reduced or withdrawn as a
result thereof (as evidenced by a letter to such effect from the Rating
Agencies).

                  Any Person into which the Company or the Master Servicer may
be merged, consolidated or converted, or any corporation resulting from any
merger or consolidation to which the Company or the Master Servicer shall be a
party, or any Person succeeding to the business of the Company or the Master
Servicer, shall be the successor of the Company or the Master Servicer, as the
case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the successor or surviving
Person to the Master Servicer shall be qualified to sell mortgage loans to and
service mortgage loans for FNMA or FHLMC.

                  SECTION  6.03.      Limitation on Liability of the Company,
                                      the Master Servicer and Others.

                  Neither the Company, the Master Servicer nor any of the
directors, officers, employees or agents of the Company or the Master Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Company or the Master Servicer (but this
provision shall protect the above described persons) against any breach of
warranties or representations made herein, or against any specific liability
imposed on the Master Servicer pursuant to Section 3.01 or any other Section
hereof; and provided further that this provision shall not protect the Company,
the Master Servicer or any such person, against any liability which would
otherwise be imposed by reason of willful

                                      -67-

<PAGE>

misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Company,
the Master Servicer and any director, officer, employee or agent of the Company
or 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. The Company, the Master Servicer and any director, officer,
employee or agent of the Company or the Master Servicer shall be indemnified and
held harmless by the Trust Fund against any loss, liability or expense incurred
in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to Master
Servicer's servicing obligations with respect to any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or related to the Master Servicer's
obligations under Section 3.01, or any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder.

                   Neither the Company nor the Master Servicer shall be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its respective duties under this Agreement and which in its
opinion may involve it in any expense or liability; provided, however, that the
Company or the Master Servicer may in its sole discretion 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 (except any action or
liability related to the Master Servicer's obligations under Section 3.01) shall
be expenses, costs and liabilities of the Trust Fund, and the Company and the
Master Servicer shall be entitled to be reimbursed therefor from the Certificate
Account as provided in Section 3.11, any such right of reimbursement being prior
to the rights of Certificateholders to receive any amount in the Certificate
Account.

                  SECTION  6.04.      Limitation on Resignation of the Master
                                      Servicer.

                  The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (a) upon appointment of a successor servicer
reasonably acceptable to the Trustee and upon receipt by the Trustee of a letter
from each Rating Agency that such a resignation and appointment will not, in and
of itself, result in a downgrading of the Certificates or (b) upon determination
that its duties hereunder are no longer permissible under applicable law (any
such determination permitting the resignation of the Master Servicer to be
evidenced by an Opinion of Counsel (at the expense of the resigning Master
Servicer) to such effect delivered to the Trustee). No such resignation shall
become effective until the Trustee or a successor servicer shall have assumed
the Master Servicer's responsibilities, duties, liabilities and obligations
hereunder.

                                      -68-

<PAGE>

                                   ARTICLE VII

                                     DEFAULT

                  SECTION  7.01.      Events of Default.

                  "Event of Default", wherever used herein, means any one of the
following events:

                  (i) any failure by the Master Servicer to remit to the Trustee
         for distribution to the Certificateholders any payment (other than an
         Advance) required to be made under the terms of the Certificates or
         this Agreement which continues unremedied for a period of one day after
         the date upon which written notice of such failure, requiring the same
         to be remedied, shall have been given to the Master Servicer by the
         Company (with a copy to the Trustee) or the Trustee, or to the Master
         Servicer, the Company and the Trustee by the Holders of Certificates
         entitled to at least 25% of the Voting Rights; or

                  (ii) any failure on the part of the Master Servicer duly to
         observe or perform in any material respect any other of the covenants
         or agreements on the part of the Master Servicer contained in the
         Certificates or in this Agreement (including any breach of the Master
         Servicer's representations and warranties pursuant to Section 2.03(a)
         which materially and adversely affects the interests of the
         Certificateholders) which continues unremedied for a period of 30 days
         after the date on which written notice of such failure, requiring the
         same to be remedied, shall have been given to the Master Servicer by
         the Company (with a copy to the Trustee) or the Trustee, or to the
         Master Servicer, the Company and the Trustee by the Holders of
         Certificates entitled to at least 25% of the Voting Rights; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in an involuntary case under any present
         or future federal or state bankruptcy, insolvency or similar law or the
         appointment of a conservator or receiver or liquidator in any
         insolvency, readjustment of debt, marshalling of assets and liabilities
         or similar proceedings, or for the winding-up or liquidation of its
         affairs, shall have been entered against the Master Servicer and such
         decree or order shall have remained in force undischarged or unstayed
         for a period of 60 consecutive days; or

                  (iv) the Master Servicer shall consent to the appointment of a
         conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshalling of assets and liabilities or similar proceedings
         of or relating to the Master Servicer or of or relating to all or
         substantially all of its property; or

                  (v) the Master Servicer shall admit in writing its inability
         to pay its debts generally as they become due, file a petition to take
         advantage of or otherwise voluntarily commence a case or proceeding
         under any applicable bankruptcy, insolvency, reorganization

                                      -69-

<PAGE>

         or other similar statute, make an assignment for the benefit of its
         creditors, or voluntarily suspend payment of its obligations; or

                  (vi) the Master Servicer shall fail to deposit in the
         Certificate Account on any Certificate Account Deposit Date an amount
         equal to any required Advance.

                  If the Master Servicer shall fail to make any deposit in the
Certificate Account as required by Section 4.01, the Trustee shall give the
Master Servicer notice pursuant to clause (i) not later than the Business Day
following the Certificate Account Deposit Date. If an Event of Default described
in clauses (i) - (v) of this Section shall occur, then, and in each and every
such case, so long as such Event of Default shall not have been remedied, the
Company or the Trustee may, and at the direction of the Holders of Certificates
entitled to at least 51% of the Voting Rights, the Trustee shall, by notice to
the Master Servicer (and to the Company if given by the Trustee or to the
Trustee if given by the Company) terminate all of the rights and obligations of
the Master Servicer under this Agreement and in and to the Trust Fund, other
than its rights as a Certificateholder hereunder and the Company, terminate all
of the rights and obligations of the Master Servicer under this Agreement and in
and to the Trust Fund, other than its rights as a Certificateholder hereunder.
If an Event of Default described in clause (vi) hereof shall occur, the Trustee
shall, by notice to the Master Servicer and the Company, terminate all of the
rights and obligations of the Master Servicer under this Agreement and in and to
the Trust Fund, other than its rights as a Certificateholder hereunder. On or
after the receipt by the Master Servicer of such notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a holder thereof) or the Mortgage Loans or other
wise, shall pass to and be vested in the Trustee pursuant to and under this
Section, 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 instru ments, 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 responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee or its appointed agent for
administration by it of all cash amounts which shall at the time be deposited by
the Master Servicer or should have been deposited to the Custodial or the
Certificate Account or thereafter be received with respect to the Mortgage
Loans. The Trustee shall not be deemed to have breached any obligation hereunder
as a result of a failure to make or delay in making any distribution as and when
required hereunder caused by the failure of the Master Servicer to remit any
amounts received on it or to deliver any documents held by it with respect to
the Mortgage Loans. For purposes of this Section 7.01, the Trustee shall not be
deemed to have knowledge of an Event of Default unless a Responsible Officer of
the Trustee assigned to and working in the Trustee's Corporate Trust Division
has actual knowledge thereof or unless notice of any event which is in fact such
an Event of Default is received by the Trustee and such notice references the
Certificates, the Trust Fund or this Agreement.

                                      -70-

<PAGE>

                  [Notwithstanding any termination of the activities of [Name of
Master Servicer] in its capacity as Master Servicer hereunder, [Name of Master
Servicer] shall be entitled to receive, out of any Late Collection of a Monthly
Payment on a Mortgage Loan which was due prior to the notice terminating [Name
of Master Servicer]'s rights and obligations as Master Servicer hereunder and
received after such notice, that portion to which [Name of Master Servicer]
would have been entitled pursuant to Sections 3.11 (ii), (iii), (iv), (v) and
(viii) and Section 4. 01 (b)(iii) as well as the portion of its related
Servicing Fee in respect thereof, and any other amounts payable to [Name of
Master Servicer] hereunder the entitlement to which arose prior to the
termination of its activities hereunder.]

                  SECTION  7.02.      Trustee to Act; Appointment of Successor.

                  On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01, the Trustee or its appointed agent shall
be the successor in all respects to the Master Servicer in its capacity as
Master Servicer under this Agreement and the transactions set forth or provided
for herein and shall be subject thereafter to all the responsibilities, duties
and liabilities relating thereto placed on the Master Servicer including the
obligation to make Advances which have been or will be required to be made
(except for the responsibilities, duties and liabilities contained in Section
2.03 and its obligations to deposit amounts in respect of losses incurred prior
to the date of succession pursuant to Section 3.12 and 4.01(e)) by the terms and
provisions hereof; and provided further, that any failure to perform such duties
or responsibilities caused by the Master Servicer's failure to provide
information required by Section 4.03 shall not be considered a default by the
Trustee hereunder. As compensation therefor, the Trustee shall be entitled to
all funds relating to the Mortgage Loans which the Master Servicer would have
been entitled to charge to the Custodial Account and the Certificate Account if
the Master Servicer had continued to act hereunder. Notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act or if the Holders of Certificates entitled to at least 51% of the
Voting Rights so request in writing to the Trustee, appoint, or petition a court
of competent jurisdiction to appoint, any FNMA- or FHLMC approved mortgage
servicing institution 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.
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 Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Master Servicer hereunder. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession; provided, however, that such
succession shall not reduce the ratings of the Certificates below the original
ratings thereof.

                  Any successor, including the Trustee, to the Master Servicer
shall maintain in force during its term as master servicer hereunder the
Insurance Policies and fidelity bonds to the same extent as the Master Servicer
is so required pursuant to Sections 3.13 and 3.18.

                                      -71-

<PAGE>

                  SECTION  7.03.      Notification to Certificateholders.

                  (a) Upon any such termination or appointment of a successor to
the Master Servicer, the Trustee shall give prompt notice thereof to
Certificateholders.

                  (b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Holders of Certificates
notice of each such Event of Default hereunder known to the Trustee, unless such
Event of Default shall have been cured or waived.

                  SECTION  7.04.      Waiver of Events of Default.

                  The Holders representing at least 66% of the Voting Rights of
Certificates affected by a default or Event of Default hereunder, may waive such
default or Event of Default (other than an Event of Default set forth in Section
7.01(vi); provided, however, that (a) a default or Event of Default under clause
(i) of Section 7.01 may be waived only by all of the Holders of Certificates
affected by such default or Event of Default and (b) no waiver pursuant to this
Section 7.04 shall affect the Holders of Certificates in the manner set forth in
the second paragraph of Section 11.01 or materially adversely affect any
non-consenting Certificateholder. Upon any such waiver of a default or Event of
Default by the Holders representing the requisite percentage of Voting Rights of
Certificates affected by such default or Event of Default, such default or Event
of Default shall cease to exist and shall be deemed to have been remedied for
every purpose hereunder. No such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon except to the
extent expressly so waived.

                                      -72-

<PAGE>

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

                  SECTION  8.01.      Duties of Trustee.

                  The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Default occurs and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs. Any permissive right of the Trustee enumerated in this Agreement
shall not be construed as a duty.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. If any such instrument is found
not to conform to the requirements of this Agreement in a material manner, the
Trustee shall take action as it deems appropriate to have the instrument
corrected.

                  The Trustee shall sign on behalf of the Trust Fund any tax
return that the Trustee is required to sign pursuant to applicable federal,
state or local tax laws.

                  The Trustee covenants and agrees that it shall perform its
obligations hereunder in a manner so as to maintain the status of the Trust Fund
as a REMIC under the REMIC Provisions and to prevent the imposition of any
federal, state or local income, prohibited transaction, contribution or other
tax on the Trust Fund to the extent that maintaining such status and avoiding
such taxes are reasonably within the control of the Trustee and are reasonably
within the scope of its duties under this Agreement.

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

                  (i) Prior to the occurrence of an Event of Default, and after
         the curing of all such Events of Default which may have occurred, the
         duties and obligations of the Trustee shall be determined solely by the
         express provisions of this Agreement, the Trustee shall not be liable
         except for the performance of such duties and obligations as are
         specifically set forth in this Agreement, no implied covenants or
         obligations shall be read into this Agreement against the Trustee and,
         in the absence of bad faith on the part of the Trustee, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions

                                      -73-

<PAGE>

         expressed therein, upon any certificates or opinions furnished to the
         Trustee and conforming to the requirements of this Agreement;

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

                  (iii) The Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of Holders of Certificates
         entitled to at least 25% of the Voting Rights relating to the time,
         method and place of conducting any proceeding for any remedy available
         to the Trustee, or exercising any trust or power conferred upon the
         Trustee, under this Agreement.

                  SECTION  8.02.      Certain Matters Affecting the Trustee.

                  Except as otherwise provided in Section 8.01:

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

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

                  (c) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the 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 (which has not been cured), 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 man would exercise or use under the circumstances in
the conduct of his own affairs;

                  (d) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;

                                      -74-

<PAGE>

                  (e) Prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
unless requested in writing to do so by Holders of Certificates entitled to at
least 25% of the Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to taking any such action. The
reasonable expense of every such reasonable examination shall be paid by the
Master Servicer or, if paid by the Trustee, shall be repaid by the Master
Servicer upon demand; and

                  (f) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys.

                  SECTION  8.03.      Trustee Not Liable for Certificates or
                                      Mortgage Loans.

                  The recitals contained herein and in the Certificates, other
than the signature of the Trustee on the Certificates and the certificate of
authentication, shall be taken as the state ments of the Company or the Master
Servicer, as the case may be, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document, other than the signature of the Trustee on
the Certificates and the Certificate of Authentication. The Trustee shall not be
accountable for the use or application by the Company or the Master Servicer 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 in respect of the Mortgage Loans
or deposited in or withdrawn from the Custodial Account or the Certificate
Account or any other account by or on behalf of the Company or the Master
Servicer, other than any funds held by or on behalf of the Trustee in accordance
with Section 4.01.

                  SECTION  8.04.      Trustee May Own Certificates.

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

                  SECTION  8.05.      Payment of Trustee's Fees.

                  The Trustee shall withdraw from the Certificate Account on
each Distribution Date and pay to itself the Trustee's Fee. Except as otherwise
provided in this Agreement, the Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Trust Fund and held harmless
against any loss, liability or "unanticipated out-of-pocket" expense incurred or
paid to third parties (which expenses shall not include salaries paid to
employees, or allocable overhead,

                                      -75-

<PAGE>

of the Trustee) in connection with the acceptance or administration of its
trusts hereunder or the Certificates, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder all such amounts shall be payable from funds in
the Custodial Account as provided in Section 3.11. The provisions of this
Section 8.05 shall survive the termination of this Agreement.

                  The Master Servicer shall indemnify the Trustee and any
director, officer, employee or agent of the Trustee against any loss, liability
or expense that may be sustained in connection with this Agreement related to
the willful misfeasance, bad faith or negligence in the performance of its
duties hereunder.

                  SECTION  8.06.      Eligibility Requirements for Trustee.

                  The Trustee hereunder shall at all times be a corporation or a
national banking association organized and doing business under the laws of any
state or the United States of America or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority. In addition, the Trustee shall at all times be
acceptable to the Rating Agency rating the Certificates. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07. The corporation or national banking association serving as Trustee
may have normal banking and trust relationships with the Seller and its
affiliates or the Master Servicer and its affiliates; provided, however, that
such corporation cannot be an affiliate of the Master Servicer other than the
Trustee in its role as successor to the Master Servicer.

                  SECTION  8.07.      Resignation and Removal of the Trustee.

                  The Trustee may at any time resign and be discharged from the
trusts hereby created by giving notice thereof to the Company, the Master
Servicer and to all Certificateholders; provided, that such resignation shall
not be effective until a successor trustee is appointed and accepts appointment
in accordance with the following provisions. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee who meets
the eligibility requirements of Section 8.06 by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Company. If no successor
trustee shall have been so appointed and have accepted appointment within 60
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee; provided, however, that the resigning Trustee shall not resign

                                      -76-

<PAGE>

and be discharged from the trusts hereby created until such time as the Rating
Agency rating the Certificates approves the successor trustee.

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Company or the Master Servicer, or if at any
time the Trustee shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, or if the rating of the long-term debt obligations of the Trustee
is not acceptable to the Rating Agency in respect of mortgage pass-through
certificates having a rating equal to the then current rating on the
Certificates, then the Company may remove the Trustee and appoint a successor
trustee who meets the eligibility requirements of Section 8.06 by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders and the Master Servicer by the Company.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders and the Master Servicer
by the Company.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

                  SECTION  8.08.      Successor Trustee.

                  Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Master Servicer and to its
predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the prede cessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder, and the Master Servicer and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.

                   No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06.

                                      -77-

<PAGE>

                  Upon acceptance of appointment by a successor trustee as
provided in this Section, the Master Servicer shall mail notice of the
succession of such trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register. If the Master Servicer fails to
mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Master Servicer.

                  SECTION  8.09.      Merger or Consolidation of Trustee.

                  Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be eligible
under the provisions of Section 8.06, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.

                  SECTION  8.10.      Appointment of Co-Trustee or Separate
                                      Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may at the time be located,
the Company 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 to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8. 10, such powers, duties, obligations, rights and trusts as the Company and
the Trustee may consider necessary or desirable. If the Company shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in case an Event of Default shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.08 hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8. 10 all rights, powers, duties and
obligations conferred or imposed upon the 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 Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed by such separate trustee or co-trustee at the direction of the
Trustee.

                                      -78-

<PAGE>

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII.. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

                                      -79-

<PAGE>

                                   ARTICLE IX

                                   TERMINATION

                  SECTION  9.01.      Termination Upon Repurchase or Liquidation
                                      of All Mortgage Loans.

                  Subject to Section 9.02, the respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created
hereby (other than the obligations of the Master Servicer to provide for and the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate upon payment to the Certificateholders of all amounts held by or on
behalf of the Trustee and required to be paid to them hereunder following the
earlier to occur of (i) the repurchase by the Master Servicer of all Mortgage
Loans and each REO Property in respect thereof remaining in the Trust Fund at a
price equal to (a) 100% of the unpaid principal balance of each Mortgage Loan
(other than one as to which a REO Property was acquired) on the day of
repurchase together with accrued interest on such unpaid principal balance at
the related Net Mortgage Rate to the first day of the month in which the
proceeds of such repurchase are to be distributed, plus (b) the appraised value
of any REO Property less the good faith estimate of the Master Servicer of
liquidation expenses to be incurred in connection with its disposal thereof,
such appraisal to be conducted by an appraiser mutually agreed upon by the
Master Servicer and the Trustee at the expense of the Master Servicer, (but not
more than the unpaid principal balance of the related Mortgage Loan, together
with accrued interest on that balance at the Net Mortgage Rate to the first day
of the month of repurchase), and (ii) 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 REO Property in respect thereof);
provided, however, that in no event shall the trust created hereby continue
beyond expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the date hereof. In the case of any repurchase
by the Master Servicer pursuant to clause (i), the Master Servicer shall include
in such repurchase price the amount of any Advances that will be reimbursed to
the Master Servicer pursuant to Section 3.11 (iii) and the Master Servicer shall
exercise reasonable efforts to cooperate fully with the Trustee in effecting
such repurchase and the transfer of the Mortgage Loans and related Mortgage
Files and related records to the Master Servicer.

                  The right of the Master Servicer to repurchase all Mortgage
Loans pursuant to (i) above shall be conditioned upon the aggregate Stated
Principal Balance of such Mortgage Loans at the time of any such repurchase
aggregating an amount equal to or less than ___% of the aggregate Stated
Principal Balance of the Mortgage Loans at the Cut-off Date. If such right is
exercised, the Master Servicer upon such repurchase shall provide to the
Trustee, the certifica tion required by Section 3.16.

                  Notice of any termination, specifying the Distribution Date
upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final distri bution and cancellation, shall be given
promptly by the Master Servicer by letter to the Trustee and

                                      -80-

<PAGE>

shall be given promptly by the Trustee to the Certificateholders mailed (a) in
the event such notice is given in connection with the Master Servicer's election
to repurchase, not earlier than the 15th day and not later than the 25th day of
the month next preceding the month of such final distribution or (b) otherwise
during the month of such final distribution on or before the Determination Date
in such month, in each case specifying (i) the Distribution Date upon which
final payment of the Certificates will be made upon presentation and surrender
of Certificates at the office of the Certificate Registrar 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 Certificate Registrar therein specified. In the event such notice is given
in connection with the Master Servicer's election to repurchase, the Master
Servicer shall deposit in the Custodial Account pursuant to Section 3. 10 on the
last day of the related Prepayment Period an amount equal to the above-described
repurchase price payable out of its own funds. Upon presentation and surrender
of the Certificates by the Certificateholders, the Trustee shall distribute to
the Certificateholders (i) the amount otherwise distributable on such
Distribution Date, if not in connection with the Master Servicer's election to
repurchase, or (ii) if the Master Servicer elected to so repurchase, an amount
determined as follows: with respect to each Class A and Class B Certificate, the
outstanding Certificate Principal Balance thereof, plus one month's interest
thereon at the applicable Pass-Through Rate and any previously unpaid Accrued
Certificate Interest, subject to the priority set forth in Section 4.01(b); and
with respect to each Class R Certificate, 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 Class A and
Class B Certificateholders. Upon certification to the Trustee by a Servicing
Officer, following such final deposit, the Trustee shall promptly release the
Mortgage Files as directed by the Master Servicer for the remaining Mortgage
Loans, and the Trustee shall execute all assignments, endorsements and other
instruments required by the Master Servicer as being necessary to effectuate
such transfer.

                  In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the time
specified in the above-mentioned notice, the Trustee shall give a second notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all of the Certificates shall not have been
surrendered for cancellation, the Trustee shall take reasonable steps as
directed by the Company, or appoint an agent to take reasonable 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 hereto. If, within nine months after the second
notice, all of the Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto.

                  SECTION  9.02.       Additional Termination Requirements.

                  (a) In the event the Master Servicer repurchases the Mortgage
Loans as provided in Section 9.01, the Trust Fund shall be terminated in
accordance with the following additional

                                      -81-

<PAGE>

requirements, unless the Master Servicer obtains for the Trustee an Opinion of
Counsel to the effect that the failure of the Trust Fund to comply with the
requirements of this Section 9.02 will not (i) result in the imposition of taxes
on the net income derived from "prohibited transactions" of the Trust Fund as
defined in Section 86OF of the Code or (ii) cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding:

                  (i) The Trustee shall establish a 90-day liquidation period
         and specify the first day of such period in a statement attached to the
         Trust Fund's final Tax Return pursuant to Treasury Regulation
         (S)1.86OF-1. The Trustee shall satisfy all the requirements of a
         qualified liquidation under 86OF of the Code and any regulations
         thereunder, as evidenced by an Opinion of Counsel obtained at the
         expense of the Master Servicer;

                  (ii) During such 90-day liquidation period, and at or prior to
         the time of making of the final payment on the Certificates, the Master
         Servicer shall sell all of the assets of the Trust Fund for cash; and

                  (iii) At the time of the making of the final payment on the
         Certificates, the Trustee shall distribute or credit, or cause to be
         distributed or credited, to the Holders of the Class R Certificates all
         remaining cash on hand (other than cash retained to meet claims), and
         the Trust Fund shall terminate at that time.

                  (b) By their acceptance of the Class R Certificates, the
Holders thereof hereby agree to authorize the Trustee to specify the 90-day
liquidation period for the Trust Fund, which authorization shall be binding upon
all successor Class R Certificateholders.

                                      -82-

<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION  10.01.     REMIC Administration.

                  (a) The Trustee shall make an election to treat the Trust Fund
as a REMIC under the Code and, if necessary, under applicable state law. Such
election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
the purposes of the REMIC election in respect of the Trust Fund, the Class A and
Class B Certificates shall be designated as the "regular interests" and the
Class R Certificates shall be designated as the sole class of "residual
interest" in the Trust Fund. The Trustee shall not permit the creation of any
"interests" in the Trust Fund (within the meaning of Section 86OG of the Code)
other than the Regular Certificates and the Residual Certificates.

                  (b) The Closing Date is hereby designated as the "startup day"
of the Trust Fund within the meaning of Section 86OG(a)(9) of the Code.

                  (c) The Trustee shall hold a Class R Certificate representing
a 0.01 % Percentage interest of all Class R Certificates and shall be designated
as the tax matters person of the Trust Fund in the manner provided under
Treasury regulations section 1.86OF-4(d) and temporary Treasury regulations
section 301.6231(a)(7)-1T. The Trustee, as tax matters person, shall (i) act on
behalf of the Trust Fund in relation to any tax matter or controversy involving
the Trust Fund and (ii) represent the Trust Fund in any administrative or
judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto. To the extent authorized under the Code
and the regulations promulgated thereunder, each Holder of a Class R
Certificate, hereby irrevocably appoints and authorizes the Trustee to be its
attorney-in-fact for purposes of signing any Tax Returns required to be filed on
behalf of the Trust Fund. The legal expenses and costs of any such action
described in this subsection and any liability resulting therefrom shall
constitute expenses of the Trust Fund and the Trustee shall be entitled to
reimbursement therefor unless such legal expenses and costs are incurred by
reason of the Trustee's willful misfeasance, bad faith or negligence.

                  (d) Except as provided in Section 4.05, the Trustee shall
prepare or cause to be prepared, sign and file all of the Tax Returns in respect
of the Trust Fund created hereunder. The expenses of preparing and filing such
returns shall be borne by the Trustee without any right of reimbursement
therefor.

                  (e) The Trustee shall perform on behalf of the Trust Fund all
reporting and other tax compliance duties that are the responsibility of the
Trust Fund under the Code, REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority. Among
its other duties, as required by the Code, the REMIC Provisions or other such
compliance guidance, the Trustee shall provide (i) to any Transferor of a Class
R Certificate

                                      -83-

<PAGE>

such information as is necessary for the application of any tax relating to the
transfer of a Class R Certificate to any Person who is not a Permitted
Transferee, (ii) Certificateholders such information or reports as are required
by the Code or the REMIC Provisions including reports relating to interest,
original issue discount and market discount or premium (using the Prepayment
Assumption) and (iii) to the Internal Revenue Service the name, title, address
and telephone number of the person who will serve as the representative of the
Trust Fund. In addition, the Company shall provide or cause to be provided to
the Trustee, within ten (10) days after the Closing Date, all information or
data that the Trustee reasonably determines to be relevant for tax purposes as
to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.

                  (f) The Trustee shall take such action and shall cause the
Trust Fund created hereunder to take such action as shall be necessary to create
or maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of the Trust Fund as a REMIC or (ii) 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 86OF(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 86OG(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee received an Opinion of
Counsel (at the expense of the party seeking to take such action but in no event
shall such Opinion of Counsel be an expense of the Trustee) to the effect that
the contemplated action will not, with respect to the Trust Fund created
hereunder, endanger such status or result in the imposition of such a tax. The
Master Servicer shall not take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action. In addition, prior to taking any action
with respect to the Trust Fund or its assets, or causing the Trust Fund to take
any action, which is not expressly permitted under the terms of this Agreement,
the Master Servicer will consult with the Trustee or its designee, in writing,
with respect to whether such action could cause an Adverse REMIC Event to occur
with respect to the Trust Fund, and the Master Servicer shall not take any such
action or cause the Trust Fund to take any such action as to which the Trustee
has advised it in writing that an Adverse REMIC Event could occur. The Trustee
may consult with counsel to make such written advice, and the cost of same shall
be borne by the party seeking to take the action not permitted by this Agreement
(but in no event shall such cost be an expense of the Trustee). At all times as
may be required by the Code, the Trustee will ensure that substantially all of
the assets of the Trust Fund will consist of "qualified mortgages" as defined in
Section 86OG(a)(3) of the Code and "permitted investments" as defined in Section
86OG(a)(5) of the Code.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of the Trust Fund created hereunder as defined in Section
86OF(a)(2) of the Code, on "net income from foreclosure property" of the Trust
Fund as defined in Section 86OG(c) of the Code, on any contributions to the
Trust Fund after the Startup Day therefor pursuant to Section 86OG(d) of the

                                      -84-

<PAGE>

Code, or any other tax is imposed by the Code or any applicable provisions of
state or local tax laws, such tax shall be charged (i) to the Trustee pursuant
to Section 10.03 hereof, if such tax arises out of or results from the willful
misfeasance, bad faith or negligence in performance by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise (iii) against amounts on deposit in the Custodial Account and shall
be paid by withdrawal therefrom.

                  (h) On or before April 15 of each calendar year, commencing
April 15, 20_, the Trustee shall deliver to the Master Servicer and each Rating
Agency a Certificate from a Responsible Officer of the Trustee stating the
Trustee's compliance with this Article X.

                  (i) The Master Servicer and the Trustee shall, for federal
income tax purposes, maintain books and records with respect to the Trust Fund
on a calendar year and on an accrual basis.

                  (j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to the Trust Fund other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04
unless it shall have received an Opinion of Counsel (which such Opinion of
Counsel shall not be an expense of the Trustee) to the effect that the inclusion
of such assets in the Trust Fund will not cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding or subject
the Trust Fund to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.

                  (k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which the Trust Fund will receive a fee or other
compensation for services nor permit either such REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 86OG(a)(3) of
the Code or "permitted investments" as defined in Section 86OG(a)(5) of the
Code.

                  (l) Solely for purposes of satisfying Section
1.86OG-1(a)(4)(iii) of the Treasury regulations, and based on certain
assumptions described below, the "latest possible maturity date" by which the
Certificate Principal Balances of the Certificates representing a regular
interest in the Trust Fund would be reduced to zero is __________ 25, 20__,
which is the Distribution Date immediately following the latest scheduled
maturity of any Mortgage Loan as determined assuming that (i) scheduled interest
and principal payments on the Mortgage Loans are received in a timely manner,
with no delinquencies or losses, (ii) there are no principal prepayments, and
(iii) neither the Seller nor the Master Servicer will repurchase any Mortgage
Loans.

                  SECTION  10.02.     Prohibited Transactions and Activities.

                  Neither the Company, the Master Servicer nor the Trustee shall
sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of the Trust Fund

                                      -85-

<PAGE>

pursuant to Article IX of this Agreement or (iv) a purchase of Mortgage Loans
pursuant to Article II or III of this Agreement) nor acquire any assets for the
Trust Fund, nor sell or dispose of any investments in the Custodial Account or
the Certificate Account for gain, nor accept any contributions to the Trust Fund
after the Closing Date unless it has received an Opinion of Counsel (at the
expense of the party seeking to cause such sale, disposition, substitution or
acquisition but in no event shall such Opinion of Counsel be an expense of the
Trustee) that such sale, disposition, substitution or acquisition will not (a)
affect adversely the status of the Trust Fund as a REMIC or (b) cause the Trust
Fund to be subject to a tax on "prohibited transactions" or "contributions"
pursuant to the REMIC Provisions.

                  SECTION  10.03.   Master Servicer and Trustee Indemnification.

                  (a) The Trustee agrees to indemnify the Trust Fund, the
Company and the Master Servicer 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 the willful
misfeasance, bad faith or negligence by the Trustee with respect to the
Trustee's covenants set forth in this Article X.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the Company and the Trustee for any taxes and costs (including, without
limitation, any reasonable attorneys' fees) imposed on or incurred by the Trust
Fund, the Company or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in this Article X or in Article III with respect
to compliance with the REMIC Provisions, including without limitation, any
penalties arising from the Trustee's execution of Tax Returns prepared by the
Master Servicer that contain errors or omissions.

                                      -86-

<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION  11.01.     Amendment.

                  This Agreement may be amended from time to time by the
Company, the Master Servicer and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein or to correct any error, (iii) to change the timing and/or
nature of deposits in the Certificate Account, provided that (a) such change
would not adversely affect in any material respect the interests of any
Certificateholder, as evidenced by an Opinion of Counsel, and (b) such change
would not adversely affect the then- current rating of any rated class of
Certificates, as evidenced by a letter from each applicable Rating Agency, (iv)
to modify, eliminate or add to any of the provisions of the Trust Fund (a) to
such extent as shall be necessary to maintain the qualification of the Trust
Fund as a REMIC or to avoid or minimize the risk of imposition of any tax on the
Trust Fund, provided that the Trustee has received an Opinion of Counsel to the
effect that (1) such action is necessary or desirable to maintain such
qualification or to avoid or minimize such risk, and (2) such action will not
adversely affect in any material respect the interests of any Certificateholder,
or (b) to restrict the transfer of the Class R Certificates, provided that the
Company has determined that the then- current ratings of the Class A
Certificates will not be adversely affected, as evidenced by a letter from each
Rating Agency, and that any such amendment will not give rise to any tax with
respect to the transfer of the Class R Certificates to a non-Permitted
Transferee, (v) to make any other provisions with respect to matters or
questions arising this Agreement which are not materially inconsistent with the
provisions thereof, provided that such action will not adversely affect in any
material respect the interests of any Certificateholder, or (vi) to amend
specified provisions that are not material to holders of any class of
Certificates offered hereunder.

                  This Agreement may also be amended from time to time by the
Company, the Master Servicer and the Trustee with the consent of the Holders of
Certificates entitled to at least 66-2/3% of the Voting Rights allocated to each
Class affected thereby for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, or (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. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Seller or the Master Servicer or any affiliate thereof shall be entitled to
Voting Rights with respect to matters described in clauses (i) and (ii) of this
paragraph.

                                      -87-

<PAGE>

                  Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (provided by the Person requesting
such amendment) to the effect that such amendment will not result in the
imposition of any tax on the Trust Fund pursuant to the REMIC Provisions or
cause the Trust Fund to fail to qualify as a REMIC at any time that any of the
Certificates are outstanding. Promptly after the execution of any such amendment
the Trustee shall furnish a statement describing the amendment to each
Certificateholder.

                  It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.

                  Prior to executing any amendment pursuant to this Section, the
Trustee shall be entitled to receive an Opinion of Counsel (provided by the
Person requesting such amendment) to the effect that such amendment is
authorized or permitted by this Agreement. The cost of an Opinion of Counsel
delivered pursuant to this Section 11.01 shall be an expense of the party
requesting such amendment, but in any case shall not be an expense of the
Trustee.

                  The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.

                  SECTION  11.02.     Recordation of Agreement; Counterparts.

                  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 properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer and at the expense of the Company on direction
by the Trustee, but only upon direction accompanied by an Opinion of Counsel to
the effect that such recordation materially and beneficially affects the
interests of the Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  SECTION  11.03.   Limitation on Rights of Certificateholders.

                  The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of

                                      -88-

<PAGE>

the Trust Fund, nor otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.

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

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a notice of an Event of
Default, or of a default by the Seller or the Trustee in the performance of any
obligation hereunder, and of the continuance thereof, as hereinbefore provided,
and unless also the Holders of Certificates entitled to at least 25% of the
Voting Rights shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding. It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue of any provision of this Agreement to affect, disturb or prejudice the
rights of the Holders of any other of such Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, 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, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.

                  SECTION  11.04.     Governing Law.

                  This Agreement and the Certificates shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.

                  SECTION  11.05.     Notices.

                  All demands, notices and direction hereunder shall be in
writing and shall be deemed effective upon receipt when delivered to (a) in the
case of the Company, ________________________,
____________________________________, Attention: ____________________, or such
other address as may hereafter be furnished to the Trustee and the Master
Servicer in writing by the Company, (b) in the case of the Trustee
_____________________,

                                      -89-

<PAGE>

Attention: _______________________________, or such other address as may
hereafter be furnished to the Master Servicer and the Company in writing by the
Trustee and (c) in the case of the Master Servicer, [Name of Master Servicer]
________________________, ____________________________________, Attention:
__________________________ or such other address as may hereafter be furnished
to the Company and the Trustee in writing. Any notice required or permitted to
be mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder 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, whether or not the
Certificateholder receives such notice.

                  SECTION  11.06.     Severability of Provisions.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

                  SECTION  11.07.     Successors and Assigns; Third Party
                                      Beneficiary.

                  The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the Trustee and
the Certificateholders. The parties hereto agree that the Seller is the intended
third party beneficiary of Sections 3.07, 3.10 and 3.22 hereof, and that the
Seller may enforce such provisions to the same extent as if the Seller were a
party to this Agreement.

                  SECTION  11.08.     Article and Section Headings.

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

                  SECTION  11.09.     Notice to Rating Agencies and
                                      Certificateholder.

                  The Trustee shall use its best efforts to promptly provide
notice to the Rating Agency referred to below with respect to each of the
following of which it has actual knowledge:

                  1.       Any material change or amendment to this Agreement;

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

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

                  4.       The repurchase or substitution of Mortgage Loans
                           pursuant to Section 2.04;

                                      -90-

<PAGE>

                  5.       The final payment to Certificateholders; and

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

                  In addition, the Trustee shall promptly furnish to the Rating
Agency copies of the following:

                  1.       Each report to Certificateholders described in
Section 4.02;

                  2.       Each annual independent public accountants' servicing
report received as described in Section 3.20; and

                  3.       Each Master Servicer compliance report received as
described in Section 3.19.

                  Any such notice pursuant to this Section 11.09 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
(i) in the case of [_________________________] Attention: ______________ the
case of [____________________________________________________] or, in each case,
such other address as such Rating Agency may designate in writing to the parties
thereto.

                                      -91-

<PAGE>

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

                                         AB MORTGAGE SECURITIES CORP.,
                                         Company

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

                                         [NAME OF MASTER SERVICER],
                                         Master Servicer

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

                                          [NAME OF TRUSTEE],
                                           Trustee

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

                                      -92-

<PAGE>

                                   EXHIBIT A-1

                         FORM OF CLASS [A-_] CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                                      A-1-1

<PAGE>

Certificate No.__              _____% Pass-Through Rate
Class A-____
Date of Pooling and Servicing  Percentage Interest:____%
Agreement and Cut-off Date:
_____________ 1, 20__
First Distribution Date:       Aggregate Initial [Certificate Principal Balance]
_____________, 20__            [Notional Amount] of the Class A-__ Certificates:
                               $--------------
Master Servicer:               Initial [Certificate Principal
[Name of Master Servicer]      Balance] [Notional Amount] of this Certificate:
                               $--------------
Assumed Final                  CUSIP:__________
Distribution Date:
__________ 25, 20__

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 200_-_

         evidencing a percentage interest in the distributions allocable to the
         Class A- ___ Certificates with respect to a Trust Fund consisting
         primarily of a pool of conforming one- to four-family fixed-rate first
         lien mortgage loans formed and sold by AB MORTGAGE SECURITIES CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in AB Mortgage Securities
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

         This certifies that [Cede & Co.] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial [Certificate Principal Balance] [Notional Amount] of this Certificate by
the aggregate Initial [Certificate Principal Balance] [Notional Amount] of all
Class A-____ Certificates, both as specified above) in certain distributions
with respect to the Trust Fund consisting primarily of an interest in a pool of
conventional one- to four-family fixed-rate first lien mortgage loans (the
"Mortgage Loans"), formed and sold by AB Mortgage Securities Corp. (hereinafter
called the "Company," which term includes any successor entity under the
Agreement

                                      A-1-2

<PAGE>

referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement") among the
Company, the Master Servicer and [Name of Trustee], as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of [interest
and] [principal], if any, required to be distributed to Holders of Class
A-____Certificates on such Distribution Date.

         Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
forth above. The [Certificate Principal Balance] [Notional Amount] hereof will
be reduced to the extent of [distributions allocable to principal and] any
Realized Losses allocable hereto.

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.

                                      A-1-3

<PAGE>

         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

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

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

                                      A-1-4

<PAGE>

         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Class R
Certificateholder from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans, thereby effecting early
retirement of the Certificates. The Agreement permits, but does not require, the
Class R Certificateholder to (i) purchase at a price determined as provided in
the Agreement all remaining Mortgage Loans and all property acquired in respect
of any Mortgage Loan or (ii) purchase in whole, but not in part, all of the
Certificates from the Holders thereof; provided, that any such option may only
be exercised if the Aggregate [Stated Principal Balance] [Notional Amount] of
the Mortgage Loans as of the Distribution Date upon which the proceeds of any
such purchase are distributed is less than one percent of the Aggregate [Stated
Principal Balance] [Notional Amount] of the Mortgage Loans at the Cut-off Date.

       Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

        Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-1-5

<PAGE>

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

Dated:  __________ __, 200_              [NAME OF TRUSTEE],
                                                 as Trustee

                                         By:
                                            ----------------------------------
                                                   Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

        This is one of the Class A-____ Certificates referred to in the
within-mentioned Agreement.

                                         [NAME OF TRUSTEE],
                                         as Trustee

                                         By:
                                            ----------------------------------
                                                  Authorized Signatory

                                      A-1-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

               FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

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

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

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

                                      A-1-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

               The assignee should include the following for purposes of
distribution:

               Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.

               This information is provided by __________________, the assignee
named above, or ________________, as its agent.

                                      A-1-8

<PAGE>

                                   EXHIBIT A-2
                         FORM OF CLASS B-_ CERTIFICATES

        THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AND THE [CLASS M CERTIFICATES] [THE CLASS B-1 CERTIFICATES] [AND
THE CLASS B-2 CERTIFICATES], AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

        SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986 (THE "CODE").

       THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

       NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(D) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE
OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.

                                          A-2-1

<PAGE>

Certificate No. 1                    _______% Pass-Through Rate
Class [B-_]                          Aggregate Initial [Certificate Principal
                                     Balance] [Notional Amount] of the
                                     Class [B-_] Certificates:
                                     $-----------------
Date of Pooling and Servicing        Initial [Certificate Principal Balance]
Agreement and Cut-off Date:          [Notional Amount]
_____________ 1, 200_                of this Certificate ("Denomination"):
                                     $--------------
First Distribution Date:
_____________, 200_
Master Servicer:                     CUSIP:
[Name of Master Servicer]
Assumed Final Distribution Date:     Percentage Interest of this Certificate:
_____________, 20__                  100.00%

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 200_-_

        evidencing percentage interest in the distributions allocable to the
        Class [B-_] Certificates with respect to a Trust Fund consisting
        primarily of a pool of conforming one- to four- family fixed-rate first
        lien mortgage loans formed and sold by AB MORTGAGE SECURITIES CORP.

        This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in AB Mortgage Securities
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other or obligation
secured by or payable from payments on the Certificates.

        This certifies that ___________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial [Certificate Principal Balance] [Notional Amount] of this Certificate by
the aggregate Initial [Certificate Principal Balance] [Notional Amount] of all
Class [B-_] Certificates, both as specified above), in certain distributions
with respect to a Trust Fund consisting primarily of a pool of one- to
four-family fixed-rate first lien mortgage loans (the "Mortgage Loans"), formed
and sold by AB Mortgage Securities Corp. (hereinafter called the "Company,"
which term includes any successor entity under the Agreement referred to below).
The

                                      A-2-2

<PAGE>

Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Company, the Master Servicer and
[Name of Trustee], as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

        Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to Holders of Class [B-_]
Certificates on such Distribution Date.

        Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

        Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
forth above. The [Certificate Principal Balance] [Notional Amount] hereof will
be reduced to the extent of [the distributions allocable to principal and] any
Realized Losses allocable hereto.

       No transfer of this Class [B-_] Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Trustee shall require an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee that such transfer is exempt
(describing the applicable exemption and the basis therefor) from or is being
made pursuant to the registration requirements of the Securities Act of 1933, as
amended, and of any applicable statute of any state and (ii) the transferee and
transferor shall execute a representation letter in the form described by the
Agreement. The Holder hereof desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Company, the Master Servicer and the
Certificate Registrar acting on behalf of the Trustee against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such Federal and state laws. In connection with any such transfer, the Trustee
will

                                          A-2-3

<PAGE>

also require either (i) an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee with respect to the permissibility of such
transfer under the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and Section 4975 of the Internal Revenue Code (the "Code") and
stating, among other things, that the transferee's acquisition of a Class [B-_]
Certificate will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code or (ii) a representation
letter, in the form as described by the Agreement, either stating that the
transferee is not an employee benefit or other plan subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code (a "Plan"), or any
other person (including an investment manager, a named fiduciary or a trustee of
any Plan) acting, directly or indirectly, on behalf of or purchasing any
Certificate with "plan assets" of any Plan, or stating that the transferee is an
insurance company, the source of funds to be used by it to purchase the
Certificate is an "insurance company general account" (within the meaning of
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60), and
the purchase is being made in reliance upon the availability of the exemptive
relief afforded under Sections I and III of PTCE 95-60.

        This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

        The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.

        As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

        The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.

                                      A-2-4

<PAGE>

        As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

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

        No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

        The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

        This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

        The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Class R
Certificateholder from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans, thereby effecting early
retirement of the Certificates. The Agreement permits, but does not require, the
Class R Certificateholder to (i) purchase at a price determined as provided in
the Agreement all remaining Mortgage Loans and all property acquired in respect
of any Mortgage Loan or (ii) purchase in whole, but not in part, all of the
Certificates from the Holders thereof; provided, that any such option may only
be exercised if the Aggregate [Stated Principal Balance] [Notional Amount] of
the Mortgage Loans as of the Distribution Date upon which the proceeds of any
such purchase are distributed is less than one percent of the Aggregate [Stated
Principal Balance] [Notional Amount] of the Mortgage Loans at the Cut-off Date.

                                      A-2-5

<PAGE>

        Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-2-6

<PAGE>

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

Dated:  ___________ __, 200_                   [NAME OF TRUSTEE],
                                               as Trustee

                                               By:
                                                  -----------------------------
                                                  Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

        This is one of the Class [B-_] Certificates referred to in the
within-mentioned Agreement.

                                               [NAME OF TRUSTEE],
                                               as Trustee

                                               By:
                                                  -----------------------------
                                                  Authorized Signatory

                                      A-2-7

<PAGE>

                                   ASSIGNMENT

        FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

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

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

                                      A-2-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

        The assignee should include the following for purposes of distribution:

        Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to -------------------------------------------------
--------------------------------------------------------------------------------
for the account of ---------------------------------------------, account
number -----------------------, or, if mailed by check, to --------------------.
Applicable statements should be mailed to --------------------------------------
-------------------------------------------------------------------------------.

This information is provided by -----------------------------------------------,
the assignee named above, or --------------------------------------------------
as its agent.

                                      A-2-9

<PAGE>

                                    EXHIBIT B
                           FORM OF CLASS R CERTIFICATE

        THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

        SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
A "RESIDUAL INTEREST" IN ONE OR MORE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").

        NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(E) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE
COMPANY AND THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT (THE
"AGREEMENT").

        ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING TO THE FINANCIAL

                                       B-1

<PAGE>

CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE, EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.

                                       B-2

<PAGE>

Certificate No. 1                      _______% Pass-Through Rate

Class R Senior

Date of Pooling and, Servicing         Percentage Interest:  100.00%
Agreement and Cut-off Date:
______________ 1, 200_

First Distribution Date:               Aggregate Initial [Certificate Principal
______________, 200_                   Balance] [Notional Amount] of the
                                       Class R Certificates:
                                       $-----------------

Master Servicer:                       Initial [Certificate Principal Balance]
[Name of Master Servicer]              [Notional Amount] of this
                                       Class R Certificates:
                                       $-----------------

Assumed Final Distribution Date:       CUSIP:
______________, 20__

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 20_-_

        evidencing a percentage interest in any distributions allocable to the
        Class R Certificates with respect to a Trust Fund consisting primarily
        of a pool of one- to four-family fixed-rate first lien mortgage loans
        formed and sold by AB MORTGAGE SECURITIES CORP.

        This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in AB Mortgage Securities
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the

                                       B-3

<PAGE>

Master Servicer or any of their affiliates will have any obligation with respect
to any certificate or other obligation secured by or payable from payments on
the Certificates.

        This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate stated above in certain
distributions with respect to a Trust Fund, consisting primarily of a pool of
one- to four-family fixed-rate first lien mortgage loans (the "Mortgage Loans"),
formed and sold by AB Mortgage Securities Corp. (hereinafter called the
"Company," which term includes any successor entity under the Agreement referred
to below). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as specified above (the "Agreement") among the Company, the
Master Servicer and [Name of Trustee], as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

        Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any , required to be distributed to Holders of Class R
Certificates on such Distribution Date.

       Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Company will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Company, or any affiliate of the Company, on such terms and conditions as
the Company may choose.

       Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
forth above. The [Certificate Principal Balance] [Notional Amount] hereof will
be reduced to the

                                       B-4

<PAGE>

extent of [distributions allocable to principal] and any Realized Losses
allocable hereto. Notwithstanding the reduction of the [Certificate Principal
Balance] [Notional Amount] hereof to zero, this Certificate will remain
outstanding under the Agreement and the Holder hereof may have additional
obligations with respect to this Certificate, including tax liabilities, and may
be entitled to certain additional distributions hereon, in accordance with the
terms and provisions of the Agreement.

       In connection with any transfer of this Certificate, the Trustee will
also require either (i) an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee with respect to the permissibility of such
transfer under the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and Section 4975 of the Internal Revenue Code (the "Code") and
stating, among other things, that the transferee's acquisition of a Class R
Certificate will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code or (ii) a representation
letter, in the form as described by the Agreement, stating that the transferee
is not an employee benefit or other plan subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code (a "Plan"), or any other person
(including an investment manager, a named fiduciary or a trustee of any Plan)
acting, directly or indirectly, on behalf of or purchasing any Certificate with
"plan assets" of any Plan.

        This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

       The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.

        As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

       The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of

                                       B-5

<PAGE>

such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.

        As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an, assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

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

        No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

        The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

        This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

        The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Class R
Certificateholder from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans, thereby effecting early
retirement of the Certificates. The Agreement permits, but does not require, the
Class R Certificateholder to (i) purchase at a price determined as provided in
the Agreement all remaining Mortgage Loans and all property acquired in respect
of any Mortgage Loan or (ii) purchase in whole, but not in part, all of the
Certificates from the Holders thereof; provided, that any such option may only
be exercised if

                                           B-6

<PAGE>

the Aggregate [Stated Principal Balance] [Notional Amount] of the Mortgage Loans
as of the Distribution Date upon which the proceeds of any such purchase are
distributed is less than one percent of the Aggregate [Stated Principal Balance]
[Notional Amount] of the Mortgage Loans at the Cut-off Date.

       Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purpose
have the same effect as if set forth at this place.

        Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                       B-7

<PAGE>

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

Dated:  _________ __, 200_              [NAME OF TRUSTEE],
                                        as Trustee

                                        By:
                                           ------------------------------------
                                        Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

        This is one of the Class R Certificates referred to in the
within-mentioned Agreement.

                                        [NAME OF TRUSTEE],
                                        as Trustee

                                        By:
                                           ------------------------------------
                                        Authorized Signatory

                                       B-8

<PAGE>

                                   ASSIGNMENT

        FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
     (Please print or typewrite name and address including postal zip code
                                  of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust. -------------------------------------
-------------------------------------------------------------------------------

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

Dated: _________________

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

                                       B-9

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

        The assignee should include the following for purposes of distribution:

        Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to -------------------------------------------------
--------------------------------------------------------------------------------
for the account of ---------------------------------------------, account
number -----------------------, or, if mailed by check, to --------------------.
Applicable statements should be mailed to --------------------------------------
-------------------------------------------------------------------------------.

This information is provided by -----------------------------------------------,
the assignee named above, or --------------------------------------------------
as its agent.

                                      B-10

<PAGE>

                                    EXHIBIT C

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                 __________ __, 200_

[Name of Master Servicer]
-------------------------
-------------------------
-------------------------

        Re:    Pooling and Servicing Agreement, dated as of __________ 1, 200_
               among AB Mortgage Securities Corp., [Name of Master Servicer],
               and [Name of Trustee], Mortgage Pass-Through Certificates Series
               200_-_
               ----------------------------------------------------------------

Ladies and Gentlemen:

        In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto) it has reviewed the
Mortgage File and the Mortgage Loan Schedule and has determined that: (i) all
documents required to be included in the Mortgage File are in its possession;
(ii) such documents have reviewed by it and appear regular on their face and
relate to such Mortgage Loan; and (iii) base on examination by it, and only as
to such documents, the information set forth in items (i), (ii), (iii) (iv) of
the definition or description of "Mortgage Loan Schedule" is correct.

        The trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan, or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.

                                       C-1

<PAGE>

        Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                     [NAME OF TRUSTEE]

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

                                       C-2

<PAGE>

                                    EXHIBIT D

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                                     __________ __, 200_

[Name of Master Servicer]
-------------------------
-------------------------
-------------------------

        Re:    Pooling and Servicing Agreement, dated as of __________ 1, 200_
               among AB Mortgage Securities Corp., [Name of Master Servicer],
               and [Name of Trustee], Mortgage Pass-Through Certificates Series
               200_-_
               ----------------------------------------------------------------

Ladies and Gentlemen:

               In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto) it has received
the documents set forth in Section 2.01.

               The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.

               Capitalized words and phrases used herein shall have the
respective meanings assigned to them in, the above-captioned Pooling and
Servicing Agreement.

                                     [NAME OF TRUSTEE]

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

                                       D-1

<PAGE>

                                    EXHIBIT E

                            FORM OF REMITTANCE REPORT

                             (Provided Upon Request)

                                       E-1

<PAGE>

                                   EXHIBIT F-1

                               REQUEST FOR RELEASE
                                  (for Trustee)

LOAN INFORMATION

               Name of Mortgagor:
                                                     --------------------------

               Master Servicer
               Loan No.:
                                                     --------------------------

TRUSTEE

               Name:
                                                     --------------------------

               Address:
                                                     --------------------------

               Trustee
               Mortgage File No.:
                                                     --------------------------

REQUEST FOR REQUESTING DOCUMENTS (check one):
--------------------------------

1.             Mortgage Loan Liquidated.
                       (The Master Servicer hereby certifies that all proceeds
                       of foreclosure, insurance or other liquidation have been
                       finally received and deposited into the Custodial Account
                       to the extent required pursuant to the Pooling and
                       Servicing Agreement.)

2.             Mortgage Loan in Foreclosure.

3.             Mortgage Loan Repurchased Pursuant to Section 9.01 of the Pooling
               and Servicing Agreement.

4.             Mortgage Loan Repurchased Pursuant to Article II of the Pooling
               and Servicing Agreement.
                       (The Master Servicer hereby certifies that the repurchase
                       price has been deposited into the Custodial Account
                       pursuant to the Pooling and Servicing Agreement.)

                                      F-1-1

<PAGE>

5.             Other (explain).

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

               The undersigned Master Servicer hereby acknowledges that it has
received from the Trustee for the Holders of Mortgage Pass-Through Certificates,
Series 200_-_, the documents referred to below (the "Documents"). All
capitalized terms not otherwise defined in this Request for Release shall have
the meanings given them in the Pooling and Servicing Agreement, dated as of
__________ 1, 200_ (the "Pooling and Servicing Agreement"), among AB Mortgage
Securities Corp., [Name of Master Servicer] and the Trustee.
<TABLE>
<CAPTION>

<S>            <C>
( )            Promissory Note dated _________________, 200_, in the original principal sum of
               $__________, made by __________________, payable to, or endorsed to the order
               of, the Trustee.

( )            Mortgage recorded on _________________________ as instrument no.
               ___________ in the County Recorders Office of the County of
               ______________________, State of _____________________ in book/reel/docket
               of official records at page/image _______________.

( )            Deed of Trust recorded on ____________________ as instrument
               no._____________ in the County Recorder's Office of the County of
               ______________________, State of _____________________in book/reel/docket
               __________________ of official records at page/image ________________.

( )            Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
               _______________ as instrument no. ______________ in the County Recorder's
               Office of the County of ________________, State of ___________________ in
               book/reel/docket ____________ of official records at page/image ___________.

( )            Other documents, including any amendments, assignments or other assumptions of
               the Mortgage Note or Mortgage.
</TABLE>

               ( )   --------------------------

               ( )   --------------------------

               ( )   --------------------------

                                      F-1-2

<PAGE>

               ( )   --------------------------

               The undersigned Master Servicer hereby acknowledges and agrees as
follows:

                       (1) The Master Servicer shall hold and retain possession
               of the Documents in trust for the benefit of the Trustee, solely
               for the purposes provided in the Agreement.

                       (2) The Master Servicer shall not cause or knowingly
               permit the Documents to become subject to, or encumbered by, any
               claim, liens, security interest, charges, writs of attachment or
               other impositions nor shall the Master Servicer assert or seek to
               assert any claims or rights of setoff to or against the Documents
               or any proceeds thereof.

                       (3) The Master Servicer shall return each and every
               Document previously requested from the Mortgage File to the
               Custodian when the need therefor no longer exists, unless the
               Mortgage Loan relating to the Documents has been liquidated and
               the proceeds thereof have been remitted to the Custodial Account
               and except as expressly provided in the Agreement.

                       (4) The Documents and any proceeds thereof, including any
               proceeds of proceeds, coming into the possession or control of
               the Master Servicer shall at all times be earmarked for the
               account of the Trustee, and the Master Servicer shall keep the
               Documents and any proceeds separate and distinct from all other
               property in the Master Servicer's possession, custody or control.

                                             [NAME OF MASTER SERVICER]

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

                                             Title:
                                                   ----------------------------

Date: _________________, 200_

                                      F-1-3

<PAGE>

                                   EXHIBIT F-2

                               REQUEST FOR RELEASE
                          [Mortgage Loans Paid in Full]

                     OFFICER'S CERTIFICATE AND TRUST RECEIPT
                       MORTGAGE PASS-THROUGH CERTIFICATES
                                  SERIES 200_-_

_____________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN OFFICER
OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER SIGNATURE,
AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN
MADE.

LOAN NUMBER:                                      BORROWER'S NAME:
            ---------------------------------

COUNTY:
       --------------------------------------

WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE CUSTODIAL ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

------------- --------                            DATED:
                                                        ----------------------

//      VICE PRESIDENT

//      ASSISTANT VICE PRESIDENT

                                      F-2-1

<PAGE>

                                   EXHIBIT G-1

                     FORM OF INVESTOR REPRESENTATION LETTER

                                ___________,200__

AB Mortgage Securities Corp.
91 Westborough Boulevard
Suite 200
South San Francisco, California 94080

[Name of Trustee]
----------------------
----------------------
----------------------

Attention: AB Mortgage Securities Corp., Series 200_-_

           Re:     AB Mortgage Securities Corp.,
                   Mortgage Pass-Through Certificates, Series 200_-_, Class __
                   -----------------------------------------------------------

Ladies and Gentlemen:

        ______________ (the "Purchaser") intends to purchase from ______________
(the "Seller") $_________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 200_-_, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of _________ 1, 200_ among AB Mortgage
Securities Corp., as company (the "Company"), [Name of Master Servicer], as
master servicer and [Name of Trustee], as trustee (the "Trustee"). All terms
used herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Purchaser hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:

                       1. The Purchaser understands that (a) the Certificates
               have not been and will not be registered or qualified under the
               Securities Act of 1933, as amended (the "Act") or any state
               securities law, (b) the Company is not required to so register or
               qualify the Certificates, (c) the Certificates may be resold only
               if registered and qualified pursuant to the provisions of the Act
               or any state securities law, or if an exemption from such
               registration and qualification is available, (d) the Pooling and
               Servicing Agreement contains restrictions regarding the transfer
               of the Certificates and (e) the Certificates will bear a legend
               to the foregoing effect.

                                      G-1-1

<PAGE>

                       2. The Purchaser is acquiring the Certificates for its
               own account for investment only and not with a view to or for
               sale in connection with any distribution thereof in any manner
               that would violate the Act or any applicable state securities
               laws.

                       3. The Purchaser is (a) a substantial, sophisticated
               institutional investor having such knowledge and experience in
               financial and business matters, and, in particular, in such
               matters related to securities similar to the Certificates, such
               that it is capable of evaluating the merits and risks of
               investment in the Certificates, (b) able to bear the economic
               risks of such an investment and (c) an "accredited investor"
               within the meaning of Rule 501 (a) promulgated pursuant to the
               Act.

                       4. The Purchaser has been furnished with, and has had an
               opportunity to review (a) [a copy of the Private Placement
               Memorandum, dated _________ __, 200_, relating to the
               Certificates (b)] a copy of the Pooling and Servicing Agreement
               and [(b)] [(c)] such other information concerning the
               Certificates, the Mortgage Loans and the Company as has been
               requested by the Purchaser from the Company or the Seller and is
               relevant to the Purchaser's decision to purchase the
               Certificates. The Purchaser has had any questions arising from
               such review answered by the Company or the Seller to the
               satisfaction of the Purchaser. [If the Purchaser did not purchase
               the Certificates from the Seller in connection with the initial
               distribution of the Certificates and was provided with a copy of
               the Private Placement Memorandum (the "Memorandum") relating to
               the original sale (the "Original Sale") of the Certificates by
               the Company, the Purchaser acknowledges that such Memorandum was
               provided to it by the Seller, that the Memorandum was prepared by
               the Company solely for use in connection with the Original Sale
               and the Company did not participate in or facilitate in any way
               the purchase of the Certificates by the Purchaser from the
               Seller, and the Purchaser agrees that it will look solely to the
               Seller and not to the Company with respect to any damage,
               liability, claim or expense arising out of, resulting from or in
               connection with (a) error or omission, or alleged error or
               omission, contained in the Memorandum, or (b) any information,
               development or event arising after the date of the Memorandum.]

                       5. The Purchaser has not and will not nor has it
               authorized or will it authorize any person to (a) offer, pledge,
               sell, dispose of or otherwise transfer any Certificate, any
               interest in any Certificate or any other similar security to any
               person in any manner, (b) solicit any offer to buy or to accept a
               pledge, disposition of other transfer of any Certificate, any
               interest in any Certificate or any other similar security from
               any person in any manner, (c) otherwise approach or negotiate
               with respect to any Certificate, any interest in any Certificate
               or any other similar security with any person in any manner, (d)
               make any general solicitation by means of general advertising or
               in any other manner or (e) take any other action, that (as to any
               of (a) through (e) above) would constitute a distribution of any
               Certificate under the Act,

                                      G-1-2

<PAGE>

               that would render the disposition of any Certificate a violation
               of Section 5 of the Act or any state securities law, or that
               would require registration or qualification pursuant thereto. The
               Purchaser will not sell or otherwise transfer any of the
               Certificates, except in compliance with the provisions of the
               Pooling and Servicing Agreement.

                                               Very truly yours,

                                               (Purchaser)

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

                                      G-1-3

<PAGE>

                                   EXHIBIT G-2

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                         ______________,200___

AB Mortgage Securities Corp.
91 Westborough Boulevard
Suite 200
South San Francisco, California 94080

[Name of Trustee]
----------------------
----------------------
----------------------

Attention: AB Mortgage Securities Corp., Series 200_-_

           Re: AB Mortgage Securities Corp.,
               Mortgage Pass-Through Certificates, Series 200_-_, Class __
               -----------------------------------------------------------

Ladies and Gentlemen:

        In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of
Mortgage Pass-Through Certificates, Series 200_-_, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of __________ 1, 200_ among AB
Mortgage Securities Corp., as company (the "Company"), [Name of Master
Servicer], as master servicer and [Name of Trustee], as trustee (the "Trustee").
The Seller hereby certifies, represents and warrants to, a covenants with, the
Company and the Trustee that:

        Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any

                                      G-2-1

<PAGE>

Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act in any manner set forth in the foregoing sentence with respect to
any Certificate. The Seller has not and will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.

                                                  Very truly yours,

                                                  (Seller)

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

                                      G-2-2

<PAGE>

                                   EXHIBIT G-3
                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF    )
            :ss.:
COUNTY OF   )

        ___________________, being first duly sworn, deposes, represents and
warrants:

        1. That he/she is [Title of Officer] of [Name of Owner], a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of __________] [the United States], (the "Owner"), (record or beneficial
owner of the Class R Certificates (the "Class R Certificates") on behalf of
which he/she makes this affidavit and agreement). This Class R Certificates were
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") dated as of _________ 1, 200_ among AB Mortgage Securities
Corp., as company, [Name of Master Servicer], as master servicer (the "Master
Servicer"), and [Name of Trustee], as trustee (the "Trustee").

        2. That the Owner (i) is not and will not be a "disqualified
organization" as of _____________ [date of transfer] within the meaning of
Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the
"Code"), (ii) will endeavor to remain other than a disqualified organization for
so long as it retains its ownership interest in the Class R Certificates, and
(iii) is acquiring the Class R Certificates for its own account or for the
account of another Owner from which it has received an affidavit and agreement
in substantially the same form as this affidavit and agreement. (For this
purpose, a "disqualified organization" means the United States, any state or
political subdivision thereof, any agency or instrumentality of any of the
foregoing (other than an instrumentality all of the activities of which are
subject to tax and, except for Freddie Mac, a majority of whose board of
directors is not selected by any such governmental entity) or any foreign
government, international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).

        3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations under the Code,
that applies to all transfers of Class R Certificates after March 31, 1988; (ii)
that such tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization and,
at the time of transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that the Class R Certificates may be "noneconomic
residual

                                      G-3-1

<PAGE>

interests" within the meaning of Treasury regulations promulgated pursuant to
the Code and that the transferor of a noneconomic residual interest will remain
liable for any taxes due with respect to the income on such residual interest,
unless no significant purpose of the transfer was to impede the assessment or
collection of tax.

        4. That the Owner is aware of the tax imposed on a "pass-through entity"
holding Class R Certificates if at any time during the taxable year of the
pass-through entity a disqualified organization is the record holder of an
interest in such entity. (For this purpose, a "pass through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

        5. That the Owner is aware that the Trustee will not register the
transfer of any Class R Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees that it will not consummate any such transfer if it knows or believes
that any of the representations contained in such affidavit and agreement are
false.

        6. That the Owner has reviewed the restrictions set forth on the face of
the Class R Certificates and the provisions of Section 5.02(f) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clause (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event the Owner holds such Certificates in
violation of Section 5.02(f)). The Owner expressly agrees to be bound by and to
comply with such restrictions and provisions.

        7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.

        8.     The Owner's Taxpayer Identification Number is __________________.

        9. This affidavit and agreement relates only to the Class R Certificates
held by the owner and not to any other holder of the Class R Certificates. The
Owner understands that the liabilities described herein relate only to the Class
R Certificates.

        10. That no purpose of the Owner relating to the transfer of any of the
Class R Certificates by the Owner is or will be to impede the assessment or
collection of any tax.

        11. That the Owner has no present knowledge or expectation that it will
be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class R Certificate
that the Owner intends to pay taxes associated with holding such Class R

                                      G-3-2

<PAGE>

Certificate as they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class R Certificate.

        12. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Class R Certificates remain outstanding.

        13. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, provided that
with respect to any partnership or other entity treated as a partnership for
United States federal income tax purposes, 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 required by the applicable
operative agreement to be United States Persons, or an estate or trust whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States.

        14. (a) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101
or otherwise under ERISA, and (iii) will not be transferred to any entity that
is deemed to be investing in plan assets within the meaning of the DOL
regulation, 29 C.F.R. ss. 2510.3-101 or otherwise under ERISA; or

               (b) The Owner will provide the Trustee, the Company and the
Master Servicer with an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee, the Company and the Master Servicer to
the effect that the purchase of Certificates is permissible under applicable
law, will not constitute or result in any non-exempt prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Trustee, the
Company or the Master Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in addition
to those undertaken in the Pooling and Servicing Agreement.

        In addition, the Owner hereby certifies, represents and warrants to, and
covenants with, the Company, the Trustee and the Master Servicer that the Owner
will not transfer such Certificates to any Plan or person unless either such
Plan or person meets the requirements set forth in either (a) or (b) above.

                                      G-3-3

<PAGE>

        Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.

                                      G-3-4

<PAGE>

        IN WITNESS WHEREOF, the Owner has caused this instrument to be executed
on its behalf, by its [Title of Officer] and its corporate seal to be hereunto
attached, attested by its [Assistant] Secretary, this ______ day of
_____________, _____.

                                             [NAME OF OWNER]

                                       By:
                                          --------------------------------
                                            [Name of Officer]
                                            [Title of Officer]

[Corporate Seal]

ATTEST:

--------------------------------
[Assistant] Secretary

        Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Owner, and acknowledged to me that such
person executed the same as such person's free act and deed and the free act and
deed of the Owner.

        Subscribed and sworn before me this ____ day of ___________, 200__.

                                            --------------------------------
                                                    NOTARY PUBLIC

                                            COUNTY
                                            OF_________________________
                                            STATE
                                            OF___________________________
                                            My Commission expires the ____
                                            day of __________ ,200__.

                                      G-3-5

<PAGE>

                                   EXHIBIT G-4

                         FORM OF TRANSFEROR CERTIFICATE

______________, 200__

AB Mortgage Securities Corp.
91 Westborough Boulevard
Suite 200
South San Francisco, California 94080

[Name of Trustee]
---------------------
---------------------
---------------------

Attention: AB Mortgage Securities Corp., Series 200_-_

               Re:     AB Mortgage Securities Corp.,
                       Mortgage Pass-Through Certificates,
                       Series 200_-_, Class R
                       -----------------------------------

Ladies and Gentlemen:

               This letter is delivered to you in connection with the sale by
________________________ (the "Seller") to
__________________________________________ (the "Purchaser") of a ____%
Percentage Interest in the Mortgage Pass-Through Certificates, Series 200_-_,
Class R (the "Certificates"), issued pursuant to Section 5.02 of the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
_________ 1, 200_, among AB Mortgage Securities Corp., as company (the
"Company"), [Name of Master Servicer], as master servicer and [Name of Trustee],
as trustee (the "Trustee"). All terms used herein and not otherwise defined
shall have the meaning set forth in the Pooling and Servicing Agreement. The
Seller hereby certifies, represents and warrants to, and covenants with, the
Company and the Trustee that:

               1.      No purpose of the Seller relating to the sale of the
Certificates by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.

               2. The Seller understands that the Purchaser has delivered to the
Trustee and the Master Servicer a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit G-3. The Seller does
not know or believe that any representation contained therein is false.

               3.      The Seller has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-

                                      G-4-6

<PAGE>

1(c)(4)(i) and, as a result of that investigation, the Seller has determined
that the Purchaser has historically paid its debts as they have become due and
has found no significant evidence to indicate that the Purchaser will not
continue to pay its debts as they become due in the future. The Seller
understands that the transfer of the Certificates may not be respected for
United States income tax purposes (and the Seller may continue to be liable for
United States income taxes associated therewith) unless the Seller has conducted
such an investigation.

               4.      The Seller has no actual knowledge that the proposed
Transferee is a Disqualified Organization, an agent of a Disqualified
Organization or a Non-United States Person.

                                      Very truly yours,

                                      (Seller)

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

                                      G-4-7

<PAGE>

                                   EXHIBIT G-5
                     FORM OF INVESTOR REPRESENTATION LETTER
                             FOR INSURANCE COMPANIES

                                      G-5-1

<PAGE>

                                    EXHIBIT H

                             MORTGAGE LOAN SCHEDULE

                             (Provided Upon Request)

                                       H-1

<PAGE>

                                    EXHIBIT I

                          SELLER'S WARRANTY CERTIFICATE

                                       I-1

<PAGE>

                                    EXHIBIT J

      FORM OF NOTICE UNDER SECTION 3.24 OF POOLING AND SERVICING AGREEMENT

                                                ___________ __, 200_

[NAME OF TRUSTEE]
----------------------
----------------------
----------------------

                  Re:      AB Mortgage Securities Corp.,
                           Mortgage Pass-Through Certificates,
                           Series 200_-_
                           -----------------------------------

                  Pursuant to Section 3.25 of the Pooling and Servicing
Agreement, dated as of _________ 1, 200_, relating to the Certificates
referenced above, the undersigned does hereby notify you that:

                  (a) The prepayment assumption used in pricing the Certificates
with respect to the Mortgage Loans in Series 200_-_ consisted of a Prepayment
Assumption (the "Prepayment Assumption") of ___% per annum.

                  (b) With respect to each Class of Certificates comprising the
captioned series, set forth below is (i), the first price, as a percentage of
the Certificate Principal Balance or Notional Amount of each Class of
Certificates, at which 10% of the aggregate Certificate Principal Balance or
Notional Amount of each such Class of Certificates was first sold at a single
price, if applicable, or (ii) if more than 10% of a Class of Certificates have
been sold but no single price is paid for at least 10% of the aggregate
Certificate Principal Balance or Notional Amount of such Class of Certificates,
then the weighted average price at which the Certificates of such Class were
sold expressed as a percentage of the Certificate Principal Balance or Notional
Amount of such Class of Certificates, (iii) if less than 10% of the aggregate
Certificate Principal Balance or Notional Amount of a Class of Certificates has
been sold, the purchase price for each such Class of Certificates paid by [Name
of Underwriter] (the "Underwriter"), expressed as a percentage of the
Certificate Principal Balance or Notional Amount of such Class of Certificates
calculated by: (1) estimating the fair

                                       J-1

<PAGE>

market value of each such Class of Certificates as of March, 2002; (2) adding
such estimated fair market value to the aggregate purchase prices of each Class
of Certificates described in clause (i) or (ii) above; (3) dividing each of the
fair market values determined in clause (1) by the sum obtained in clause (2);
(4) multiplying the quotient obtained for each Class of Certificates in clause
(3) by the purchase price paid by the Underwriter for all the Certificates
purchased by it; and (5) for each Class of Certificates, dividing the product
obtained from such Class of Certificates in clause (4) by the initial
Certificate Principal Balance or Notional Amount of such Class of Certificates
or (iv) the fair market value (but not less than zero) as of the Closing Date of
each Certificate of each Class of Certificates retained by the Company or an
affiliate corporation, or delivered to the seller:

SERIES 200_-_
-------------
Class A:          ____%
Class B:          ____%
Class R:          ____%

                  The prices and values set forth above do not include accrued
interest with respect to periods before the closing.

                                                AB MORTGAGE SECURITIES CORP.

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

                                       J-2

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