Document:

STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
                                     SELLER

                              JPMORGAN CHASE BANK,
                                     TRUSTEE

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                  MASTER SERVICER AND SECURITIES ADMINISTRATOR

                                       and

                            EMC MORTGAGE CORPORATION

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

                         POOLING AND SERVICING AGREEMENT

                            Dated as of April 1, 2003

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

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

                                  Series 2003-3

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----

                                    ARTICLE I
                                   Definitions

                                   ARTICLE II
                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates
<S>                                                                                                            <C>
         Section 2.01      CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE...............................................37
         Section 2.02      ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE...............................................39
         Section 2.03      ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE AGREEMENT........................42
         Section 2.04      SUBSTITUTION OF MORTGAGE LOANS........................................................43
         Section 2.05      ISSUANCE OF CERTIFICATES..............................................................44
         Section 2.06      REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER..................................44

                                                    ARTICLE III
                                  Administration and Servicing of Mortgage Loans
         Section 3.01      MASTER SERVICER.......................................................................46
         Section 3.02      REMIC-RELATED COVENANTS...............................................................47
         Section 3.03      MONITORING OF SERVICERS...............................................................47
         Section 3.04      FIDELITY BOND.........................................................................48
         Section 3.05      POWER TO ACT; PROCEDURES..............................................................48
         Section 3.06      DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS............................................49
         Section 3.07      RELEASE OF MORTGAGE FILES.............................................................49
         Section 3.08      DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER TO BE HELD FOR
TRUSTEE..........................................................................................................50
         Section 3.09      STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES................................51
         Section 3.10      PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS......................................51
         Section 3.11      MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES................................52
         Section 3.12      TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES AND DOCUMENTS..............52
         Section 3.13      REALIZATION UPON DEFAULTED MORTGAGE LOANS.............................................53
         Section 3.14      COMPENSATION FOR THE MASTER SERVICER..................................................53
         Section 3.15      REO PROPERTY..........................................................................53
         Section 3.16      ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.........................................54
         Section 3.17      ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT......................................54
         Section 3.18      REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.................................55
         Section 3.19      EMC...................................................................................55
         Section 3.20      UCC...................................................................................56
         Section 3.21      OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.........................................56

                                                    ARTICLE IV
                                                     Accounts
         Section 4.01      PROTECTED ACCOUNTS....................................................................57
         Section 4.02      MASTER SERVICER COLLECTION ACCOUNT....................................................58

                                                        -i-

<PAGE>

         Section 4.03      PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER SERVICER COLLECTION ACCOUNT
..................................................................................................................59
         Section 4.04      DISTRIBUTION ACCOUNT..................................................................60
         Section 4.05      PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION ACCOUNT.....................61

                                                     ARTICLE V
                                                   Certificates
         Section 5.01      CERTIFICATES..........................................................................63
         Section 5.02      REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.................................73
         Section 5.03      MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.....................................76
         Section 5.04      PERSONS DEEMED OWNERS.................................................................77
         Section 5.05      TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES........................................77
         Section 5.06      RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES.......................................78
         Section 5.07      ERISA RESTRICTIONS....................................................................78
         Section 5.08      RULE 144A INFORMATION.................................................................80

                                                    ARTICLE VI
                                          Payments to Certificateholders
         Section 6.01      DISTRIBUTIONS ON THE CERTIFICATES.....................................................81
         Section 6.02      ALLOCATION OF LOSSES..................................................................85
         Section 6.03      PAYMENTS..............................................................................86
         Section 6.04      STATEMENTS TO CERTIFICATEHOLDERS......................................................87
         Section 6.05      MONTHLY ADVANCES......................................................................89
         Section 6.06      COMPENSATING INTEREST PAYMENTS........................................................90

                                                    ARTICLE VII
                                                The Master Servicer
         Section 7.01      LIABILITIES OF THE MASTER SERVICER....................................................91
         Section 7.02      MERGER OR CONSOLIDATION OF THE MASTER SERVICER........................................91
         Section 7.03      INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER AND THE SECURITIES ADMINISTRATOR
..................................................................................................................91
         Section 7.04      LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND OTHERS............................92
         Section 7.05      MASTER SERVICER NOT TO RESIGN.........................................................93
         Section 7.06      SUCCESSOR MASTER SERVICER.............................................................93
         Section 7.07      SALE AND ASSIGNMENT OF MASTER SERVICING...............................................93

                                                   ARTICLE VIII
                                                      Default
         Section 8.01      EVENTS OF DEFAULT.....................................................................95
         Section 8.02      TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR..............................................97
         Section 8.03      NOTIFICATION TO CERTIFICATEHOLDERS....................................................98
         Section 8.04      WAIVER OF DEFAULTS....................................................................98
         Section 8.05      LIST OF CERTIFICATEHOLDERS............................................................98

                                                    ARTICLE IX
                              Concerning the Trustee and the Securities Administrator

                                                       -ii-

<PAGE>

         Section 9.01      DUTIES OF TRUSTEE.....................................................................99
         Section 9.02      CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR...............101
         Section 9.03      TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS
.................................................................................................................103
         Section 9.04      TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES............................103
         Section 9.05      TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND EXPENSES...........................103
         Section 9.06      ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES ADMINISTRATOR....................104
         Section 9.07      INSURANCE............................................................................104
         Section 9.08      RESIGNATION AND REMOVAL OF THE TRUSTEE AND SECURITIES ADMINISTRATOR..................104
         Section 9.09      SUCCESSOR TRUSTEE AND SUCCESSOR SECURITIES ADMINISTRATOR.............................105
         Section 9.10      MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES ADMINISTRATOR.......................106
         Section 9.11      APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE........................................106
         Section 9.12      FEDERAL INFORMATION RETURNS AND REPORTS TO CERTIFICATEHOLDERS; REMIC
ADMINISTRATION..................................................................................................107

                                                     ARTICLE X
                                                    Termination
         Section 10.01     TERMINATION UPON REPURCHASE BY THE SELLER OR ITS DESIGNEE OR LIQUIDATION OF THE
MORTGAGE LOANS..................................................................................................110
         Section 10.02     ADDITIONAL TERMINATION REQUIREMENTS..................................................112

                                                    ARTICLE XI
                                             Miscellaneous Provisions
         Section 11.01     INTENT OF PARTIES....................................................................114
         Section 11.02     AMENDMENT............................................................................114
         Section 11.03     RECORDATION OF AGREEMENT.............................................................115
         Section 11.04     LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...........................................115
         Section 11.05     ACTS OF CERTIFICATEHOLDERS...........................................................116
         Section 11.06     GOVERNING LAW........................................................................117
         Section 11.07     NOTICES..............................................................................117
         Section 11.08     SEVERABILITY OF PROVISIONS...........................................................117
         Section 11.09     SUCCESSORS AND ASSIGNS...............................................................118
         Section 11.10     ARTICLE AND SECTION HEADINGS.........................................................118
         Section 11.11     COUNTERPARTS.........................................................................118
         Section 11.12     NOTICE TO RATING AGENCIES............................................................118
</TABLE>

                                      -iii-

<PAGE>

                                    EXHIBITS

Exhibit A-1         -    Form of Class [A][A-_-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-9  -    Servicing Agreements
Exhibit I           -    Assignment Agreements
Exhibit J           -    Mortgage Loan Purchase Agreement

                                      -iv-

<PAGE>

                         POOLING AND SERVICING AGREEMENT

         Pooling and Servicing Agreement dated as of April 1, 2003, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as seller
(the "Seller"), JPMorgan Chase Bank, a New York banking corporation, not in its
individual capacity but solely as trustee (the "Trustee"), Wells Fargo Bank
Minnesota, National Association, as master servicer (in such capacity, the
"Master Servicer") and as securities administrator (in such capacity, the
"Securities Administrator"), and EMC Mortgage Corporation ("EMC").

                              PRELIMINARY STATEMENT

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

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

         The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC III to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC III Regular Certificates will be designated
"regular interests" in such REMIC and the Class R-III Certificate will be
designated the "residual interest" 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 $897,481,009. 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-

<PAGE>

                                    ARTICLE I
                                   Definitions

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

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

         ACCOUNT: The Master Servicer Collection Account and the Protected
Account as the context may require.

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

         ADDITIONAL COLLATERAL: As defined in the Cendant Servicing Agreements.

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

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

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

         ALLIANCE: Alliance Mortgage Company, or its successor in interest.

                                       -2-

<PAGE>

         ALLIANCE SERVICING AGREEMENT: With respect to the Mortgage Loans
originated by E-LOAN, the Subservicing Agreement dated as of August 1, 2002
between EMC and Alliance, as attached hereto as Exhibit H-1.

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

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

         (b) as to any Distribution Date and amounts distributable pursuant to
clauses (ii), (iii) and (v) of the definition of Subordinate Optimal Principal
Amount, and as to each Class of Subordinate Certificates (other than the Class
of Subordinate Certificates having the lowest numerical designation as to which
the Class Prepayment Distribution Trigger shall not be applicable) for which (x)
the related Class Prepayment Distribution Trigger has been satisfied on such
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is the Current Principal Amount of such Class and the denominator of which
is the aggregate Current Principal Amount of all such Classes of Subordinate
Certificates and (y) the related Class Prepayment Distribution Trigger has not
been satisfied on such Distribution Date, 0%; provided that if on a Distribution
Date, the Current Principal Amount of any Class of Subordinate Certificates for
which the related Class Prepayment Distribution Trigger was satisfied on such
Distribution Date is reduced to zero, any amounts distributed pursuant to this
clause (b), to the extent of such Class's remaining Allocable Share, shall be
distributed to the remaining Classes of Subordinate Certificates which satisfy
the related Class Prepayment Distribution Trigger and to the Class of
Subordinate Certificates having the lowest numerical designation in reduction of
their respective Current Principal Amounts in the order of their numerical Class
designations.

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

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

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

         ASSIGNMENT AGREEMENTS: The agreements attached hereto as Exhibit I,
whereby the Servicing Agreements were assigned to the Trustee for the benefit of
the Certificateholders.

                                       -3-

<PAGE>

         ASSIGNMENT OF PROPRIETARY LEASE: With respect to a Cooperative Loan,
the assignment of the related Cooperative Lease from the Mortgagor to the
originator of the Cooperative Loan.

         ASSUMED FINAL DISTRIBUTION DATE: May 25, 2033, or if such day is not a
Business Day, the next succeeding Business Day.

         AVAILABLE FUNDS: With respect to any Distribution Date, the sum of the
Group 1, Group 2, Group 3 and Group 4 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.

         BANK OF AMERICA: Bank of America, or its successor in interest.

         BANK OF AMERICA SERVICING AGREEMENT: The Flow Mortgage Loan Sale and
Servicing Agreement, dated as of March 1, 2003, between EMC Mortgage Corporation
(as purchaser) and Bank of America (as seller and servicer), attached hereto as
Exhibit H-2.

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

         BANKRUPTCY LOSS: With respect to any Mortgage Loan, any Deficient
Valuation or Debt Service Reduction related to such Mortgage Loan as reported by
the applicable Servicer to the Master Servicer.

         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 the jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities Administrator are authorized or
obligated by law or executive order to be closed.

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

         CENDANT: Cendant Mortgage Corporation, or its successor in interest.

         CENDANT SERVICING AGREEMENTS: The Mortgage Loan Flow Purchase, Sale and
Servicing Agreement dated as of April 26, 2001, among EMC (as purchaser),
Cendant and Bishop's Gate Residential Mortgage Trust (formerly known as Cendant
Residential Mortgage Trust) (as sellers) and, with respect to the Mortgage Loans
secured by Additional Collateral, Additional Collateral Assignment and Servicing
Agreement, dated as of April 26, 2001 between Cendant and EMC

                                       -4-

<PAGE>

(whereby MLCC retained its rights to service the Additional Collateral in
accordance thereto), each as attached hereto as Exhibit H-3.

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

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

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

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.

         CERTIFICATEHOLDER: A Holder of a Certificate.

         CHEVY CHASE: Chevy Chase Bank F.S.B., or its successor in interest.

         CHEVY CHASE SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement, dated as of July 1, 2001, between EMC Mortgage Corporation and Chevy
Chase Bank, F.S.B., attached hereto as Exhibit H-4.

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

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

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

         CLOSING DATE: April 30, 2003.

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

         COMPENSATING INTEREST PAYMENT: As defined in Section 6.06.\

         COOPERATIVE: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and

                                      -5-

<PAGE>

common areas therein and whose board of directors authorizes, among other
things, the sale of Cooperative Stock.

         COOPERATIVE APARTMENT: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an exclusive
right to occupy pursuant to the terms of a proprietary lease or occupancy
agreement.

         COOPERATIVE LEASE: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.

         COOPERATIVE LOAN: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements and (v) a stock
power (or other similar instrument), and ancillary thereto, a recognition
agreement between the Cooperative and the originator of the Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.

         COOPERATIVE STOCK: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.

         COOPERATIVE STOCK CERTIFICATE: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.

         CORRESPONDING CLASS: With respect to (i) REMIC II Regular Interest
I-A-1, (ii) REMIC II Regular Interest I-A-2, (iii) REMIC II Regular Interest
II-A-1, (iv) REMIC II Regular Interest II-A-2, (v) REMIC II Regular Interest
II-A-3, (vi) REMIC II Regular Interest II-A-4, (vii) REMIC II Regular Interest
III-A-1, (viii) REMIC II Regular Interest III-A-2, (ix) REMIC II Regular
Interest III-A-3, (x) REMIC II Regular Interest IV-A-1, (xi) REMIC II Regular
Interest B-1, (xii) REMIC II Regular Interest B-2, (xiii) REMIC II Regular
Interest B-3, (xiv) REMIC II Regular Interest B-4, (xv) REMIC II Regular
Interest B-5, (xvi) REMIC II Regular Interest B-6, and (xvii) REMIC II Regular
Interest MT-R, (i) the Class I-A-1 Certificates, (ii) the Class I-A-2
Certificates, (iii) the Class II-A-1 Certificates, (iv) the Class II-A-2
Certificates, (v) the Class II-A-3 Certificates, (vi) the Class II-A-4
Certificates, (vii) the Class III-A-1 Certificates, (viii) the Class III-A-2
Certificates, (ix) the Class III-A-3 Certificates, (x) the Class IV-A-1
Certificates, (xi) the Class B-1 Certificates, (xii) the Class B-2 Certificates,
(xiii) the Class B-3 Certificates, (xiv) the Class B-4 Certificates, (xv) the
Class B-5 Certificates, (xvi) the Class B-6 Certificates and (xvii) the Class
R-III Certificates, respectively.

         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 4 New York Plaza, 6th
Floor, New York, New York 10004, Attention: Institutional Trust
Services/Structured Finance Services, BART Series 2003-3. For purposes of
registration and transfer and exchange only, the Corporate Trust Office shall be
located at 2001 Bryan Street, 8th Floor, Dallas, Texas 75201, Attn: ITS Transfer
Dept. - BART Series 2003-3.

                                       -6-

<PAGE>

         COUNTRYWIDE: Countrywide Home Loans, Inc., or its successor in
interest.

         COUNTRYWIDE SERVICING AGREEMENT: The Seller's Warranties and Servicing
Agreement, dated as of September 1, 2002, between EMC Mortgage Corporation and
Countrywide Home Loans, Inc., attached hereto as Exhibit H-5.

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

         CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other than
an Interest Only Certificate) as of any Distribution Date, the initial principal
amount of such Certificate, and reduced by (i) all amounts distributed on
previous Distribution Dates on such Certificate with respect to principal, (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Certificate, taking account of the Loss Allocation
Limitation and (iii) in the case of a Subordinate Certificate, such
Certificate's pro rata share, if any, of the applicable Subordinate Certificate
Writedown Amount for previous Distribution Dates. With respect to any Class of
Certificates (other than the 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 and Class R-III 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: April 1, 2003.

         CUT-OFF DATE BALANCE: $897,481,009.

         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.

                                       -7-

<PAGE>

         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 4.04, which shall be denominated "JPMorgan Chase
Bank, as Trustee f/b/o holders of Structured Asset Mortgage Investments Inc.,
Bear Stearns ARM Trust, Mortgage Pass-Through Certificates, Series 2003-3 -
Distribution Account." The Distribution Account shall be an Eligible Account.

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

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

         DTC CUSTODIAN: JPMorgan Chase Bank, or its successors in interest as
custodian for the Depository.

                                      -8-

<PAGE>

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

         DUE PERIOD: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the month
in which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.

         ELIGIBLE ACCOUNT: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1 or better by Standard & Poor's and P-1 by Moody's at the
time of any deposit therein or (B) 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
the Person requesting that the account be held pursuant to this clause (i))
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 Investments, 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 Investment is an obligation of the institution that maintains the
Distribution 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, (ii) a segregated 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 (iii) a segregated
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 Distribution Account will not have an adverse effect on the then-
current ratings assigned to the Classes of Certificates then rated by the Rating
Agencies). Eligible Accounts may bear interest.

         EMC: EMC Mortgage Corporation.

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

         EVENT OF DEFAULT: An event of default described in Section 8.01.

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

         E*TRADE: E*TRADE Bank, or its successor in interest.

         E-LOAN: E-LOAN, Inc., or its successor in interest.

                                       -9-

<PAGE>

         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.

         FITCH: Fitch, Inc.

         FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount, or Notional
Amount in the case of the Interest Only Certificates, of such Certificate and
the denominator of which is the Current Principal Amount, or Notional Amount in
the case of the Interest Only Certificates, of such Class. With respect to the
Certificates in the aggregate, the fractional undivided interest evidenced by
(i) a Residual Certificate will be deemed to equal 0.25% multiplied by the
percentage interest of such Residual Certificate, and (ii) 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 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 92.25% multiplied by a fraction, the
numerator of which is the Current Principal Amount of such Certificate and the
denominator of which is the aggregate Current Principal Amount of all the
Certificates.

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

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

         GMAC: GMAC Mortgage Corporation, or its successor in interest.

         GMAC SERVICING AGREEMENT: The Servicing Agreement, dated as of May 1,
2001, as between EMC and GMAC, as amended, attached hereto as Exhibit H-6.

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

         GROUP 1 AVAILABLE FUNDS, GROUP 2 AVAILABLE FUNDS, GROUP 3 AVAILABLE
FUNDS OR GROUP 4 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

                                      -10-

<PAGE>

Payments, Principal Prepayments and the principal portion of Net Liquidation
Proceeds) and all previously undistributed payments on account of interest
received after the Cut-off Date and on or prior to the related Determination
Date, (b) any Monthly Advances and Compensating Interest Payments by the
Servicers or the Master Servicer with respect to such Distribution Date and (c)
any reimbursed amount in connection with losses on investments of deposits in an
account, except:

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

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

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

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

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

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

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

                  (viii) to pay any fees with respect to any lender-paid primary
         mortgage insurance policy; and

                  (ix) any expenses or other amounts reimbursable to the
         Trustee, the Securities Administrator and the Custodian pursuant to
         Section 7.04(c) or Section 9.05.

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

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

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

                                      -11-

<PAGE>

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

         GROUP 1 SENIOR CERTIFICATES: The Class I-A-1, Class I-X-A-1, Class
I-A-2, Class R-I, Class R-II and Class R-III Certificates.

         GROUP 2 SENIOR CERTIFICATES: The Class II-A-1, Class II-X-A-1, Class
II-A-2, Class II-X-A-2, Class II-A-3, Class II-X-A-3, Class II-A-4 and Class
II-X-A-4 Certificates.

         GROUP 3 SENIOR CERTIFICATES: The Class III-A-1, Class III-A-2, Class
III-X-A-2, Class III-A-3 and Class III-X-A-3 Certificates.

         GROUP 4 SENIOR CERTIFICATES: The Class IV-A-1 Certificates.

         GROUP 1 SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP 2 SENIOR OPTIMAL
PRINCIPAL AMOUNT, GROUP 3 SENIOR OPTIMAL PRINCIPAL AMOUNT AND GROUP 4 SENIOR
OPTIMAL PRINCIPAL AMOUNT: With respect to each Distribution Date, an amount
equal to the sum, without duplication, of the following (but in no event greater
than the aggregate Current Principal Amounts of the Group 1, Group 2, Group 3 or
Group 4 Senior Certificates, as applicable, immediately prior to such
Distribution Date):

                  (i) the applicable Senior Percentage of the principal portion
         of all Scheduled 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 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 the
         Scheduled Principal Balance of each Mortgage Loan in the related Loan
         Group which was the subject of a Principal Prepayment in full received
         by the Master Servicer during the related Prepayment Period;

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

                  (iv) the lesser of (a) the applicable Senior Prepayment
         Percentage of the sum 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 such 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, if any, or
         otherwise; and (b) the applicable Senior Percentage of the sum of (A)
         the Scheduled Principal Balance of each Mortgage Loan in the related
         Loan Group which became a Liquidated Mortgage Loan during the related
         Prepayment Period (other than the Mortgage

                                      -12-

<PAGE>

         Loans described in the immediately following clause (B)) and (B) the
         Scheduled Principal Balance of each such Mortgage Loan in the related
         Loan Group that was purchased by an insurer from the Trustee during the
         related Prepayment Period pursuant to the related Primary Mortgage
         Insurance Policy, if any or otherwise; 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 which was repurchased by the Mortgage Loan Seller in
         connection with 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 the Mortgage Loan Purchase
         Agreement in connection with such Distribution Date over the Scheduled
         Principal Balance of such substitute Mortgage Loan.

         GROUP 1 SENIOR PERCENTAGE: Initially, 97.05%. 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 (other than the Interest Only 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, 97.05%. 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 (other than the Interest Only Certificates) immediately
preceding such Distribution Date by the aggregate Scheduled Principal Balance of
the Group 2 Mortgage Loans as of the beginning of the related Due Period.

         GROUP 3 SENIOR PERCENTAGE: Initially, 97.05%. 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 3
Senior Certificates (other than the Interest Only Certificates) immediately
preceding such Distribution Date by the aggregate Scheduled Principal Balance of
the Group 3 Mortgage Loans as of the beginning of the related Due Period.

         GROUP 4 SENIOR PERCENTAGE: Initially, 97.05%. 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 4
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 4 Mortgage Loans as of the
beginning of the related Due Period.

         GROUP 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
------------------------------  ------------------------------------------------
May 25, 2003 - April 25, 2010   100%
May 25, 2010 - April 25, 2011   Group 1 Senior Percentage plus 70% of the Group
                                1 Subordinate Percentage

                                      -13-

<PAGE>

May 25, 2011 - April 25, 2012   Group 1 Senior Percentage plus 60% of the Group
                                1 Subordinate Percentage
May 25, 2012 - April 25, 2013   Group 1 Senior Percentage plus 40% of the Group
                                1 Subordinate Percentage
May 25, 2013 - April 25, 2014   Group 1 Senior Percentage plus 20% of the Group
                                1 Subordinate Percentage
May 25, 2014 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 sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including May 2010 and April 2011, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including May 2011 and
April 2012, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including May 2012 and April 2013, (d) 45%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including May 2013 and April 2014, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
May 2014.

         In addition, if the current weighted average of the Subordinate
Percentages for the Certificates is equal to or greater than two times the
initial weighted average of the Subordinate Percentages 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
Subordinate Certificates does not exceed 50% and (b)(i) on or prior to the
Distribution Date in April 2006 cumulative Realized Losses on the Mortgage Loans
do not exceed 20% of the Original Subordinate Principal Balance and (ii) after
the Distribution Date in April 2006 cumulative Realized Losses on the Mortgage
Loans do not exceed 30% of the Original Subordinate Principal Balance, then, the
Group 1 Senior Prepayment Percentage for such Distribution Date will equal the
Group 1 Senior Percentage; provided, however, if the current weighted average of
the Subordinate Percentages for the Certificates is equal to or greater than two
times the initial weighted average of the Subordinate Percentages for the
Certificates prior to May 25, 2006 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 Group 1 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

                                      -14-

<PAGE>

Senior Prepayment Percentage shall be the minimum percentage sufficient to
effect such reduction and thereafter shall be zero.

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

Period (dates inclusive)         Group 2 Senior Prepayment Percentage
------------------------------   -----------------------------------------------
May 25, 2003 - April 25, 2010    100%
May 25, 2010 - April 25, 2011    Group 2 Senior Percentage plus 70% of the Group
                                 2 Subordinate Percentage
May 25, 2011 - April 25, 2012    Group 2 Senior Percentage plus 60% of the Group
                                 2 Subordinate Percentage
May 25, 2012 - April 25, 2013    Group 2 Senior Percentage plus 40% of the Group
                                 2 Subordinate Percentage
May 25, 2013 - April 25, 2014    Group 2 Senior Percentage plus 20% of the Group
                                 2 Subordinate Percentage
May 25, 2014 and thereafter      Group 2 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 sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including May 2010 and April 2011, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including May 2011 and
April 2012, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including May 2012 and April 2013, (d) 45%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including May 2013 and April 2014, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
May 2014.

         In addition, if the current weighted average of the Subordinate
Percentages is equal to or greater than two times the initial weighted average
of the Subordinate Percentages 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 Subordinate Certificates does not
exceed 50% and (b)(i) on or prior to the Distribution Date in April 2006
cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the
Original Subordinate Principal Balance and (ii) after the Distribution Date in
April 2006 cumulative Realized Losses on the Mortgage Loans do not exceed 30% of
the Original Subordinate Principal Balance, then, the Group 2 Senior Prepayment
Percentage for such Distribution Date will equal the Group 2

                                      -15-

<PAGE>

Senior Percentage; provided, however, if the current weighted average of the
Subordinate Percentages for the Certificates is equal to or greater than two
times the initial weighted average of the Subordinate Percentages for the
Certificates prior to May 25, 2006 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 Group 2 Subordinate
Percentage.

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

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

Period (dates inclusive)         Group 3 Senior Prepayment Percentage
------------------------------   -----------------------------------------------
May 25, 2003 - April 25, 2010    100%
May 25, 2010 - April 25, 2011    Group 3 Senior Percentage plus 70% of the Group
                                 3 Subordinate Percentage
May 25, 2011 - April 25, 2012    Group 3 Senior Percentage plus 60% of the Group
                                 3 Subordinate Percentage
May 25, 2012 - April 25, 2013    Group 3 Senior Percentage plus 40% of the Group
                                 3 Subordinate Percentage
May 25, 2013 - April 25, 2014    Group 3 Senior Percentage plus 20% of the Group
                                 3 Subordinate Percentage
May 25, 2014 and thereafter      Group 3 Senior Percentage

         In addition, no reduction of the Group 3 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (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 sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including May 2010 and April 2011, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including May 2011 and
April 2012, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including May 2012 and April 2013, (d) 45%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including May 2013 and April 2014, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
May 2014.

         In addition, if the current weighted average of the Subordinate
Percentages is equal to or greater than two times the initial weighted average
of the Subordinate Percentages for the

                                      -16-

<PAGE>

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
Subordinate Certificates does not exceed 50% and (b)(i) on or prior to the
Distribution Date in April 2006 cumulative Realized Losses on the Mortgage Loans
do not exceed 20% of the Original Subordinate Principal Balance and (ii) after
the Distribution Date in April 2006 cumulative Realized Losses on the Mortgage
Loans do not exceed 30% of the Original Subordinate Principal Balance, then, the
Group 3 Senior Prepayment Percentage for such Distribution Date will equal the
Group 3 Senior Percentage; provided, however, if the current weighted average of
the Subordinate Percentages for the Certificates is equal to or greater than two
times the initial weighted average of the Subordinate Percentages for the
Certificates prior to May 25, 2006 and the above delinquency and loss tests are
met, then the Group 3 Senior Prepayment Percentage for such Distribution Date
will equal the Group 3 Senior Percentage plus 50% of the Group 3 Subordinate
Percentage.

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

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

Period (dates inclusive)         Group 4 Senior Prepayment Percentage
------------------------------   -----------------------------------------------
May 25, 2003 - April 25, 2010    100%
May 25, 2010 - April 25, 2011    Group 4 Senior Percentage plus 70% of the Group
                                 4 Subordinate Percentage
May 25, 2011 - April 25, 2012    Group 4 Senior Percentage plus 60% of the Group
                                 4 Subordinate Percentage
May 25, 2012 - April 25, 2013    Group 4 Senior Percentage plus 40% of the Group
                                 4 Subordinate Percentage
May 25, 2013 - April 25, 2014    Group 4 Senior Percentage plus 20% of the Group
                                 4 Subordinate Percentage
May 25, 2014 and thereafter      Group 4 Senior Percentage

         In addition, no reduction of the Group 4 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (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 sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and

                                      -17-

<PAGE>

including May 2010 and April 2011, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including May 2011 and
April 2012, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including May 2012 and April 2013, (d) 45%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including May 2013 and April 2014, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
May 2014.

         In addition, if the current weighted average of the Subordinate
Percentages is equal to or greater than two times the initial weighted average
of the Subordinate Percentages 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 Subordinate Certificates does not
exceed 50% and (b)(i) on or prior to the Distribution Date in April 2006
cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the
Original Subordinate Principal Balance and (ii) after the Distribution Date in
April 2006 cumulative Realized Losses on the Mortgage Loans do not exceed 30% of
the Original Subordinate Principal Balance, then, the Group 4 Senior Prepayment
Percentage for such Distribution Date will equal the Group 4 Senior Percentage;
provided, however, if the current weighted average of the Subordinate
Percentages for the Certificates is equal to or greater than two times the
initial weighted average of the Subordinate Percentages for the Certificates
prior to May 25, 2006 and the above delinquency and loss tests are met, then the
Group 4 Senior Prepayment Percentage for such Distribution Date will equal the
Group 4 Senior Percentage plus 50% of the Group 4 Subordinate Percentage.

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

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

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

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

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

         GROUP 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

                                      -18-

<PAGE>

each been reduced to zero, if (a) the weighted average of the Subordinate
Percentages on such Distribution Date equals or exceeds two times the initial
weighted average of the Subordinate Percentages and (b) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 100%,
the Group 1 Subordinate Prepayment Percentage will equal 100%. If the test set
forth in the preceding sentence is not satisfied on any Distribution Date after
the Current Principal Amount of the Group 1 Senior Certificates have each been
reduced to zero, then the Group 1 Subordinate Prepayment Percentage will equal
zero for such Distribution Date.

         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, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group 2
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group 2 Senior Certificates have each been reduced to
zero, then the Group 2 Subordinate Prepayment Percentage will equal zero for
such Distribution Date..

         GROUP 3 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group 3
Mortgage Loans, on any Distribution Date, 100% minus the Group 3 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group 3 Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group 3
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group 3 Senior Certificates have each been reduced to
zero, then the Group 3 Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

         GROUP 4 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group 4
Mortgage Loans, on any Distribution Date, 100% minus the Group 4 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group 4 Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such

                                      -19-

<PAGE>

Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group 4
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group 4 Senior Certificates have each been reduced to
zero, then the Group 4 Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

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

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

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

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

         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.

                                      -20-

<PAGE>

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

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

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

         INTEREST ONLY CERTIFICATES: The Class I-X-A-1, Class II-X-A-1, Class
II-X-A-2, Class II-X-A- 3, Class II-X-A-4, Class III-X-A-2 and Class III-X-A-3
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.

                                      -21-

<PAGE>

         LENDER-PAID PMI RATE: With respect to each Mortgage Loan covered by a
lender-paid primary mortgage insurance policy, the amount payable to the related
insurer, as stated in the Mortgage Loan Schedule.

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

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

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

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

         LOAN GROUP: Loan Group 1, Loan Group 2, Loan Group 3 or Loan Group 4,
as applicable.

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

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

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

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

         LOAN-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.

                                      -22-

<PAGE>

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

         MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by all Servicers and signed by an officer of the
Master Servicer that complies with (i) the Sarbanes-Oxley Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superceded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Sarbanes-Oxley Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Seller following a negotiation in good faith to
determine how to comply with any such new requirements.

         MASTER SERVICER COLLECTION ACCOUNT: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"JPMorgan Chase Bank, as Trustee f/b/o holders of Structured Asset Mortgage
Investments Inc., Bear Stearns ARM Trust, Mortgage Pass- Through Certificates,
Series 2003-3 - Master Servicer Collection Account." The Master Servicer
Collection Account shall be an Eligible Account.

         MASTER SERVICING COMPENSATION: The meaning specified in Section 3.14.

         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.

         MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

         MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.

         MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.

         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.

         MOM LOAN: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.

                                      -23-

<PAGE>

         MONTHLY ADVANCE: An advance of principal or interest required to be
made by the applicable Servicer pursuant to the related Servicing Agreement or
the Master Servicer pursuant to Section 6.05.

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

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

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

         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 (which shall include, without
limitation, (i) with respect to each Cooperative Loan, the related Mortgage
Note, Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate, Cooperative Lease and Mortgage File and all rights appertaining
thereto, and (ii) with respect to each Mortgage Loan other than a Cooperative
Loan, each related Mortgage Note, Mortgage and Mortgage File and all rights
appertaining thereto), 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 April 30, 2003, between EMC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto, attached as Exhibit J.

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

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

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

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

         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.

                                      -24-

<PAGE>

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

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

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

         NOTIONAL AMOUNT: The Notional Amount of the Class I-X-A-1 Certificates,
as of any date of determination, is equal to the Current Principal Amount of the
Class I-A-1 Certificates. For federal income tax purposes, however, the notional
amount of the Class I-X-A-1 Certificates is the Uncertificated Principal Balance
of REMIC II Regular Interest I-A-1. The Notional Amount of the Class II-X-A-1
Certificates, as of any date of determination, is equal to the Current Principal
Amount of the Class II-A-1 Certificates. For federal income tax purposes,
however, the notional amount of the Class II-X-A-1 Certificates is the
Uncertificated Principal Balance of REMIC II Regular Interest II-A-1. The
Notional Amount of the Class II-X-A-2 Certificates, as of any date of
determination, is equal to the Current Principal Amount of the Class II-A-2
Certificates. For federal income tax purposes, however, the notional amount of
the Class II-X-A-2 Certificates is the Uncertificated Principal Balance of REMIC
II Regular Interest II-A-2. The Notional Amount of the Class II-X-A-3
Certificates, as of any date of determination, is equal to the Current Principal
Amount of the Class II-A-3 Certificates. For federal income tax purposes,
however, the notional amount of the Class II- X-A-3 Certificates is the
Uncertificated Principal Balance of REMIC II Regular Interest II-A-3. The
Notional Amount of the Class II-X-A-4 Certificates, as of any date of
determination, is equal to the Current Principal Amount of the Class II-A-4
Certificates. For federal income tax purposes, however, the notional amount of
the Class II-X-A-4 Certificates is the Uncertificated Principal Balance of REMIC
II Regular Interest II-A-4. The Notional Amount of the Class III-X-A-2
Certificates, as of any date of determination, is equal to the Current Principal
Amount of the Class III-A-2 Certificates. For federal income tax purposes,
however, the notional amount of the Class III- X-A-2 Certificates is the
Uncertificated Principal Balance of REMIC II Regular Interest III-A-2. The
Notional Amount of the Class III-X-A-3 Certificates, as of any date of
determination, is equal to the Current Principal Amount of the Class III-A-3
Certificates. For federal income tax purposes, however, the notional amount of
the Class III-X-A-3 Certificates is the Uncertificated Principal Balance of
REMIC II Regular Interest III-A-3.

         OFFERED CERTIFICATE: Any Senior Certificate or Offered Subordinate
Certificate.

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

                                      -25-

<PAGE>

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

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

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

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

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

         OUTSTANDING PRINCIPAL BALANCE: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.

         PASS-THROUGH RATE: As to each Class of Certificates and the REMIC I
Regular Interests and REMIC II Regular Interests, the rate of interest
determined as provided with respect thereto, in Section 5.01(c). 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;

                                      -26-

<PAGE>

                  (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 or its
         Affiliates acting in its commercial banking capacity) and subject to
         supervision and examination by federal and/or state banking
         authorities, provided that the commercial paper and/or the short- term
         debt rating and/or the long-term unsecured debt obligations of such
         depository institution or trust company at the time of such investment
         or contractual commitment providing for such investment have the
         Applicable Credit Rating or better from each Rating Agency and (b) any
         other demand or time deposit or certificate of deposit that is fully
         insured by the Federal Deposit Insurance Corporation;

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

                  (iv) securities bearing interest or sold at a discount issued
         by any corporation (including the Trustee or the Master Servicer or its
         Affiliates) 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

                                      -27-

<PAGE>

         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.

         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 Repurchase Proceeds, but excluding 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: Moody's and S&P.

         REALIZED LOSS: Any (i) Bankruptcy Loss 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)

                                      -28-

<PAGE>

the related Net Liquidation Proceeds with respect to such Mortgage Loan and the
related Mortgage Property.

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

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

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

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

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

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

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

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

         REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "A," equal to the ratio among, with respect to each such REMIC I
Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance of
the Mortgage Loans in the related Loan Group over (y) the Current Principal
Amount of the Senior Certificates in the related Group.

         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: As defined in Section 5.01(c).

         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 Certificates and the Class
R-III Certificates.

                                      -29-

<PAGE>

         REMIC III REGULAR CERTIFICATES: 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 or REMIC III to fail to qualify as a REMIC while any
regular interest in such REMIC is outstanding, (ii) result in a tax on
prohibited transactions with respect to any REMIC or (iii) constitute a taxable
contribution to any REMIC after the Startup Day.

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

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

         REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Mortgage Loan
Seller pursuant to the Mortgage Loan Purchase Agreement or Article II of this
Agreement, an amount equal to the sum of (i)(a) 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 (b) 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 (c) any portion of the Master Servicing Compensation, Monthly
Advances and advances payable to the purchaser of the Mortgage Loan and (ii) any
costs and damages (if any) incurred by the Trust in connection with any
violation of such Mortgage Loan of any predatory or abusive lending laws.

         REPURCHASE PROCEEDS: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Mortgage Loan Seller and any cash deposit
in connection with the substitution of a Mortgage Loan.

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

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

         RESIDUAL CERTIFICATES: Any of the Class R Certificates.

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

                                      -30-

<PAGE>

         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 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

                                      -31-

<PAGE>

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
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED [in the case of a
Residual Certificate or a Private Certificate] UNLESS THE OPINION OF COUNSEL
REQUIRED BY SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT IS PROVIDED [in
the case of the Class B-4, Class B-5 and Class B-6 Certificates]:, UNLESS THE
PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
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, ANY 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 AGREEMENT: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.

         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, Group 3 Senior Certificates or Group 4 Senior Certificates.

         SENIOR OPTIMAL PRINCIPAL AMOUNT: The Group 1 Senior Optimal Principal
Amount, Group 2 Senior Optimal Principal Amount, Group 3 Senior Optimal
Principal Amount or Group 4 Senior Optimal Principal Amount, as applicable.

                                      -32-

<PAGE>

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

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

         SERVICER: With respect to each Mortgage Loan, WFHM, GMAC, Bank of
America, US Bank, Chevy Chase, Countrywide, Cendant, WMBFA or Alliance.

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

         SERVICING AGREEMENTS: The Alliance Servicing Agreement, Bank of America
Servicing Agreement, Cendant Servicing Agreements, Chevy Chase Servicing
Agreement, Countrywide Servicing Agreement, GMAC Servicing Agreement, US Bank
Servicing Agreement, WFHM Servicing Agreements and WMBFA Servicing Agreement.

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

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

         STARTUP DAY: April 30, 2003.

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

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

         SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date, an
amount equal to the sum, without duplication, of the following for the Group 1,
Group 2, Group 3 and Group 4 Mortgage Loans (but in no event greater than the
aggregate Current Principal Amount of the Subordinate Certificates immediately
prior to such Distribution Date):

                  (i) the applicable Subordinate Percentage of the principal
                  portion of all Scheduled 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

                                      -33-

<PAGE>

                  any adjustment to such amortization schedule by reason of
                  any bankruptcy or similar proceeding or any moratorium or
                  similar waiver or grace period);

                  (ii) the applicable Subordinate Prepayment Percentage of the
                  Scheduled Principal Balance of each Mortgage Loan in the
                  related Loan Group that was the subject of a Principal
                  Prepayment in full received by the Master Servicer during the
                  related Prepayment Period;

                  (iii) the applicable Subordinate Prepayment Percentage of each
                  Principal Prepayment in part received during the related
                  Prepayment Period with respect to each Mortgage Loan in the
                  related Loan Group;

                  (iv) the excess, if any, of (a) all Net Liquidation Proceeds
                  allocable to principal received during the related Prepayment
                  Period in respect of each Liquidated Mortgage Loan in the
                  related Loan Group over (b) the sum of the amounts
                  distributable to the related Senior Certificateholders
                  pursuant to clause (iv) of the related definition of Senior
                  Optimal Principal Amount on such Distribution Date;

                  (v) the applicable Subordinate Prepayment Percentage of the
                  sum of (a) the Scheduled Principal Balance of each Mortgage
                  Loan in the related Loan Group which was purchased with
                  respect to such Distribution Date and (b) the difference, if
                  any, between 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 the Mortgage Loan Purchase Agreement in connection with
                  such Distribution Date over the Scheduled Principal Balance of
                  such Substitute Mortgage Loan; and

                  (vi) on the Distribution Date on which the Current Principal
                  Amounts of the Group 1 Senior Certificates (other than the
                  Interest Only Certificates), Group 2 Senior Certificates
                  (other than the Interest Only Certifictes), Group 3 Senior
                  Certificates (other than the Interest Only Certifictes) or
                  Group 4 Senior Certificates have all been reduced to zero,
                  100% of the related Senior Optimal Principal Amount. After the
                  aggregate Current Principal Amount of the Subordinate
                  Certificates has been reduced to zero, the Subordinate Optimal
                  Principal Amount shall be zero.

         SUBORDINATE PERCENTAGE: The Group 1, Group 2, Group 3 or Group 4
Subordinate Percentage, with respect to the Group 1, Group 2, Group 3 or Group 4
Mortgage Loans, respectively.

         SUBORDINATE PREPAYMENT PERCENTAGE: The Group 1, Group 2, Group 3 or
Group 4 Subordinate Prepayment Percentage, with respect to the Group 1, Group 2,
Group 3 or Group 4 Mortgage Loans, respectively.

         SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee
pursuant to the related Servicing Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, in each case, (i)
which has an Outstanding Principal Balance not greater nor materially less than
the Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage
Interest Rate and Net Rate not less than, and not materially greater than, such
Mortgage Loan; (iii) which has a

                                      -34-

<PAGE>

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

         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.

         TERMINATION PURCHASE PRICE: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.

         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: JPMorgan Chase Bank, or its successor in interest, or any
successor trustee appointed as herein provided.

         UNCERTIFICATED PRINCIPAL BALANCE: With respect to any REMIC I Regular
Interest or REMIC II Regular Interest as of any Distribution Date, the initial
principal amount of such Regular Interest, reduced by (i) all amounts
distributed on previous Distribution Dates on such Regular Interest with respect
to principal, (ii) the principal portion of all Realized Losses allocated prior
to such Distribution Date to such Regular Interest, taking account of the Loss
Allocation Limitation and (iii) in the case of a REMIC II Regular Interest for
which the Corresponding Class is a Subordinate Certificate, such Regular
Interest's pro rata share, if any, of the applicable Subordinate Certificate
Writedown Amount allocated to such Corresponding Class for previous Distribution
Dates.

         UNDERLYING SELLER: With respect to each Mortgage Loan, WFHM, GMAC, Bank
of America, US Bank, Chevy Chase, Countrywide, Cendant, WMBFA, E*TRADE, or
E-LOAN, as indicated on the Mortgage Loan Schedule.

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

         UNITED STATES PERSON: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created 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,

                                      -35-

<PAGE>

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.

         US BANK: U.S. Bank Home Mortgage, or its successor in interest.

         US BANK SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement, dated as of March 1, 2003, between EMC and US Bank, which is attached
hereto as Exhibit H-7.

         WFHM: Wells Fargo Home Mortgage, Inc., or its successor in interest.

         WFHM SERVICING AGREEMENTS: The (i) Seller's Warranties and Servicing
Agreement, dated as of November 1, 2002 (WFHM 2002-W81), (ii) Seller's
Warranties and Servicing Agreement, dated as of January 1, 2003 (WFHM 2003-W07),
(iii) Seller's Warranties and Servicing Agreement, dated as of February 1, 2003
(WFHM 2003-W16) and (iv) Master Seller's Warranties and Servicing Agreement,
dated as of April 1, 2003, in each case, between EMC and WFHM, each of which is
attached hereto as Exhibit H-8.

         WMBFA: Washington Mutual Bank, FA, or its successor in interest.

         WMBFA SERVICING AGREEMENT: The Servicing Agreement, dated as of April
1, 2001, between EMC and WMBFA, which is attached hereto as Exhibit H-9.

                                      -36-

<PAGE>

                                   ARTICLE II
                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates

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

         (b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Trustee or the Custodian, as its agent, with respect to
(I) each Mortgage Loan (other than a Cooperative Loan):

                  (i) the original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements from the
original payee thereof to the Person endorsing it to the Trustee, or lost note
affidavit together with a copy of the related Mortgage Note,

                  (ii) the original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the original
is not available, a copy), with evidence of such recording indicated thereon (or
if clause (x) in the proviso below applies, shall be in recordable form),

                   (iii) unless the Mortgage Loan is a MOM Loan, 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
"JPMorgan Chase Bank, 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),

                                      -37-

<PAGE>

                  (iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Seller with evidence of
recording thereon, (v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any, (vi) the
original policy of title insurance or mortgagee's certificate of title insurance
or commitment or binder for title insurance and (vii) originals of all
modification agreements, if applicable and available;

and (II) with respect to each Cooperative Loan so assigned:

                  (i) The original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or lost note
affidavit, together with a copy of the related Mortgage Note;

                  (ii) A counterpart of the Cooperative Lease and the Assignment
of Proprietary Lease to the originator of the Cooperative Loan with intervening
assignments showing an unbroken chain of title from such originator to the
Trustee;

                  (iii) The related Cooperative Stock Certificate, representing
the related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument) executed in
blank;

                  (iv) The original recognition agreement by the Cooperative of
the interests of the mortgagee with respect to the related Cooperative Loan;

                  (v) The Security Agreement;

                  (vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative Loan as
secured party, each with evidence of recording thereof, evidencing the interest
of the originator under the Security Agreement and the Assignment of Proprietary
Lease;

                  (vii) Copies of the filed UCC-3 assignments of the security
interest referenced in clause (vi) above showing an unbroken chain of title from
the originator to the Trustee, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement and the
Assignment of Proprietary Lease;

                  (viii) An executed assignment of the interest of the
originator in the Security Agreement, Assignment of Proprietary Lease and the
recognition agreement referenced in clause (iv) above, showing an unbroken chain
of title from the originator to the Trustee; and

                  (ix) The original of each modification, assumption agreement
or preferred loan agreement, if any, relating to such Cooperative Loan;

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

                                      -38-

<PAGE>

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 Seller, and between the Seller and the Trustee; and
provided, further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-off Date and prior to the Closing Date, the
Seller, in lieu of delivering the above documents, may deliver to the Trustee or
the Custodian, as its agent, a certification to such effect and shall deposit
all amounts paid in respect of such Mortgage Loans in the Master Servicer
Collection Account on the Closing Date. The Seller shall deliver such original
documents (including any original documents as to which certified copies had
previously been delivered) to the Trustee or the Custodian, as its agent,
promptly after they are received. The Seller shall cause, at its expense, the
assignment of the Security Instrument to the Trustee to be recorded not later
than 180 days after the Closing Date, unless (a) such recordation is not
required by the Rating Agencies or an Opinion of Counsel addressed to the
Trustee 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 or (b)
MERS is identified on the Mortgage or on a properly recorded assignment of the
Mortgage as the mortgagee of record solely as nominee for Seller and its
successor and assigns; 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.

         (c) The Seller hereby assigns to the Trustee its security interest in
and to any Additional Collateral, its right to receive amounts due or to become
due in respect of any Additional Collateral pursuant to the related Servicing
Agreement.

         Section 2.02 ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust Fund to it by the
Seller and receipt of, subject to further review and the exceptions which may be
noted pursuant to the procedures described below, and declares that it holds,
the documents (or certified copies thereof) delivered to it pursuant to Section
2.01, and declares that it will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it as Trustee in trust for the use and benefit of all
present and future Holders of the Certificates. On the Closing Date, the

                                      -39-

<PAGE>

Custodian, with respect to the Mortgage Loans, shall acknowledge with respect to
each Mortgage Loan by delivery to the Seller and the Trustee of an Initial
Certification 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, 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 Trustee an Interim Certification.
In conducting such review, the Trustee or Custodian will ascertain whether all
required documents have been executed and received, and based on the Mortgage
Loan Schedule, whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans it has received, as identified in the Mortgage Loan Schedule. In
performing any such review, the Trustee or the Custodian, as its agent, may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Trustee or the Custodian, as its agent, finds any document constituting part of
the Mortgage File not to have been executed or received, or to be unrelated to
the Mortgage Loans identified in Exhibit B or to appear to be defective on its
face, the Trustee or the Custodian, as its agent, shall promptly notify the
Mortgage Loan Seller. In accordance with the Mortgage Loan Purchase Agreement,
the Mortgage Loan Seller shall correct or cure any such defect within ninety
(90) days from the date of notice from the Trustee or the Custodian, as its
agent, of the defect and if the Mortgage Loan Seller fails to correct or cure
the defect within such period, and such defect materially and adversely affects
the interests of the Certificateholders in the related Mortgage Loan, the
Trustee or the Custodian, as its agent, shall enforce the Mortgage Loan Seller's
obligation pursuant to the Mortgage Loan Purchase Agreement, within 90 days from
the Trustee's or the Custodian's notification, to purchase such Mortgage Loan at
the Repurchase Price; provided that, if such defect would cause the Mortgage
Loan to be other than a "qualified mortgage" as defined in Section 860G(a)(3) of
the Code, any such cure or repurchase must occur within 90 days from the date
such breach was discovered; provided, however, that if such defect relates
solely to the inability of the Mortgage Loan Seller to deliver the original
Security Instrument or intervening assignments thereof, or a certified copy
because the originals of such documents, or a certified copy have not been
returned by the applicable jurisdiction, the Mortgage Loan Seller shall not be
required to purchase such Mortgage Loan if the Mortgage Loan Seller delivers
such original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date. The foregoing repurchase obligation
shall not apply in the event that the Mortgage Loan Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the applicable jurisdiction because such document has not
been returned by such office; provided that the Mortgage Loan Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Mortgage Loan Seller within thirty days of its
receipt of the original recorded document.
         (b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Seller and the Trustee a Final Certification. In
conducting such review, the Trustee or the Custodian, as its agent, will
ascertain

                                      -40-

<PAGE>

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 (a "Material
Defect"), 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 subsections (I)(b)(iv), (v) and (vii) of Section 2.01 and
subsection (II)(ix) of Section 2.01, the Trustee's obligations shall extend only
to the documents actually delivered pursuant to such subsections). In accordance
with the Mortgage Loan Purchase Agreement, the Mortgage Loan Seller shall
correct or cure any such defect within 90 days from the date of notice from the
Trustee or the Custodian, as its agent, of the Material 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
provide a Substitute Mortgage Loan (if within two years of the Closing Date) or
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, repurchase or
substitution must occur within 90 days from the date such breach was discovered,
provided, however, that if such defect relates solely to the inability of the
Mortgage Loan Seller to deliver the original Security Instrument or intervening
assignments thereof, or a certified copy, because the originals of such
documents or a certified copy, have not been returned by the applicable
jurisdiction, the Mortgage Loan Seller shall not be required to purchase such
Mortgage Loan, if the Mortgage Loan Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date. The foregoing repurchase obligation shall not apply in the
event that the Mortgage Loan Seller cannot deliver such original or copy of any
document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that the Mortgage Loan Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate confirming that such documents have been accepted for recording, and
delivery to the Trustee or the Custodian, as its agent, shall be effected by the
Mortgage Loan Seller within thirty days of its receipt of the original recorded
document.

         (c) In the event that a Mortgage Loan is purchased by the Mortgage Loan
Seller in accordance with Subsections 2.02(a) or (b) above, the Mortgage Loan
Seller shall remit to the Master Servicer the Repurchase Price for deposit in
the Master Servicer Collection Account and the Mortgage Loan Seller shall
provide to the Trustee written notification detailing the components of the
Repurchase Price. Upon deposit of the Repurchase Price in the Master Servicer
Collection Account, the Seller shall notify the Trustee and the Trustee or the
Custodian, as its agent (upon receipt of a Request for Release in the form of
Exhibit D attached hereto with respect to such Mortgage Loan), shall release to
the Mortgage Loan Seller the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment, without recourse,
representation or warranty, furnished to it by the Mortgage Loan Seller, as are
necessary to vest in the Mortgage Loan Seller title to and rights under the
Mortgage Loan. Such purchase shall be deemed to have occurred on the date on
which the Repurchase Price in available funds is received by the Trustee. The
Trustee shall amend the Mortgage Loan Schedule, which was previously delivered
to it by Seller

                                      -41-

<PAGE>

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, including but not limited to the Seller's rights and
obligations pursuant to the Servicing Agreements (noting that the Mortgage Loan
Seller has retained the right in the event of breach of the representations,
warranties and covenants, if any, with respect to the related Mortgage Loans of
the related Servicer under the related Servicing Agreement to enforce the
provisions thereof and to seek all or any available remedies). The obligations
of the Mortgage Loan Seller to substitute or repurchase, as applicable, a
Mortgage Loan shall be the Trustee's and the Certificateholders' sole remedy for
any breach thereof. At the request of the Trustee, the Seller shall take such
actions as may be necessary to enforce the above right, title and interest on
behalf of the Trustee and the Certificateholders or shall execute such further
documents as the Trustee may reasonably require in order to enable the Trustee
to carry out such enforcement.

         (b) If the Seller, the Securities Administrator or the Trustee
discovers a breach of any of the representations and warranties set forth in the
Mortgage Loan Purchase Agreement, which breach materially and adversely affects
the value of the interests of Certificateholders or the Trustee in the related
Mortgage Loan, the party discovering the breach shall give prompt written notice
of the breach to the other parties. The Mortgage Loan Seller, within 90 days of
its discovery or receipt of notice that such breach has occurred (whichever
occurs earlier), shall cure the breach in all material respects or, subject to
the Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, shall purchase the Mortgage Loan or any property acquired with
respect thereto from the Trustee; provided, however, that if there is a breach
of any representation set forth in the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, and the Mortgage Loan or the
related property acquired with respect thereto has been sold, then the Mortgage
Loan Seller shall pay, in lieu of the Repurchase Price, any excess of the
Repurchase Price over the Net Liquidation Proceeds received upon such sale. (If
the Net Liquidation Proceeds exceed the Repurchase Price, any excess shall be
paid to the Mortgage Loan Seller to the extent not required by law to be paid to
the borrower.) Any such purchase by the Mortgage Loan Seller shall be made by
providing an amount equal to the Repurchase Price to the Master Servicer for
deposit in the Master Servicer Collection Account and written notification
detailing the components of such Repurchase Price. The Seller shall notify the
Trustee and submit to the Trustee or the Custodian, as its agent, a Request for
Release, and the Trustee shall release, or the Trustee shall cause the Custodian
to release, to the Mortgage Loan Seller the related Mortgage File and the
Trustee shall execute and deliver all instruments of transfer or assignment
furnished to it by the Mortgage Loan Seller, without recourse, representation or
warranty 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 Master
Servicer shall amend the Mortgage Loan Schedule to reflect such repurchase and
shall promptly notify the Trustee and the Rating Agencies of such amendment.
Enforcement of the obligation of the Mortgage Loan Seller to purchase (or
substitute

                                      -42-

<PAGE>

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 Sections 2.02 or 2.03 of
this Agreement, the Mortgage Loan Seller may, no later than the date by which
such purchase by the Mortgage Loan Seller would otherwise be required, tender to
the Trustee a Substitute Mortgage Loan accompanied by a certificate of an
authorized officer of the Mortgage Loan Seller that such Substitute Mortgage
Loan conforms to the requirements set forth in the definition of "Substitute
Mortgage Loan" in the Mortgage Loan Purchase Agreement or this Agreement, as
applicable; provided, however, that substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, in lieu of
purchase shall not be permitted after the termination of the two-year period
beginning on the Startup Day; provided, further, that if the breach would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or substitution must occur within 90 days
from the date the breach was discovered. The Trustee or the Custodian, as its
agent, shall examine the Mortgage File for any Substitute Mortgage Loan in the
manner set forth in Section 2.02(a) and the Trustee or the Custodian, as its
agent, shall notify the Mortgage Loan Seller, in writing, within five Business
Days after receipt, whether or not the documents relating to the Substitute
Mortgage Loan satisfy the requirements of the fourth sentence of Subsection
2.02(a). Within two Business Days after such notification, the Mortgage Loan
Seller shall provide to the Trustee for deposit in the Distribution Account the
amount, if any, by which the Outstanding Principal Balance as of the next
preceding Due Date of the Mortgage Loan for which substitution is being made,
after giving effect to the Scheduled Principal due on such date, exceeds the
Outstanding Principal Balance as of such date of the Substitute Mortgage Loan,
after giving effect to Scheduled Principal due on such date, which amount shall
be treated for the purposes of this Agreement as if it were the payment by the
Mortgage Loan Seller of the Repurchase Price for the purchase of a Mortgage Loan
by the Mortgage Loan Seller. After such notification to the Mortgage Loan Seller
and, if any such excess exists, upon receipt of such deposit, the Trustee shall
accept such Substitute Mortgage Loan which shall thereafter be deemed to be a
Mortgage Loan hereunder. In the event of such a substitution, accrued interest
on the Substitute Mortgage Loan for the month in which the substitution occurs
and any Principal Prepayments made thereon during such month shall be the
property of the Trust Fund and accrued interest for such month on the Mortgage
Loan for which the substitution is made and any Principal Prepayments made
thereon during such month shall be the property of the Mortgage Loan Seller. The
Scheduled Principal on a Substitute Mortgage Loan due on the Due Date in the
month of substitution shall be the property of the Mortgage Loan Seller and the
Scheduled Principal on the Mortgage Loan for which the substitution is made due
on such Due Date shall be the property of the Trust Fund. Upon acceptance of the
Substitute Mortgage Loan (and delivery to the Trustee or Custodian of a Request
for Release for such Mortgage Loan), the Trustee shall release to the Mortgage
Loan Seller the related Mortgage File related to any Mortgage Loan released
pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, and shall execute and deliver all instruments of
transfer or assignment, without recourse, representation or warranty 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

                                      -43-

<PAGE>

Agreement or Section 2.04 of this Agreement, as applicable. The Mortgage Loan
Seller shall deliver the documents related to the Substitute Mortgage Loan in
accordance with the provisions of the Mortgage Loan Purchase Agreement or
Subsections 2.01(b) and 2.02(b) of this Agreement, as applicable, with the date
of acceptance of the Substitute Mortgage Loan deemed to be the Closing Date for
purposes of the time periods set forth in those Subsections. The representations
and warranties set forth in the Mortgage Loan Purchase Agreement shall be deemed
to have been made by the Mortgage Loan Seller with respect to each Substitute
Mortgage Loan as of the date of acceptance of such Mortgage Loan by the Trustee.
The Master Servicer shall amend the Mortgage Loan Schedule to reflect such
substitution and shall provide a copy of such amended Mortgage Loan Schedule to
the Trustee and the Rating Agencies.

         Section 2.05      ISSUANCE OF CERTIFICATES.

         (a) 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.

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

         (c) 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 Certificates. 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 III
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;

                                      -44-

<PAGE>

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

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

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

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

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

                  (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.

                                      -45-

<PAGE>

                                   ARTICLE III
                 Administration and Servicing of Mortgage Loans

         Section 3.01 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreements 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 its applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers to the Protected Account
pursuant to the applicable Servicing Agreements.

         Notwithstanding anything in this Agreement to the contrary, with
respect to any Mortgage Loan secured by any Additional Collateral, the Master
Servicer shall have no duty or obligation to supervise, monitor or oversee the
activities of Cendant (or any successor thereto) under any Cendant Servicing
Agreements with respect to any Additional Collateral (unless the Master Servicer
shall have assumed the obligations of Cendant (or any successor thereto)as
successor Servicer under any Cendant Servicing Agreement pursuant to Section
3.03 of this Agreement, in which event, as successor Servicer, it will service
and administer the Additional Collateral in accordance with the provisions of
the Cendant Servicing Agreements.

         The Trustee shall furnish the Servicers and the Master Servicer with
any powers of attorney and other documents in form as provided to it necessary
or appropriate to enable the Servicers and the Master Servicer to service and
administer the related Mortgage Loans and REO Property.

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

                                      -46-

<PAGE>

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

         Section 3.02 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Seller, the related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion addressed
to the Trustee 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 addressed to the
Trustee .

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

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

                                      -47-

<PAGE>

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

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

         (e) The Master Servicer shall use its best efforts to cause each
Servicer of a Cooperative Loan to timely file continuation statements with
regard to each financing statement and assignment relating to Cooperative Loans
as to which the related Cooperative Apartment is located outside of the State of
New York.

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

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

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

                                      -48-

<PAGE>

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

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

         Section 3.07 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
the Servicer will, if required under the applicable Servicing Agreement,
promptly furnish to the Custodian, on behalf of the Trustee, two copies of a
certification substantially in the form of Exhibit D hereto signed by a
Servicing Officer or in a mutually agreeable electronic format which will, in
lieu of a signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
Protected Account maintained by the applicable Servicer pursuant to Section 4.01
or by the applicable Servicer pursuant to its Servicing Agreement have been or
will be so deposited) and shall request that the Custodian, on behalf of the
Trustee, deliver to the applicable Servicer the related Mortgage File. Upon
receipt of such certification and request, the Custodian, on behalf of the
Trustee, shall promptly release the related Mortgage File to the

                                      -49-

<PAGE>

applicable Servicer and the Trustee and Custodian shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in full,
each Servicer is authorized, to give, as agent for the Trustee, as the mortgagee
under the Mortgage that secured the Mortgage Loan, an instrument of satisfaction
(or assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Protected Account.

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

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

         (a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the applicable Servicing Agreement) shall cause each Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request
and during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift

                                      -50-

<PAGE>

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 each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.

         Section 3.09    STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.

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

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

         Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured's claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to a Servicer and remitted to the Master Servicer) in respect of such policies,
bonds or contracts shall be promptly deposited in the Master Servicer Collection
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of

                                      -51-

<PAGE>

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

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

                                      -52-

<PAGE>

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

         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 and the Master Servicer
Collection Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be deposited in the Protected Account. The Master Servicer 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 applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

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

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

         (d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the

                                      -53-

<PAGE>

applicable Servicer as provided above shall be deposited in the Protected
Account on or prior to the Determination Date in the month following receipt
thereof and be remitted by wire transfer in immediately available funds to the
Master Servicer for deposit into the related Master Servicer Collection Account
on the next succeeding 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 March 1 of each year, commencing on March 1, 2004, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that any Servicer has failed
to perform any of its duties, responsibilities and obligations under its
Servicing Agreement in 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 March 1 of each year, commencing on March 1, 2004 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

                                      -54-

<PAGE>

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 make available a copy of the monthly
statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30 in each year, 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 (i) March 15, 2004 and (ii) unless and until a Form 15 Suspension Notice
shall have been filed, prior to March 15 of each year thereafter, the Master
Servicer shall provide the Securities Administrator with a Master Servicer
Certification, together with a copy of the annual independent accountant's
servicing report and annual statement of compliance of each Servicer, in each
case, required to be delivered pursuant to the related Servicing Agreement, and,
if applicable, the annual independent accountant's servicing report and annual
statement of compliance to be delivered by the Master Servicer pursuant to
Sections 3.16 and 3.17. Prior to (i) March 31, 2004, or such earlier filing date
as may be required by the Commission, and (ii) unless and until a Form 15
Suspension Notice shall have been filed, March 31 of each year thereafter, or
such earlier filing date as may be required by the Commission, the Securities
Administrator shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust. Such Form 10-K shall include the Master
Servicer Certification and other documentation provided by the Master Servicer
pursuant to the second preceding sentence. The Seller hereby grants to the
Securities Administrator a limited power of attorney to execute and file each
such document on behalf of the Seller. Such power of attorney shall continue
until either the earlier of (i) receipt by the Securities Administrator from the
Seller of written termination of such power of attorney and (ii) the termination
of the Trust Fund. The Seller agrees to promptly furnish to the Securities
Administrator, from time to time upon request, such further information, reports
and financial statements within its control related to this Agreement and the
Mortgage Loans as the Securities Administrator reasonably deems appropriate 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"). 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.

                                      -55-

<PAGE>

         Section 3.20 UCC. The Seller shall inform the Trustee in writing of any
Uniform Commercial Code financing statements that were filed on the Closing Date
in connection with the Trust with stamped recorded copies of such financing
statements to be delivered to the Trustee promptly upon receipt by the Seller.
The Trustee agrees to monitor and notify the Seller if any continuation
statements for such Uniform Commercial Code financing statements need to be
filed. If directed by the Seller in writing, the Trustee will file any such
continuation statements solely at the expense of the Seller. 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.

         (a) 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.

         (b) If at any time EMC remits to the Master Servicer a payment for
deposit in the Master Servicer Collection Account covering the amount of the
Repurchase Price for such a Mortgage Loan, and EMC provides to the Trustee a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Master Servicer Collection Account, then the
Trustee shall execute the assignment of such Mortgage Loan to EMC at the request
of EMC without recourse, representation or warranty and EMC shall succeed to all
of 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.

                                      -56-

<PAGE>

                                   ARTICLE IV
                                    Accounts

         Section 4.01 PROTECTED ACCOUNTS. (a) The Master Servicer shall enforce
the obligation of each Servicer to establish and maintain a Protected Account in
accordance with the applicable Servicing Agreement, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within 48 hours (or as of such other time specified in the
related Servicing Agreement) of receipt, all collections of principal and
interest on any Mortgage Loan and any REO Property received by a Servicer,
including Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and
advances made from the Servicer's own funds (less servicing compensation as
permitted by the applicable Servicing Agreement in the case of any Servicer) and
all other amounts to be deposited in the Protected Account. The Servicer is
hereby authorized to make withdrawals from and deposits to the related Protected
Account for purposes required or permitted by this Agreement. To the extent
provided in the related Servicing Agreement, the Protected Account shall be held
by 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 shall mature, or shall be subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the Master Servicer Collection Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the related
Servicer under the applicable Servicing Agreement, and the risk of loss of
moneys required to be distributed to the Certificateholders resulting from such
investments shall be borne by and be the risk of the related Servicer. The
related Servicer (to the extent provided in the Servicing Agreement) shall
deposit the amount of any such loss in the Protected Account within two Business
Days of receipt of notification of such loss but not later than the second
Business Day prior to the Distribution Date on which the moneys so invested are
required to be distributed to the Certificateholders.

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

                  (i) Scheduled Payments on the Mortgage Loans received or any
         related portion thereof advanced by such Servicer pursuant to its
         Servicing Agreement which were due on or before the related Due Date,
         net of the amount thereof comprising its Servicing Fee or any fees with
         respect to any lender-paid primary mortgage insurance policy;

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

                                      -57-

<PAGE>

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

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

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

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

         Section 4.02 MASTER SERVICER COLLECTION ACCOUNT. (a) The Master
Servicer shall establish and maintain in the name of the Trustee, for the
benefit of the Certificateholders, the Master Servicer Collection Account as a
segregated trust account or accounts. The Master Servicer Collection Account
shall be an Eligible Account. The Master Servicer will deposit in the Master
Servicer Collection Account as identified by the Master Servicer and as received
by the Master Servicer, the following amounts:

                  (i) Any amounts withdrawn from a Protected Account;

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

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

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

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

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

                                      -58-

<PAGE>

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

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

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

         (b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any expenses recoverable by the Trustee,
the Master Servicer or the Securities Administrator or the Custodian pursuant to
Sections 3.03, 7.04 and 9.05 and (ii) any amounts payable to the Master Servicer
as set forth in Section 3.14.

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

                                      -59-

<PAGE>

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

         Section 4.04 DISTRIBUTION ACCOUNT. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Distribution Account as a segregated trust account or accounts.
         (b) All amounts deposited to the Distribution Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.

         (c) The Distribution Account shall constitute a trust account of the
Trust Fund segregated on the books of the Trustee and held by the Trustee in
trust in its Corporate Trust Office, and the Distribution Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee or
the Master Servicer (whether made directly, or indirectly through a liquidator
or receiver of the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) held in cash and fully insured by the FDIC to
the maximum coverage provided thereby or (ii) invested in the name of the
Trustee, in such Permitted Investments selected by the Master Servicer or
deposited in demand deposits with such depository institutions as selected by
the Master Servicer, provided that time deposits of such depository institutions
would be a Permitted Investment. All Permitted Investments shall mature or be
subject to redemption or withdrawal on or before, and shall be held until, the
next succeeding Distribution Date if the obligor for such Permitted Investment
is the Trustee or, if such obligor is any other Person, the Business Day
preceding such Distribution Date. All investment earnings on amounts on deposit
in the Distribution Account or benefit from funds uninvested therein from time
to time shall be for the account of the Master Servicer. The Master Servicer
shall be permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Master Servicer shall
remit the amount of the loss to the Trustee who shall deposit such amount in the
Distribution Account. With respect to the Distribution Account and the funds
deposited therein, the Master Servicer shall take such action as may be
necessary to ensure that the Certificateholders shall be entitled to the
priorities afforded to such a trust account (in addition to a claim against the
estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e), and applicable
regulations pursuant thereto, if applicable, or any applicable comparable state
statute applicable to state chartered banking corporations.

                                      -60-

<PAGE>

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

                  (i) to reimburse the Master Servicer or any Servicer for any
         Monthly Advance of its own funds, 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 was made;

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

                  (iii) to reimburse the Master Servicer or any Servicer from
         Insurance Proceeds relating to a particular Mortgage Loan for insured
         expenses incurred with respect to such Mortgage Loan and to reimburse
         the Master Servicer or such Servicer from Liquidation Proceeds from a
         particular Mortgage Loan for Liquidation Expenses incurred with respect
         to such Mortgage Loan; provided that the Master Servicer shall not be
         entitled to reimbursement for Liquidation Expenses with respect to a
         Mortgage Loan to the extent that (i) any amounts with respect to such
         Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to
         clause (xi) of this Subsection 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 any Servicer, as
         appropriate, from Liquidation Proceeds or Insurance Proceeds received
         in connection with the liquidation of any Mortgage Loan, the amount
         which it or such Servicer would have been entitled to receive under
         subclause (ix) of this Subsection 4.03(a) as servicing compensation on
         account of each defaulted scheduled payment on such Mortgage Loan if
         paid in a timely manner by the related Mortgagor;

                  (v) to pay the Master Servicer or any Servicer from the
         Repurchase Price for any Mortgage Loan, the amount which it or such
         Servicer would have been entitled to receive under subclause (ix) of
         this Subsection 4.03 (a) as servicing compensation;

                  (vi) to reimburse the Master Servicer or any Servicer for
         advances of funds (other than Monthly Advances) made with respect to
         the Mortgage Loans, and the right to reimbursement pursuant to this
         subclause being limited to amounts received on the related

                                      -61-

<PAGE>

         Mortgage Loan (including, for this purpose, the Repurchase Price
         therefor, Insurance Proceeds and Liquidation Proceeds) which represent
         late recoveries of the payments for which such advances were made;

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

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

                  (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 related Servicer;

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

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

                  (xiii) to remove amounts deposited in error; and

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

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

         (c) On each Distribution Date, the Trustee shall distribute the
Available Funds to the extent on deposit in the Distribution Account for each
Loan Group to the Holders of the Certificates in accordance with distribution
instructions provided to it by the Securities Administrator no later than two
Business Days prior to such Distribution Date and determined by the Securities
Administrator in accordance with Section 6.01.

                                      -62-

<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 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 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.

                                      -63-

<PAGE>

         The REMIC I Regular Interests and the Class R-I Certificate will have
the following designations, initial balances and pass-through rates:

<TABLE>
<CAPTION>

REMIC I Interest            Initial Balance             Pass-Through Rate       Related Group
----------------            ---------------             -----------------       -------------
<S>                        <C>                          <C>                       <C>
    1A                     $           110.99                (1)                   Group 1
    1B                     $         3,761.98                (2)                   Group 1
    2A                     $           763.32                (1)                   Group 2
    2B                     $        25,875.05                (3)                   Group 2
    3A                     $         1,505.01                (1)                   Group 3
    3B                     $        51,017.27                (4)                   Group 3
    4A                     $           268.27                (1)                   Group 4
    4B                     $         9,093.80                (5)                   Group 4
   ZZZ                     $   897,388,513.30                (1)                   N/A
Class R-I                  $           100.00                (2)                   Group 1

</TABLE>

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

(1)      The weighted average of the Net Rates of the Mortgage Loans, weighted
         on the basis of the respective Scheduled Principal Balance of each such
         Mortgage Loan as of the beginning of the Due Period immediately
         preceding the related Distribution Date.

(2)      The weighted average of the Net Rates of the Group 1 Mortgage Loans,
         weighted on the basis of the respective Scheduled Principal Balance 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 Balance of
         each such Mortgage Loan as of the beginning of the Due Period
         immediately preceding the related Distribution Date.

(4)      The weighted average of the Net Rates of the Group 3 Mortgage Loans,
         weighted on the basis of the respective Scheduled Principal Balance of
         each such Mortgage Loan as of the beginning of the Due Period
         immediately preceding the related Distribution Date.

(5)      The weighted average of the Net Rates of the Group 4 Mortgage Loans,
         weighted on the basis of the respective Scheduled Principal Balance of
         each such Mortgage Loan as of the beginning of the Due Period
         immediately preceding the related Distribution Date.

         Distributions shall be deemed to be made to the REMIC I Regular
Interests first, so as to keep the Uncertificated Principal Balance of each
REMIC I Regular Interest ending with the designation "B" equal to 0.01% of the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Group; second, to each REMIC I Regular Interest ending with the designation "A,"
so that the Uncertificated Principal Balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Group over (y) the
Current Principal Amount of the Senior Certificate in the related Group (except
that if any such excess is a larger number than in the preceding distribution
period, the least amount of principal shall be distributed to such REMIC I
Regular Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining principal to REMIC I 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 I Regular Interest ending

                                      -64-

<PAGE>

with the designation "B" equal to 0.01% of the aggregate Scheduled Principal
Balance of the Mortgage Loans in the related Group; second, to each REMIC I
Regular Interest ending with the designation "A," so that the Uncertificated
Principal Balance of each such REMIC I Regular Interest is equal to 0.01% of the
excess of (x) the aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Group over (y) the Current Principal Amount of the Senior
Certificate in the related Group (except that if any such excess is a larger
number than in the preceding distribution period, the least amount of Realized
Losses shall be applied to such REMIC I Regular Interests such that the REMIC I
Subordinated Balance Ratio is maintained); and third, any remaining Realized
Losses shall be allocated to REMIC I Regular Interest ZZZ.

         (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 Certificate, which is hereby
designated as the single "residual interest" in REMIC II.

         The REMIC II Regular Interests and the Class R-II Certificate will have
the following designations, initial balances and pass-through rates:

<TABLE>
<CAPTION>

 REMIC II Interest       Initial Balance          Pass-Through Rate          Related Group
 -----------------       ---------------          -----------------          -------------
<S>                      <C>                      <C>                         <C>
      I-A-1              $     5,009,700.00                (1)                  Group 1
      I-A-2              $    31,500,000.00                (1)                  Group 1
      II-A-1             $    25,000,000.00                (2)                  Group 2
      II-A-2             $   141,000,000.00                (2)                  Group 2
      II-A-3             $    30,000,000.00                (2)                  Group 2
      II-A-4             $    55,117,300.00                (2)                  Group 2
     III-A-1             $   192,871,000.00                (3)                  Group 3
     III-A-2             $   149,500,000.00                (3)                  Group 3
     III-A-3             $   152,751,600.00                (3)                  Group 3
      IV-A-1             $    88,255,300.00                (4)                  Group 4
       B-1               $     8,974,800.00                (5)                    N/A
       B-2               $     7,179,900.00                (5)                    N/A
       B-3               $     4,936,100.00                (5)                    N/A
       B-4               $     2,243,700.00                (5)                    N/A
       B-5               $     1,346,300.00                (5)                    N/A
       B-6               $     1,795,108.00                (5)                    N/A
       MT-R              $            50.00                (1)                  Group 1
    Class R-II           $            50.00                (1)                  Group 1

</TABLE>

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

(1)      The weighted average of the Net Rates of the Group 1 Mortgage Loans,
         weighted on the basis of the respective Scheduled Principal Balance of
         each such Mortgage Loan as of the beginning of the Due Period
         immediately preceding the related Distribution Date.

                                                       -65-

<PAGE>

(2)      The weighted average of the Net Rates of the Group 2 Mortgage Loans,
         weighted on the basis of the respective Scheduled Principal Balance 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 3 Mortgage Loans,
         weighted on the basis of the respective Scheduled Principal Balance of
         each such Mortgage Loan as of the beginning of the Due Period
         immediately preceding the related Distribution Date.

(4)      The weighted average of the Net Rates of the Group 4 Mortgage Loans,
         weighted on the basis of the respective Scheduled Principal Balance of
         each such Mortgage Loan as of the beginning of the Due Period
         immediately preceding the related Distribution Date.

(5)      A variable Pass-Through Rate equal to the weighted average of the
         Pass-Through Rates on REMIC I Regular Interests 1A, 2A, 3A and 4A,
         weighted on the basis of the Uncertificated Principal Balance of each
         such REMIC I Regular Interest immediately preceding the related
         Distribution Date, provided that for purposes of such weighted average,
         the Pass-Through Rate of each such REMIC I Regular Interest shall be
         subject to a cap and a floor equal to the Pass-Through Rate of the
         REMIC I Regular Interest from the related Group ending with the
         designation "B".

         Principal shall be payable to, and shortfalls, losses and prepayments
are allocable to, the REMIC II Regular Interests as such amounts are payable and
allocable to the Corresponding Certificates. Interest shall be payable to the
REMIC II Regular Interests at the Pass-Through Rate for each such REMIC II
Regular Interest on each such REMIC II Regular Interest's balance.

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

<TABLE>
<CAPTION>

                               Initial Principal/
  Designation                    Notional Amount            Pass-Through Rate
  -----------                    ---------------            -----------------
<S>                            <C>                           <C>
     I-A-1                      $    5,009,700                    (1)
    I-X-A-1                                (2)                    (3)
     I-A-2                      $   31,500,000                    (4)
     II-A-1                     $   25,000,000                    (5)
    II-X-A-1                               (2)                    (6)
     II-A-2                     $  141,000,000                    (7)
    II-X-A-2                               (2)                    (8)
     II-A-3                     $   30,000,000                    (9)
    II-X-A-3                               (2)                    (10)
     II-A-4                     $   55,117,300                    (11)
    II-X-A-4                               (2)                    (12)
    III-A-1                     $  192,871,000                    (13)
    III-A-2                     $  149,500,000                    (14)
   III-X-A-2                               (2)                    (15)
    III-A-3                     $  152,751,600                    (16)
   III-X-A-3                               (2)                    (17)
     IV-A-1                     $   88,255,300                    (18)
      R-I                       $          100                    (19)
      R-II                      $           50                    (19)
     R-III                      $           50                    (19)

                                      -66-

<PAGE>

      B-1                       $    8,974,800                    (20)
      B-2                       $    7,179,900                    (20)
      B-3                       $    4,936,100                    (20)
      B-4                       $    2,243,700                    (20)
      B-5                       $    1,346,300                    (20)
      B-6                       $    1,795,108                    (20)
</TABLE>

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

         (1) On or prior to the Distribution Date in November 2005, the Class
I-A-1 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, minus 0.871%; provided that, on such Distribution Dates, for
federal income tax purposes the Class I-A-1 Certificates will bear interest at a
rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest I-A-1, weighted on the basis of
the Uncertificated Principal balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date minus 0.871%. After the
Distribution Date in November 2005, the Class 1-A-1 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
that on such Distribution Dates, for federal income tax purposes the Class I-A-1
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rate on REMIC II Regular Interest
I-A-1, weighted on the basis of the Uncertificated Principal balance of such
REMIC II 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 3.668% per annum.

         (2) As described in the definition of Notional Amount herein.

         (3) On or prior to the Distribution Date in November 2005, the Class
I-X-A-1 Certificates will bear interest at a pass-through rate equal to 0.871%
per annum. After the Distribution Date in November 2005, the Class I-X-A-1
Certificates will not bear any interest.

         (4) The Class I-A-2 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 that, on such
Distribution Dates, for federal income tax purposes the Class I-A-2 Certificates
will bear interest at a rate equivalent to the foregoing, expressed as the
weighted average of the Pass-Through Rate on REMIC II Regular Interest I-A-2,
weighted on the basis of the Uncertificated Principal Balance of such REMIC II
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 4.539% per annum.

         (5) On or prior to the Distribution Date in December 2007, the Class
II-A-1 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, minus 0.843%; provided that, on such Distribution Dates, for
federal income tax purposes the Class II-A-1 Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest II-A-1, weighted on the basis of
the Uncertificated Principal balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date minus 0.843%. After the
Distribution Date in December 2007, the Class II-A-1 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
that on such Distribution Dates, for federal income tax purposes the Class
II-A-1 Certificates will bear interest at a rate equivalent to the foregoing,
expressed as the weighted average of the Pass-Through Rate on REMIC II Regular
Interest II-A-1, weighted on the basis of the Uncertificated Principal balance
of such REMIC II Regular Interest immediately preceding the related

                                      -67-

<PAGE>

Distribution Date. The pass-through rate with respect to the first Interest
Accrual Period is expected to be approximately 4.320% per annum.

         (6) On or prior to the Distribution Date in December 2007, the Class
II-X-A-1 Certificates will bear interest at a pass-through rate equal to 0.843%
per annum. After the Distribution Date in December 2007, the Class II-X- A-1
Certificates will not bear any interest.

         (7) On or prior to the Distribution Date in December 2007, the Class
II-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, minus 0.913%; provided that, on such Distribution Dates, for
federal income tax purposes the Class II-A-2 Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest II-A-2, weighted on the basis of
the Uncertificated Principal balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date minus 0.913%. After the
Distribution Date in December 2007, the Class II-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
that on such Distribution Dates, for federal income tax purposes the Class
II-A-2 Certificates will bear interest at a rate equivalent to the foregoing,
expressed as the weighted average of the Pass-Through Rate on REMIC II Regular
Interest II-A-2, weighted on the basis of the Uncertificated Principal balance
of such REMIC II 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 4.250% per annum.

         (8) On or prior to the Distribution Date in December 2007, the Class
II-X-A-2 Certificates will bear interest at a pass-through rate equal to 0.913%
per annum. After the Distribution Date in December 2007, the Class II-X- A-2
Certificates will not bear any interest.

         (9) On or prior to the Distribution Date in December 2007, the Class
II-A-3 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, minus 0.873%; provided that, on such Distribution Dates, for
federal income tax purposes the Class II-A-3 Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest II-A-3, weighted on the basis of
the Uncertificated Principal balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date minus 0.873%. After the
Distribution Date in December 2007, the Class II-A-3 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
that on such Distribution Dates, for federal income tax purposes the Class
II-A-3 Certificates will bear interest at a rate equivalent to the foregoing,
expressed as the weighted average of the Pass-Through Rate on REMIC II Regular
Interest II-A-3, weighted on the basis of the Uncertificated Principal balance
of such REMIC II 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 4.290% per annum.

         (10) On or prior to the Distribution Date in December 2007, the Class
II-X-A-3 Certificates will bear interest at a pass-through rate equal to 0.873%
per annum. After the Distribution Date in December 2007, the Class II-X- A-3
Certificates will not bear any interest.

         (11) On or prior to the Distribution Date in December 2007, the Class
II-A-4 Certificates will bear interest at a pass-through rate equal to 3.526%
per annum. After the Distribution Date in December 2007, the Class II-A-4
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 that on such Distribution Dates, for federal income
tax purposes the Class II-A-4 Certificates will bear interest at a rate
equivalent

                                      -68-

<PAGE>

to the foregoing, expressed as the weighted average of the Pass-Through Rate on
REMIC II Regular Interest II-A-4, weighted on the basis of the Uncertificated
Principal balance of such REMIC II Regular Interest immediately preceding the
related Distribution Date.

         (12) On or prior to the Distribution Date in December 2007, the Class
II-X-A-4 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, minus 3.526%; provided that, on such Distribution
Dates, for federal income tax purposes the Class II-X-A-IV Certificates will
bear interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass-Through Rate on REMIC II Regular Interest II-A-4, weighted
on the basis of the Uncertificated Principal balance of such REMIC II Regular
Interest immediately preceding the related Distribution Date minus 3.526%. After
the Distribution Date in December 2007, the Class II-X-A-4 Certificates will not
bear any interest.

         (13) The Class III-A-1 Certificates will bear interest at a variable
pass-through rate equal to the weighted average of the Net Rates of the Group 3
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, on such
Distribution Dates, for federal income tax purposes the Class III-A-1
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rate on REMIC II Regular Interest
III-A-1, weighted on the basis of the Uncertificated Principal Balance of such
REMIC II 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 5.205% per annum.

         (14) On or prior to the Distribution Date in February 2010, the Class
III-A-2 Certificates will bear interest at a variable pass-through rate equal to
the weighted average of the Net Rates of the Group 3 Mortgage Loans, weighted on
the basis of the respective Scheduled Principal Balances of each such Mortgage
Loan as of the beginning of the Due Period immediately preceding the related
Distribution Date, minus 0.647%; provided that, on such Distribution Dates, for
federal income tax purposes the Class III-A-2 Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest III-A-2, weighted on the basis of
the Uncertificated Principal balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date minus 0.647%. After the
Distribution Date in February 2010, the Class III-A-2 Certificates will bear
interest at a variable pass-through rate equal to the weighted average of the
Net Rates of the Group 3 Mortgage Loans, weighted on the basis of the respective
Scheduled Principal Balances of each such Mortgage Loan as of the beginning of
the Due Period immediately preceding the related Distribution Date; provided
that on such Distribution Dates, for federal income tax purposes the Class
III-A-2 Certificates will bear interest at a rate equivalent to the foregoing,
expressed as the weighted average of the Pass-Through Rate on REMIC II Regular
Interest III-A-2, weighted on the basis of the Uncertificated Principal balance
of such REMIC II 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 4.558% per annum.

         (15) On or prior to the Distribution Date in February 2010, the Class
III-X-A-2 Certificates will bear interest at a pass-through rate equal to 0.647%
per annum. After the Distribution Date in February 2010, the Class III-X-A-2
Certificates will not bear any interest.

         (16) On or prior to the Distribution Date in February 2010, the Class
III-A-3 Certificates will bear interest at a variable pass-through rate equal to
the weighted average of the Net Rates of the Group 3 Mortgage Loans, weighted on
the basis of the respective Scheduled Principal Balances of each such Mortgage
Loan as of the beginning of the Due Period immediately preceding the related
Distribution Date, minus 1.135%; provided that, on such Distribution Dates, for
federal income tax purposes the Class III-A-3 Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest III-A-3, weighted on the basis of
the Uncertificated Principal balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date minus 1.135%. After the
Distribution Date in February 2010, the Class III-A-3 Certificates will bear
interest at a variable pass-through rate equal to the weighted average of the
Net Rates of the Group 3 Mortgage Loans, weighted on the basis of the respective
Scheduled Principal Balances of each such Mortgage Loan as of the beginning of
the Due Period immediately preceding the related Distribution Date; provided
that on such Distribution Dates, for

                                      -69-

<PAGE>

federal income tax purposes the Class III-A-3 Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest III-A-3 weighted on the basis of
the Uncertificated Principal balance of such REMIC II 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
4.070% per annum.

         (17) On or prior to the Distribution Date in February 2010, the Class
III-X-A-3 Certificates will bear interest at a pass-through rate equal to 1.135%
per annum. After the Distribution Date in February 2010, the Class III-X-A-3
Certificates will not bear any interest.

         (18) The Class IV-A-1 Certificates will bear interest at a variable
pass-through rate equal to the weighted average of the Net Rates of the Group 4
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, on such
Distribution Dates, for federal income tax purposes the Class IV-A-1
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rate on REMIC II Regular Interest
IV-A-1, weighted on the basis of the Uncertificated Principal Balance of such
REMIC II 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 5.681% per annum.

         (19) The Class R-I, Class R-II and Class R-III 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
that, on such Distribution Dates, for federal income tax purposes the Class R-I,
Class R-II and Class R-III Certificates will bear interest at a rate equivalent
to the foregoing, expressed as the weighted average of the Pass-Through Rates on
REMIC II Regular Interests I-A1 and I-A2, weighted on the basis of the
Uncertificated Principal Balance of each such REMIC II 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
4.539% per annum.

         (15) The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates will bear interest at a variable pass-through rate equal
to the weighted average of the Net Rates of each Mortgage Loan Group, weighted
in proportion to the results of subtracting from the aggregate principal balance
of each Mortgage Loan Group, the Current Principal Amount of the related Class
or Classes of Senior Certificates; provided that for federal income tax purposes
such Certificates will bear interest at a rate equivalent to the foregoing,
expressed as the weighted average of the Pass- Through Rates on REMIC II Regular
Interests B-1, B-2, B-3, B-4, B-5 and B-6, weighted on the basis of the
Uncertificated Principal balance of each such REMIC II 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
5.213% 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, REMIC II 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 (or Notional Amount in the case
of the Interest Only Certificates) of such Class applicable to such Distribution
Date.

                                      -70-

<PAGE>

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

         (g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $1,000
and in each case increments of $1.00 in excess thereof, and (ii) in the case of
the Offered Subordinate Certificates, $25,000 and increments of $1.00 in excess
thereof, except that one Certificate of each such Class may be issued in a
different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign Physical Certificates all in an aggregate principal amount that
shall equal the Current Principal Amount of such Class on the Closing Date. The
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 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 Class R-I, Class R-II and Class R-III
Certificates shall each be issued in certificated fully-registered form in the
denomination of $100, $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

                                      -71-

<PAGE>

by one or more authorized signatories, each of whom shall be Responsible
Officers of the Trustee or its agent. A Certificate bearing the manual and
facsimile signatures of individuals who were the authorized signatories of the
Trustee or its agent at the time of issuance shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
positions prior to the delivery of such Certificate.

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

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

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

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

         (l) The following legend shall be placed on the Residual Certificates,
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, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE
         TRUSTEE, THE MASTER SERVICER AND THE SECURITIES ADMINISTRATOR WITH AN
         OPINION OF COUNSEL THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH
         WILL NOT RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS
         PERMISSIBLE UNDER APPLICABLE LAW AND WILL NOT GIVE RISE TO ANY
         ADDITIONAL FIDUCIARY OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER
         SERVICER OR THE TRUSTEE.

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

                                      -72-

<PAGE>

         THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, AND SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND 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 OR
UNLESS THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.

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

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

         (c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of Subsection 5.02(h), the following
restrictions shall apply with respect to the transfer and registration of
transfer of an Individual Certificate to a transferee that takes delivery in the
form of an Individual Certificate:

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

                  (ii) The Trustee shall register the transfer of any Individual
         Certificate if (x) the transferor has advised the Trustee in writing
         that the Certificate is being transferred to an Institutional
         Accredited Investor; and (y) prior to the transfer the transferee
         furnishes to the Trustee an Investment Letter (and the Trustee shall be
         fully protected in so doing), provided that, if based upon an Opinion
         of Counsel addressed to the Trustee to the effect that the delivery of
         (x) and (y) above are not sufficient to confirm that the proposed
         transfer is being

                                      -73-

<PAGE>

         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 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.

                                      -74-

<PAGE>

                  (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 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
the Corporate Trust Office, sign, countersign and deliver at the 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,

                                      -75-

<PAGE>

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 the Corporate Trust Office; provided, however, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
equal to the minimum authorized denomination or (ii) is acceptable to the Seller
as indicated to the Trustee in writing. Whenever any Certificates are so
surrendered for exchange, the Trustee shall sign and countersign and the Trustee
shall deliver the Certificates which the Certificateholder making the exchange
is entitled to receive.

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

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

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

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

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

                                      -76-

<PAGE>

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

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

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

                                      -77-

<PAGE>

Certificates will not cause the imposition of a tax upon the Trust or cause any
REMIC to fail to qualify as a REMIC.

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

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

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

         (b) The Private Certificates shall each bear a Securities Legend.

         Section 5.07 ERISA RESTRICTIONS. (a) Subject to the provisions of
subsection (b), no Residual Certificates or Private Certificates may be acquired
directly or indirectly by, or on behalf of, an employee benefit plan or other
retirement arrangement which is subject to Title I of ERISA and 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
addressed to the Trustee that is 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 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

                                      -78-

<PAGE>

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 Section
4975 of the Code, or (ii) the transfer and holding of an interest in such
Certificate to that Person and the subsequent servicing, management and
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) Each beneficial owner of a Class B-1, Class B-2 or Class B-3
Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or interest therein,
that either (i) it is not a Plan or investing with "Plan Assets", (ii) it has
acquired and is holding such certificate in reliance on the Exemption, and that
it understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P or Moody's Investors
Service, Inc., and the certificate is so rated or (iii) (1) it is an insurance
company, (2) the source of funds used to acquire or hold the certificate or
interest therein is an "insurance company general account," as such term is
defined in Prohibited Transaction Class Exemption ("PTCE") 95-60, and (3) the
conditions in Sections I and III of PTCE 95-60 have been satisfied.

         (d) Neither the Trustee, the Master Servicer nor the Securities
Administrator will be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to the Global Certificates. Any
attempted or purported transfer of any Certificate in violation of the
provisions of Subsections (a) or (b) above shall be void ab initio and such
Certificate shall be considered to have been held continuously by the prior
permitted Certificateholder. Any transferor of any Certificate in violation of
such provisions, shall indemnify and hold harmless the Trustee, the Securities
Administrator and the Master Servicer from and against any and all liabilities,
claims, costs or expenses incurred by the Trustee, the Securities Administrator
or the Master Servicer as a result of such attempted or purported transfer. The
Trustee shall have no liability for transfer of any such Global Certificates in
or through book-entry facilities of any Depository or between or among
Depository Participants or Certificate Owners made in violation of the transfer
restrictions set forth herein.

                                      -79-

<PAGE>

         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.

                                      -80-

<PAGE>

                                   ARTICLE VI
                         Payments to Certificateholders

         Section 6.01 DISTRIBUTIONS ON THE CERTIFICATES. (a) Interest and
principal on the Certificates (other than the Interest Only Certificates) will
be distributed monthly on each Distribution Date, commencing in May 2003, in an
amount equal to the Available Funds on deposit in the Distribution Account for
such Distribution Date. On each Distribution Date, the Available Funds on
deposit in the Distribution Account shall be distributed as follows:

                  (A) on each Distribution Date, the Group 1 Available Funds
                  will be distributed to the Group 1 Senior Certificates as
                  follows:

                           FIRST, to the Group 1 Senior Certificates, on a pro
                           rata basis, the Accrued Certificate Interest on such
                           Classes for such Distribution Date. As described
                           below, Accrued Certificate Interest on the Group 1
                           Senior Certificates is subject to reduction in the
                           event of certain Net Interest Shortfalls allocable
                           thereto;

                           SECOND, to the Group 1 Senior Certificates, on a pro
                           rata basis, any Accrued Certificate Interest thereon
                           remaining undistributed from previous Distribution
                           Dates, to the extent of remaining Group 1 Available
                           Funds; and

                           THIRD, sequentially, in the following order, to the
                           Class R-I, Class R-II and Class R-III Certificates
                           and then pro rata to the Class I-A-1 Certificates and
                           Class I-A-2 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, in each
                           case, until the Current Principal Amount of each such
                           Class has been reduced to zero;

                  (B) on each Distribution Date, the Group 2 Available Funds
                  will be distributed to the Group 2 Senior Certificates as
                  follows:

                           FIRST, to the Group 2 Senior Certificates, on a pro
                           rata basis, the Accrued Certificate Interest on such
                           Classes for such Distribution Date. As described
                           below, Accrued Certificate Interest on the Group 2
                           Senior Certificates is subject to reduction in the
                           event of certain Net Interest Shortfalls allocable
                           thereto;

                           SECOND, to the Group 2 Senior Certificates, on a pro
                           rata basis, any Accrued Certificate Interest thereon
                           remaining undistributed from previous Distribution
                           Dates, to the extent of remaining Group 2 Available
                           Funds; and

                           THIRD, to the Class II-A-1, Class II-A-2, Class
                           II-A-3 and Class II-A-4 Certificates, on a pro rata
                           basis, in reduction of the Current Principal Amounts
                           thereof, the Group 2 Senior Optimal Principal Amount
                           for such

                                      -81-

<PAGE>

                           Distribution Date to the extent of remaining Group 2
                           Available Funds, until the Current Principal Amount
                           of each such Class has been reduced to zero;

                  (C) on each Distribution Date, the Group 3 Available Funds
                  will be distributed to the Group 3 Senior Certificates as
                  follows:

                           FIRST, to the Group 3 Senior Certificates, on a pro
                           rata basis, the Accrued Certificate Interest on each
                           such Class for such Distribution Date. As described
                           below, Accrued Certificate Interest on the Group 3
                           Senior Certificates is subject to reduction in the
                           event of certain Net Interest Shortfalls allocable
                           thereto;

                           SECOND, to the Group 3 Senior Certificates, on a pro
                           rata basis, any Accrued Certificate Interest thereon
                           remaining undistributed from previous Distribution
                           Dates, to the extent of remaining Group 3 Available
                           Funds; and

                           THIRD, to the Class III-A-1, Class III-A-2 and Class
                           III-A-3 Certificates, on a pro rata basis, in
                           reduction of the Current Principal Amounts thereof,
                           the Group 3 Senior Optimal Principal Amount for such
                           Distribution Date to the extent of remaining Group 3
                           Available Funds, until the Current Principal Amount
                           of each such Class has been reduced to zero;

                  (D) on each Distribution Date, the Group 4 Available Funds
                  will be distributed to the Group 4 Senior Certificates as
                  follows:

                           FIRST, to the Group 4 Senior Certificates, the
                           Accrued Certificate Interest on such Class for such
                           Distribution Date. As described below, Accrued
                           Certificate Interest on the Group 4 Senior
                           Certificates is subject to reduction in the event of
                           certain Net Interest Shortfalls allocable thereto;

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

                           THIRD, to the Class IV-A-1 Certificates, in reduction
                           of the Current Principal Amount thereof, the Group 4
                           Senior Optimal Principal Amount for such Distribution
                           Date to the extent of remaining Group 4 Available
                           Funds, until the Current Principal Amount of such
                           Class has been reduced to zero;

                  (E) Except as provided in (F) and (G) below, on each
                  Distribution Date prior to the Cross-Over Date, an amount
                  equal to any remaining Group 1, Group 2, Group 3 and Group 4
                  Available Funds after the distributions in (A), (B), (C) and
                  (D) 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

                                      -82-

<PAGE>

                  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 remaining Group 1, Group 2,
                  Group 3 and Group 4 Available Funds.

                  (F) 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, Group 2, Group 3, or Group 4 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 Certificates' respective Loan Group allocated
                  to such Group of Senior Certificates, 100% of the Principal
                  Prepayments on any Mortgage Loan in the Loan Group relating to
                  the fully repaid Class or Classes of Senior Certificates;
                  provided, however, that if (A) the weighted average of the
                  Subordinate Percentages on such Distribution Date equals or
                  exceeds two times the initial weighted average of the
                  Subordinate Percentages and (B) the aggregate Scheduled
                  Principal Balance of the Mortgage Loans delinquent 60 days or
                  more (including for this purpose any such Mortgage Loans in
                  foreclosure and Mortgage Loans with respect to which the
                  related Mortgaged Property has been acquired by the Trust),
                  averaged over the last six months, as a percentage of the sum
                  of the aggregate Current Principal Amount of the Subordinate
                  Certificates does not exceed 100%, then the additional
                  allocation of Principal Prepayments to the Senior Certificates
                  in accordance with this clause (F) will not be made and 100%
                  of the Principal Prepayments on any Mortgage Loan in the Loan
                  Group relating to the fully repaid Class or Classes of Senior
                  Certificates will be allocated to the Subordinate
                  Certificates.

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

                                      -83-

<PAGE>

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

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

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

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

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

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

                                      -84-

<PAGE>

         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;

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

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

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

                  seventh, if such loss is on a Group 1, Group 2, Group 3 or
         Group 4 Mortgage Loan, to the Senior Certificates (other than the
         Interest Only Certificates) of the related Mortgage Loan Group, on a
         pro rata basis; and

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

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

         (d) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class (other than the Interest Only
Certificates) 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.

                                      -85-

<PAGE>

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

         (f) On each Distribution Date, the Securities Administrator shall
determine and notify the Trustee of the Subordinate Certificate Writedown
Amount. Any Subordinate Certificate Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of (i) if prior to the
Cross-Over Date, the Current Principal Amounts of the Subordinate Certificates,
in the reverse order of their numerical Class designations and (ii) from and
after the Cross-Over Date, the Senior Certificates which reduction shall occur
on such Distribution Date after giving effect to distributions made on such
Distribution Date.

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

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

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

                                      -86-

<PAGE>

         Section 6.04 STATEMENTS TO CERTIFICATEHOLDERS. (a) Concurrently with
each distribution to Certificateholders, the Securities Administrator shall make
available to the parties hereto and each Certificateholder via the Securities
Administrator's internet website as set forth below, the following information,
expressed with respect to clauses (i) through (vii) in the aggregate and as a
Fractional Undivided Interest representing an initial Current Principal Amount
of $1,000, or in the case of the Class R-I Certificate, an initial Current
Principal Amount of $100, or in the case of each of the Class R-II Certificate
and the Class R-III Certificate, an initial Current Principal Amount of $50:

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

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

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

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

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

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

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

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

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

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

                                      -87-

<PAGE>

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

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

                  (xiii) information for each Loan Group and in the aggregate
         regarding any Mortgage Loan delinquencies as of the end of the related
         Prepayment Period, including the aggregate number and aggregate
         Outstanding Principal Balance of Mortgage Loans (a) delinquent 30 to 59
         days on a contractual basis, (b) delinquent 60 to 89 days on a
         contractual basis, and (c) delinquent 90 or more days on a contractual
         basis, in each case as of the close of business on the last Business
         Day of the immediately preceding month;

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

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

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

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

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

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

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

                                      -88-

<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 Securities Administrator's 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.

         Tot he extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
Certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at www.jpmorgan.com/absmbs. Assistance in
using the Trustee's website service can be obtained by calling the Trustee's
customer service desk at (877) 722-1095.

         (b) By April 30 of each year beginning in 2004, the Trustee will
furnish such report to each Holder of the Certificates of record at any time
during the prior calendar year as to the aggregate of amounts reported pursuant
to subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine and advises
the Trustee to be necessary and/or to be required by the Internal Revenue
Service or by a federal or state law or rules or regulations to enable such
Holders to prepare their tax returns for such calendar year. Such obligations
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Securities Administrator or the
Trustee pursuant to the requirements of the Code.

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

                                                       -89-

<PAGE>

         Section 6.06 COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the aggregate amounts
required to be paid by the Servicers under the 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
related Servicers (such amount, the "Compensating Interest Payment"). The Master
Servicer shall not be entitled to any reimbursement of any Compensating Interest
Payment.

                                      -90-

<PAGE>

                                   ARTICLE VII
                               The Master Servicer

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

         Section 7.02      MERGER OR CONSOLIDATION OF THE MASTER SERVICER.

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

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

         Section 7.03 INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER AND
THE SECURITIES ADMINISTRATOR. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement, the Servicing Agreements, the
Assignment Agreements or the Certificates or the powers of attorney delivered by
the Trustee hereunder (i) related to the Master Servicer's failure to perform
its duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) or (ii)
incurred by reason of the Master Servicer's willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder, provided, in each case, that with
respect to any such claim or legal action (or pending or threatened claim or
legal action), the Trustee shall have given the Master Servicer and the Seller
written notice thereof promptly after the Trustee shall have with respect to
such claim or legal action knowledge thereof. The Master Servicer's failure to
receive any such notice shall not affect the Trustee's right to indemnification
hereunder, except to the extent the Master Servicer is materially prejudiced by
such failure to give notice. 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 covered by the
Master Servicer's indemnification pursuant to Subsection (a) above.

                                      -91-

<PAGE>

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

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

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

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

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

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

                                      -92-

<PAGE>

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

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

         Section 7.05 MASTER SERVICER NOT TO RESIGN. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Independent Counsel addressed to the Trustee 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. Notwithstanding the foregoing, the compensation payable to a
successor master servicer may not exceed the compensation which the Master
Servicer would have been entitled to retain if the Master Servicer had continued
to act as Master Servicer hereunder.

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

                                      -93-

<PAGE>

Trustee an Officer's Certificate and an Opinion of Independent Counsel addressed
to the Trustee, 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.

                                      -94-

<PAGE>

                                  ARTICLE VIII
                                     Default

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

                  (i) The Master Servicer fails to cause to be deposited in the
         Distribution Account any amount so required to be deposited pursuant to
         this Agreement (other than a Monthly Advance), 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;

                  (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;
         or

                                      -95-

<PAGE>

                  (vi) The Master Servicer fails to deposit, or cause to be
         deposited, in the Distribution Account any Monthly Advance (other than
         a Nonrecoverable Advance) by 5:00 p.m. New York City time on the
         Distribution Account Deposit Date.

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.

         Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy, immediately
terminate all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Monthly Advances and other advances
of its own funds, and the Trustee shall act as provided in Section 8.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be
prior to the distribution on the relevant Distribution Date.

                                      -96-

<PAGE>

         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 compensation 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 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, the
compensation shall not be in excess of that which the Master Servicer would have
been entitled to if the Master Servicer had continued to act hereunder, 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.

                                      -97-

<PAGE>

         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 actually known to a Responsible Officer of the Trustee, unless such
Event of Default shall have been cured, notice of each such Event of Default.
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, which default may only be waived by Holders of Certificates
evidencing Fractional Undivided Interests aggregating 100% of the Trust Fund.
Upon any such waiver of a past default, such default shall be deemed to cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
timely remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived. The Trustee shall give notice of any such
waiver to the Rating Agencies.

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

                                      -98-

<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 hereunder; 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
solely 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

                                      -99-

<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;

                  (vii) None of the Securities Administrator, the Seller, 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 and

                  (viii) 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.

                                      -100-

<PAGE>

         (e) All funds received by the Master Servicer and the Trustee and
required to be deposited in the Master Servicer Collection Account or
Distribution Account pursuant to this Agreement will be promptly so deposited by
the Master Servicer and the Trustee.

         (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 the Seller, the Master Servicer or a
         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 has actual knowledge (which has not
         been cured or waived), 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

                                      -101-

<PAGE>

         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
         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.

                                      -102-

<PAGE>

         Section 9.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR MORTGAGE LOANS. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Seller, and neither
the Trustee nor the Securities Administrator shall have any responsibility for
their correctness. Neither the Trustee nor the Securities Administrator makes
any representation as to the validity or sufficiency of the Certificates (other
than the signature and countersignature of the Trustee on the Certificates) or
of any Mortgage Loan except as expressly provided in Sections 2.02 and 2.05
hereof; provided, however, that the foregoing shall not relieve the Trustee of
the obligation to review the Mortgage Files pursuant to Sections 2.02 and 2.04.
The Trustee's signature and countersignature (or countersignature of its agent)
on the Certificates shall be solely in its capacity as Trustee and shall not
constitute the Certificates an obligation of the Trustee in any other capacity.
Neither the Trustee or the Securities Administrator shall be accountable for the
use or application by the Seller of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to the
Seller with respect to the Mortgage Loans. Subject to the provisions of Section
2.05, neither the Trustee nor the Securities Administrator shall not be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement.

         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 between the Trustee and
the Master Servicer. In addition, the Trustee and the Securities Administrator
will be entitled to recover from the Master Servicer Collection Account pursuant
to Section 4.03(b) all reasonable out-of-pocket expenses, disbursements and
advances and the expenses of the Trustee and the Securities Administrator,
respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from its
negligence or intentional misconduct or which is the responsibility of the
Certificateholders. If funds in the Master Servicer Collection Account are
insufficient therefor, the

                                      -103-

<PAGE>

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

                                      -104-

<PAGE>

         (b) If at any time the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 9.06 and shall
fail to resign after written request therefor by the Seller or if at any time
the Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Seller shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.

         (c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in quadruplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Seller, the Master Servicer,
the Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed. In the event that the
Trustee or Securities Administrator is removed by the Holders of Certificates in
accordance with this Section 9.08(c), the Holders of such Certificates shall be
responsible for paying any compensation payable to a successor Trustee or
successor Securities Administrator, in excess of the amount paid to the
predecessor Trustee or predecessor Securities Administrator, as applicable.

         (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.

                                      -105-

<PAGE>

         (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.

         Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.

         Section 9.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the Seller
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
and the Seller to act as cotrustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity, such title to the Trust, or
any part thereof, and, subject to the other provisions of this Section 9.11,
such powers, duties, obligations, rights and trusts as the Seller and the
Trustee may consider necessary or desirable.
         (b) If the Seller shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Seller.

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

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

                                      -106-

<PAGE>

incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.

         (e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision 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 and REMIC III 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 and REMIC III, the Trust Fund, if applicable, and the
Certificates containing such information and at the times and in the manner as
may be required by the Code or applicable Treasury regulations, and shall
furnish to each Holder of Certificates at any time during the calendar year for
which such returns or reports are made such statements or information at the
times and in the manner as may be required thereby, including, without
limitation, reports relating to interest, original issue discount and market
discount or premium (using a constant prepayment assumption of 25% CPR). The
Securities Administrator will apply for an Employee Identification Number from
the IRS under Form SS-4 or any other acceptable method for all tax entities. In
connection with the foregoing, the Securities Administrator shall timely prepare
and file, and the Trustee shall sign, IRS Form 8811, which shall provide the
name and address of the person who can be contacted to obtain information
required to be reported to the holders of regular interests in each of REMIC I,
REMIC II and REMIC III (the "REMIC Reporting Agent"). The Trustee shall make
elections to treat each of REMIC I, REMIC II and REMIC III as

                                      -107-

<PAGE>

a REMIC (which elections shall apply to the taxable period ending December 31,
2003 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.ss.1.860F-4(d)) for REMIC I, the Holder of
the Class R-II Certificate is hereby designated as the "Tax Matters Person" for
REMIC II and the Holder of the Class R-III Certificate is hereby designated as
the "Tax Matters Person" for REMIC III. The Securities Administrator is hereby
designated and appointed as the agent of each such Tax Matters Person. Any
Holder of a Residual Certificate will by acceptance thereof appoint the
Securities Administrator as agent and attorney-in-fact for the purpose of acting
as Tax Matters Person for each of REMIC I, REMIC II and REMIC III 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 and REMIC III 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

                                      -108-

<PAGE>

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.

                                      -109-

<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 10.03, 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 (the "Termination Purchase Price") equal to the
         sum of (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, (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, (c) unreimbursed out-of
         pocket costs of the Master Servicer, including unreimbursed servicing
         advances and the principal portion of any unreimbursed Monthly
         Advances, made on the Mortgage Loans prior to the exercise of such
         repurchase right and (d) any unreimbursed costs and expenses of the
         Trustee and the Securities Administrator payable pursuant to Section
         9.05; 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.

                                      -110-

<PAGE>

         (c) The right of the Seller or its designee to repurchase all the
assets of the Trust Fund described in 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 or REMIC III 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 REMIC I, REMIC II and REMIC III at
any time, and upon such election, the Seller or its designee, shall repurchase
all the assets of the Trust Fund described in Subsection 10.01(a)(i) above.

         (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 assets in the Trust Fund as described 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 Termination Purchase Price. Upon
presentation and surrender of the Certificates by the Certificateholders, the
Trustee shall distribute to the Certificateholders as directed by the Securities
Administrator in writing 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 Senior Certificates in full, any such deficiency will be allocated first, to
the Subordinate Certificates, in inverse order of their numerical designation
and then to the Group 1 Senior Certificates on a pro rata basis. If the proceeds
with respect to the Group 2 Mortgage Loans are not sufficient to pay all of the
Group 2 Senior Certificates in full, any such deficiency will be allocated
first, to the Subordinate Certificates, in inverse order of their numerical
designation and then to the Group 2 Senior Certificates on a pro rata basis. If
the proceeds with respect to the Group 3 Mortgage Loans are not sufficient to
pay all of the Group 3 Senior Certificates in full, any such deficiency will be
allocated first, to the Subordinate Certificates, in inverse order of their
numerical designation and then to the Group 3 Senior Certificates on a pro rata
basis. If the proceeds with respect to the Group 4 Mortgage Loans are not
sufficient to pay all of the Group 4 Senior Certificates in full, any such
deficiency will be allocated first, to the Subordinate Certificates, in inverse
order of their numerical designation and then to the Group 4 Senior Certificates
on a pro rata basis.

                                      -111-

<PAGE>

Upon deposit of the required repurchase price and following such final
Distribution Date, the Trustee shall release promptly to the Seller and/or its
designee the Mortgage Files for the remaining applicable Mortgage Loans, and the
Accounts with respect thereto shall terminate, subject to the Trustee's
obligation to hold any amounts payable to Certificateholders in trust without
interest pending final distributions pursuant to Subsection 10.01(g). Any other
amounts remaining in the Accounts will belong to the Seller. Upon deposit of the
required repurchase price and following such final Distribution Date, the
Trustee shall release promptly to the Seller and/or its designee, as the case
may be, the Mortgage Files for the remaining Mortgage Loans, and the Accounts
with respect thereto shall terminate, subject to the Trustee's obligation to
hold any amounts payable to Certificateholders in trust without interest pending
final distributions pursuant to Subsection 10.01(g).

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

         (g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.

         Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS. (a) If the option of
the Seller to repurchase all the Mortgage Loans under Subsection 10.01(a)(i)
above is exercised, the Trust Fund and each of REMIC I, REMIC II and REMIC III
shall be terminated in accordance with the following additional requirements,
unless the Trustee has been furnished with an Opinion of Counsel addressed to
the Trustee 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
REMIC I, REMIC II or REMIC III or (ii) cause any REMIC to fail to qualify as a
REMIC at any time that any Regular Certificates are outstanding:

                                      -112-

<PAGE>

                  (i) within 90 days prior to the final Distribution Date, at
         the written direction of the Seller, the Trustee, as agent for the
         respective Tax Matters Persons, shall adopt a plan of complete
         liquidation of REMIC I, REMIC II and REMIC III in the case of a
         termination under Subsection 10.01(a)(i), 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 and REMIC III and at
         or prior to the final Distribution Date relating thereto, 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 and REMIC III 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
related REMIC upon the written request of the Seller, and to take such action in
connection therewith as may be reasonably requested by the Seller and (ii)
appoint the Seller as their attorney-in-fact, with full power of substitution,
for purposes of adopting such a plan of complete liquidation. The Trustee shall
adopt such plan of liquidation by filing the appropriate statement on the final
tax return of each REMIC. Upon complete liquidation or final distribution of all
of the assets of the Trust Fund, the Trust Fund and each of REMIC I, REMIC II
and REMIC III shall terminate.

                                      -113-

<PAGE>

                                   ARTICLE XI
                            Miscellaneous Provisions

         Section 11.01 INTENT OF PARTIES. The parties intend that each of REMIC
I, REMIC II and REMIC III 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
or REMIC III to fail to qualify as a REMIC for federal income tax purposes, as
evidenced by an Opinion of Independent Counsel addressed to the Trustee 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 this 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

                                      -114-

<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
addressed to the Trustee 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

                                      -115-

<PAGE>

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

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

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

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

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

         (e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator, the Seller, the
Master Servicer or any Affiliate thereof shall be disregarded, except as
otherwise provided in Section 11.02(b) and except that, in determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Certificates which have been pledged in good faith to the Trustee,
the Securities

                                     -116-

<PAGE>

Administrator, the Seller, the Master Servicer or any Affiliate thereof may be
regarded as outstanding if the pledgor establishes to the satisfaction of the
Trustee the pledgor's right to act with 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 (OTHER THAN SECTION 5- 1401 OF THE
GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE
CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) 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,
383 Madison Avenue, New York, New York 10179, Attention: Vice
President-Servicing, telecopier number: (212) 272-5591, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the EMC, 383 Madison Avenue, New York, New York 10179, Attention: Vice
President-Servicing, telecopier number: (212) 272-5591, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (iv) in
the case of the Master Servicer or Securities Administrator, Wells Fargo Bank
Minnesota, National Association, P.O. Box 98, Columbia Maryland 21046 (or, in
the case of overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland
21045) (Attention: BART 2003-3), 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, New York, New York 10007 and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041. 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.

                                      -117-

<PAGE>

         Section 11.09 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.

         Section 11.10 ARTICLE AND SECTION HEADINGS. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.

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

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

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

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

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

         4. The repurchase or substitution of Mortgage Loans;

         5. The final payment to Certificateholders; and

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

                                      -118-

<PAGE>

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

                                   STRUCTURED ASSET MORTGAGE
                                   INVESTMENTS INC., as Seller

                                   By:
                                   Name: Baron Silverstein
                                   Title: Vice President

                                   JPMORGAN CHASE BANK, as Trustee

                                   By:
                                   Name:
                                   Title:

                                   WELLS FARGO BANK MINNESOTA,
                                   NATIONAL ASSOCIATION, as Master
                                   Servicer

                                   By:
                                   Name: Stacey Wainwright
                                   Title: Assistant Vice President

                                   WELLS FARGO BANK MINNESOTA,
                                   NATIONAL ASSOCIATION, as Securities
                                   Administrator

                                   By:
                                   Name: Stacey Wainwright
                                   Title: Assistant Vice President

                                   EMC MORTGAGE CORPORATION

                                   By
                                   Name: Sherri Lauritson
                                   Title: Executive Vice President

<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

                                   By:
                                   Name: Sherri Lauritson
                                   Title:   Executive Vice President

<PAGE>

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

         On the 30th day of April, 2003 before me, a notary public in and for
said State, personally appeared Baron Silverstein, known to me to be a(n) Vice
President of Structured Asset Mortgage Investments Inc., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                        --------------------------------------
                                              Notary Public

[Notarial Seal]

<PAGE>

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

         On the 30th day of April, 2003 before me, a notary public in and for
said State, personally appeared __________________, known to me to be a(n)
____________________ of JPMorgan Chase Bank, the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said entity, and acknowledged to me that such entity executed the within
instrument.

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

                                        -------------------------------------
                                                Notary Public

[Notarial Seal]

<PAGE>

STATE OF MARYLAND      )
                       ) ss.:
COUNTY OF  HOWARD      )

         On the 30th day of April, 2003 before me, a notary public in and for
said State, personally appeared Stacey Wainwright, known to me to be an
Assistant Vice President of Wells Fargo Bank Minnesota, National Association,
the entity that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity executed the within instrument.

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

                                        --------------------------------------
                                               Notary Public

[Notarial Seal]

<PAGE>

STATE OF MARYLAND    )
                     ) ss.:
COUNTY OF HOWARD     )

         On the 30th day of April, 2003 before me, a notary public in and for
said State, personally appeared Stacey Wainwright, known to me to be a(n)
Assistant Vice President of Wells Fargo Bank Minnesota, National Association,
the entity that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity executed the within instrument.

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

                                        --------------------------------------
                                                  Notary Public

[Notarial Seal]

<PAGE>

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

         On the 30th day of April, 2003 before me, a notary public in and for
said State, personally appeared Sherri Lauritson, known to me to be Executive
Vice President 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]

<PAGE>

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

         On the 30th day of April, 2003 before me, a notary public in and for
said State, personally appeared Ralene Ruyle, known to me to be President 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]

<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").

                  [THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND 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 TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED WILL
BE 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 WILL
BE 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

<PAGE>

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

Class [_-A-_] Senior

Date of Pooling and Servicing Agreement and               Aggregate Initial Current [Principal] [Notional]
Cut-off Date:                                             Amount of this Senior Certificate as of the
April 1, 2003                                             Cut-off Date:
                                                          $[_____________]

First Distribution Date:                                  Initial Current [Principal][Notional] Amount of
May 27, 2003                                              this Senior Certificate as of the Cut-off Date:
                                                          $[_____________]

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

Assumed Final Distribution Date:
May 25, 2033
</TABLE>

                          BEAR STEARNS ARM TRUST 2003-3
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2003-3

         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 adjustable rate mortgage loans
         secured by first liens on one-to-four family residential properties and
         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") primarily consisting of adjustable rate mortgage loans secured by
first liens on one- to four- family residential properties (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

                                       A-2

<PAGE>

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"), Wells Fargo Bank Minnesota,
National Association as master servicer and securities administrator, EMC
Mortgage Corporation and JPMorgan Chase Bank, 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 hereof at a per annum rate equal to
the Pass-Through Rate set forth above and as further described in the Agreement.
The Trustee will distribute on the 25th day of each month, or, if such 25th 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 (or if such last day is not a Business Day,
the Business Day immediately preceding such last 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 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 Amount hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.]

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in twenty-six 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.

                                       A-3

<PAGE>

                  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; (i) the amendment thereof and the modification of the rights and
obligations of the Seller, the Master Servicer and the Trustee and the rights of
the Certificateholders under the Agreement from time to time by EMC, the Seller,
the Master Servicer, the Securities Administrator and the Trustee, and (ii) the
amendment of the Servicing Agreements by the Mater 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 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 and of the
Servicing Agreements 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 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

                                       A-4

<PAGE>

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-5

<PAGE>

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

Dated: April ___, 2003                        JPMORGAN CHASE BANK
                                              Not in its individual capacity but
                                              solely as Trustee

                                              By:_______________________________
                                                      Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

                                              JPMORGAN CHASE BANK
                                              Authorized signatory of JPMorgan
                                              Chase Bank, not in its individual
                                              capacity but solely as Trustee

                                              By:_______________________________
                                                      Authorized Signatory

<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.

<PAGE>

                                                                     EXHIBIT A-2

                         FORM OF CLASS [B-_] CERTIFICATE

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO
THE SENIOR CERTIFICATES, [AND THE] [AND THE CLASS B-_ 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").

                  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

                  [FOR CLASS B-1, CLASS B-2 AND CLASS B-3] [EACH BENEFICIAL
OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO HAVE
REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THAT CERTIFICATE OR
INTEREST THEREIN, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("PLAN"), OR INVESTING WITH
ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 90-30, AS AMENDED FROM TIME TO TIME
("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE
AVAILABILITY OF THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT
THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY STANDARD &
POOR'S, FITCH, INC. OR MOODY'S INVESTORS

                                      A-2-1

<PAGE>

SERVICE, INC., AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE
COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT", AS SUCH TERM IS
DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND (3) THE
CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.]

         [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.]

         [FOR CLASS B-4, CLASS B-5 AND CLASS B-6] [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, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR
REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND 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 OBLIGATIONS ON THE
PART OF THE SELLER, THE SECURITIES

                                      A-2-2

<PAGE>

ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR
UNLESS THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.]

                                      A-2-3

<PAGE>

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

Class [B-_] Subordinate

Date of Pooling and Servicing Agreement and               Aggregate Initial Current Principal Amount of
Cut-off Date: April 1, 2003                               this Subordinate Certificate as of the Cut-off
                                                          Date: $[_________]

First Distribution Date:                                  Initial Current Principal Amount of this
May 27, 2003                                              Subordinate Certificate as of the Cut-off Date:
                                                          $[_________]

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

Assumed Final Distribution Date:
May 25, 2033
</TABLE>

                          BEAR STEARNS ARM TRUST 2003-3
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2003-3

         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 adjustable rate mortgage loans
         secured by first liens on one-to-four family residential properties and
         individual condominium units 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") primarily consisting of adjustable rate mortgage loans secured by
first liens on one- to four- family residential properties (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

                                        2

<PAGE>

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"), Wells Fargo Bank Minnesota,
National Association as master servicer and securities administrator, EMC
Mortgage Corporation and JPMorgan Chase Bank, 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 and as further described in the Agreement. The
Trustee will distribute on the 25th day of each month, or, if such 25th 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 (or if such last day is not a Business Day,
the Business Day immediately preceding such last 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 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.

         [No transfer of this Class [B-_] Certificate will be made unless such
transfer is (i) 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 and (ii) made in accordance with Section 5.02
of the Agreement. In the event that such transfer is to be made the Trustee
shall register such transfer if, (i) made to a transferee who has provided the
Trustee with evidence as to its QIB status; or (ii) (A) the transferor has
advised the Trustee in writing that the Certificate is being transferred to an
Institutional Accredited Investor and (B) prior to such transfer the transferee
furnishes to the Trustee an Investment Letter; provided that if based upon an
Opinion of Counsel to the effect that (A) and (B) above are met sufficient to
confirm that such transfer is being made

                                        3

<PAGE>

pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other applicable laws.]

         [For Class B-4, Class B-5 and Class B-6] [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, or Section 4975 of the
Internal Revenue Code of 1986, as amended, unless the transferee certifies or
represents that the proposed transfer and holding of a Certificate and the
servicing, management and 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 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 or unless the opinion specified in section
5.07 of the Agreement is provided.]

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in twenty-six 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.

                  [For Class B-1, Class B-2 and Class B-3] [Each beneficial
owner of this Certificate or any interest therein shall be deemed to have
represented, by virtue of its acquisition or holding of that certificate or
interest therein, that either (i) it is not an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended or section 4975
of the Internal Revenue Code of 1986, as amended ("Plan"), or investing with
assets of a Plan or (ii) it has acquired and is holding such certificate in
reliance on Prohibited Transaction Exemption 90-30, as amended from time to time
("Exemption"), and that it understands that there are certain conditions to the
availability of the Exemption, including that the certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by Standard &
Poor's, Fitch, Inc. or Moody's Investors Service, Inc., and the certificate is
so rated or (iii) (1) it is an insurance company, (2) the source of funds used
to acquire or hold the certificate or interest therein is an "insurance company
general account", as such term is defined in Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE
95-60 have been satisfied.]

                  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; (i) the amendment thereof and the modification of the rights and
obligations of the Seller, the Master Servicer and the Trustee and the rights of
the Certificateholders under the Agreement from time to time by EMC, the

                                        4

<PAGE>

Seller, the Master Servicer, the Securities Administrator and the Trustee, and
(ii) the amendment of the Servicing Agreements by the Mater 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 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 and of the Servicing Agreements 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 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.

                                        5

<PAGE>

                  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.

                                        5

<PAGE>

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

Dated: April ___, 2003                        JPMORGAN CHASE BANK
                                              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.

                                              JPMORGAN CHASE BANK
                                              Authorized signatory of JPMorgan
                                              Chase Bank, not in its individual
                                              capacity but solely as Trustee

                                              By:_______________________________
                                                      Authorized Signatory

<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.

<PAGE>

                                                                     EXHIBIT A-3

                         FORM OF 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, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF
COUNSEL THAT IS SATISFACTORY TO THE TRUSTEE, THE MASTER SERVICER AND THE
SECURITIES ADMINISTRATOR THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH
PERSON WILL NOT RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS
PERMISSIBLE UNDER APPLICABLE LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR OR THE TRUSTEE.

                  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 CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A

<PAGE>

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.

                                        5

<PAGE>

<TABLE>
<CAPTION>
<S>                                                       <C>
Certificate No.1

Class R-[_]

Date of Pooling and Servicing Agreement and               Aggregate Initial Current Principal Amount of
Cut-off Date: April 1, 2003                               this Certificate as of the Cut-off Date:
                                                          $___________

First Distribution Date:                                  Initial Current Principal Amount of this
May 27, 2003                                              Certificate as of the Cut-off Date: $_________

Master Servicer:
Wells Fargo Bank Minnesota, National
Association                                               CUSIP: [_____________]

Assumed Final Distribution Date:
May 25, 2033
</TABLE>

                          BEAR STEARNS ARM TRUST 2003-3
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2003-3

         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 adjustable rate mortgage loans
         secured by first liens on one-to-four family residential properties
         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") primarily consisting of adjustable
rate mortgages loans secured by first liens on one- to four- family residential
properties (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 master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred

                                        3

<PAGE>

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"), Wells Fargo Bank Minnesota, National Association
as master servicer and securities administrator, EMC Mortgage Corporation and
JPMorgan Chase Bank, 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.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th 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 (or if such last day is not a
Business Day, the Business Day immediately preceding such last 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 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 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. 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 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

                                        4

<PAGE>

Retirement Income Security Act of 1974, as amended, and/or section 4975 of the
Internal Revenue Code of 1986, as amended, unless the proposed transferee
provides the Trustee, Master Servicer and the Securities Administrator with an
opinion of counsel (which shall not be at the expense of the Trustee, Master
Servicer or the Securities Administrator) which is acceptable to such entities,
that the purchase of this certificate will not result in or constitute a
nonexempt prohibited transaction, is permissible under applicable law and will
not give rise to any additional fiduciary obligations on the part of the Seller,
the Master Servicer or the Trustee.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in twenty-six 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; (i) the amendment thereof and the modification of the rights and
obligations of the Seller, the Master Servicer and the Trustee and the rights of
the Certificateholders under the Agreement from time to time by EMC, the Seller,
the Master Servicer, the Securities Administrator and the Trustee, and (ii) the
amendment of the Servicing Agreements by the Mater 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 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 and of the
Servicing Agreements 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

                                        5

<PAGE>

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 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.

                                        6

<PAGE>

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

Dated: April ___, 2003                        JPMORGAN CHASE BANK
                                              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.

                                              JPMORGAN CHASE BANK
                                              Authorized signatory of JPMorgan
                                              Chase Bank, not in its individual
                                              capacity but solely as Trustee

                                              By:_______________________________
                                                      Authorized Signatory

<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.

<PAGE>

                                                                       EXHIBIT B

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

                             [PROVIDED UPON REQUEST]

<PAGE>

                                                                       EXHIBIT C

                                   [RESERVED]

<PAGE>

                                                                       EXHIBIT D
                        REQUEST FOR RELEASE OF DOCUMENTS

To:      JPMorgan Chase Bank
         4 New York Plaza, 6th Floor
         New York, New York 10004

RE:      Pooling and Servicing Agreement dated as of
         April 1, 2003, among SAMI,
         Wells Fargo Bank Minnesota,
         National Association, as master servicer
          and securities administrator,
         EMC Mortgage Corporation and
         JPMorgan Chase Bank 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

                                             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
Investments Inc., Bear Stearns ARM Trust, Mortgage Pass-Through Certificates,
Series 2003-3 Class R-I, Class R-II and Class R-III 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.

         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]

JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York ,New York 10004

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

         Re:      Structured Asset Mortgage Investments Inc., Bear Stearns ARM
                  Trust, Series 2003-3 Mortgage Pass-Through Certificates (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 JPMorgan Chase Bank (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, or section 4975 of the Internal Revenue
                           Code of 1986, as amended, or (ii) are providing a
                           representation to the effect that the proposed
                           transfer and holding of a Privately Offered
                           Certificate and the servicing, management and
                           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,

                                      F-1-2

<PAGE>

                           PTE 90-1, PTE 95-60, or PTE 96-23 and (II) will not
                           give rise to any additional duties on the part of the
                           Seller, the Master Servicer, the Securities
                           Administrator or the Trustee (iii) have attached
                           hereto the opinion specified in Section 5.0 of the
                           Agreement.

                  (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,
                           OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986,
                           AS AMENDED, UNLESS THE PROPOSED TRANSFER AND HOLDING
                           OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
                           OPERATION OF THE TRUST

                                      F-1-3

<PAGE>

                           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 OR PTE
                           96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
                           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 OR UNLESS THE OPINION PROVIDED IN SECTION
                           5.07 OF THE AGREEMENT IS PROVIDED."

         "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 April 1, 2003, among
Structured Asset Mortgage Investments Inc., Wells Fargo Bank Minnesota, National
Association as master servicer and securities administrator, EMC Mortgage
Corporation and JPMorgan Chase Bank, 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]

JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York, New York 10004

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

                  Re:      Structured Asset Mortgage Investments Inc., Bear
                           Stearns ARM Trust, Series 2003-3 Mortgage
                           Pass-Through Certificates, 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 April 1, 2003, among Structured Asset Mortgage
Investments Inc., Wells Fargo Bank Minnesota, National Association, EMC Mortgage
Corporation and JPMorgan Chase Bank, 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, 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 holding of a Privately Offered Certificate and the servicing, management and
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 and (II) will not give rise to any
additional duties on the part of the Seller, the Master Servicer, the Securities
Administrator or the Trustee or (iii) has attached hereto the opinion specified
in Section 5.07 of the 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.

                                      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 April __, 2003, by and among JPMORGAN CHASE
BANK, 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 and the Trustee have
entered into a Pooling and Servicing Agreement, dated as of April 1, 2003,
relating to the issuance of Bear Stearns ARM Trust 2003-3, Mortgage Pass-Through
Certificates, Series 2003-3 (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.

                                   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

<PAGE>

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 by the Seller 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 Seller and 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 Seller and 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 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.

                                       G-2

<PAGE>

         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 missing from 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 Master Servicer Collection Account or 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 therefore 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
Master Servicer Collection Account or 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.

                  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.

                                       G-3

<PAGE>

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, representation or warranty 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, substitution of liability agreement or sale of servicing
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 AS 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 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

                                       G-4

<PAGE>

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.

                                   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

                                       G-5

<PAGE>

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, 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:                                      JPMORGAN CHASE BANK, as Trustee

4 New York Plaza, 6th Floor
New York, New York 10004                      By:____________________________
                                              Name:
Attention:                                    Title:
Telecopy:
Confirmation:
Address:                                      STRUCTURED ASSET MORTGAGE
                                              INVESTMENTS INC.
383 Madison Avenue
New York, New York 10179
                                              By:___________________________
                                              Name:    Baron Silverstein
                                              Title:   Vice President

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

                                              By:___________________________
                                              Name:    Stacey Wainwright
                                              Title:   Assistant Vice President

Address:                                      WELLS FARGO BANK MINNESOTA,
                                              NATIONAL ASSOCIATION, as Custodian
9062 Old Annapolis Road
Columbia, Maryland 21045                      By:___________________________
                                              Name:    Stacey Wainwright
                                              Title:   Assistant Vice President

<PAGE>

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

                  On the 30th day of April 2003 before me, a notary public in
and for said State, personally appeared _______________, known to me to be a
_________________of JPMorgan Chase Bank, a state 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]

<PAGE>

STATE OF MARYLAND              )
                               ) ss.:
COUNTY OF HOWARD               )

                  On the 30th day of April 2003 before me, a notary public in
and for said State, personally appeared Stacey Wainwright, known to me to be an
Assistant Vice President 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]

<PAGE>

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

                  On the 30th day of April 2003 before me, a notary public in
and for said State, personally appeared Baron Silverstein, known to me to be a
Vice President 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]

<PAGE>

STATE OF MARYLAND          )
                           )ss.:
COUNTY OF HOWARD           )

                  On the 30th day of April 2003 before me, a notary public in
and for said State, personally appeared Stacey Wainwright, known to me to be an
Assistant Vice President 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]

<PAGE>

                                   EXHIBIT ONE

                     FORM OF CUSTODIAN INITIAL CERTIFICATION

                                                  April __, 20__

JPMorgan Chase Bank                  Structured Asset Mortgage Investments Inc.
4 New York Plaza, 6th Floor          383 Madison Avenue
New York, New York 10004             New York, New York 10179

Attention: Structured Asset Mortgage Investments Inc.
Bear Stearns ARM Trust 2003-3, Mortgage Pass-Through Certificates, Series 2003-3

                  Re:      Custodial Agreement, dated as of April ___, 2003 , by
                           and among JPMorgan Chase Bank, Structured Asset
                           Mortgage Investments Inc. and Wells Fargo Bank
                           Minnesota, National Association relating to Bear
                           Stearns ARM Trust 2003-3, Mortgage Pass-Through
                           Certificates, Series 2003-3
                           -----------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3 of the above-captioned
Custodial Agreement, and subject to Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File (which contains an original Mortgage Note or lost note
affidavit) to the extent required in Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, with any exceptions listed on Schedule A attached hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.

                                                   WELLS FARGO BANK MINNESOTA,
                                                   NATIONAL ASSOCIATION

                                                   By:__________________________
                                                   Name:
                                                   Title:

<PAGE>

                                   EXHIBIT TWO

                     FORM OF CUSTODIAN INTERIM CERTIFICATION

                                                        April __, 20__

JPMorgan Chase Bank                   Structured Asset Mortgage Investments Inc.
4 New York Plaza, 6th Floor           383 Madison Avenue
New York, New York 10004              New York, New York 10179

Attention:  Structured Asset Mortgage Investments Inc.
Bear Stearns ARM Trust 2003-3, Mortgage Pass-Through Certificates, Series 2003-3

                Re:   Custodial Agreement, dated as of April ___, 2003 , by and
                      among JPMorgan Chase Bank, Structured Asset Mortgage
                      Investments Inc. and Wells Fargo Bank Minnesota, National
                      Association relating to Bear Stearns ARM Trust 2003-3,
                      Mortgage Pass-Through Certificates, Series 2003-3
                      ---------------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3 of the above-captioned
Custodial Agreement, the undersigned, as Custodian, hereby certifies that it has
received a Mortgage File to the extent required pursuant to Section 2.01 of the
Pooling and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.

                                                     WELLS FARGO BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION

                                                     By:________________________
                                                     Name:______________________
                                                     Title:_____________________

<PAGE>

                                  EXHIBIT THREE

                      FORM OF CUSTODIAN FINAL CERTIFICATION

                                              April __, 20__

JPMorgan Chase Bank                  Structured Asset Mortgage Investments Inc.
4 New York Plaza, 6th Floor          383 Madison Avenue
New York, New York 10004             New York, New York 10179

Attention: Structured Asset Mortgage Investments Inc.
Bear Stearns ARM Trust 2003-1, Mortgage Pass-Through Certificates, Series 2003-3

                  Re:  Custodial Agreement, dated as of April ___, 2003 , by and
                       among JPMorgan Chase Bank, Structured Asset Mortgage
                       Investments Inc. and Wells Fargo Bank Minnesota, National
                       Association relating to Bear Stearns ARM Trust 2003-3,
                       Mortgage Pass-Through Certificates, Series 2003-3
                       ---------------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3 of the above-captioned
Custodial Agreement and subject to Section 2.02(b) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule containing with respect to each such 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 originator thereof to the Person endorsing it to the Trustee
         or a lost note affidavit;

                  (ii) The original Mortgage and, if the related Mortgage Loan
         is a MOM Loan, noting the presence of the MIN and language indicating
         that such Mortgage Loan is a MOM Loan, which shall have been recorded
         (or if the original is not available, a copy), with evidence of such
         recording indicated thereon;

                  (iii) unless the Mortgage Loan is a MOM Loan, a certified copy
         of the assignment (which may be in the form of a blanket assignment if
         permitted in the jurisdiction in which the Mortgage 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;

<PAGE>

                  (iv) With respect to each Mortgage Loan, to the extent
         available, the original recorded assignment or assignments of the
         Mortgage showing an unbroken chain of title from the originator thereof
         to the Person assigning it to the Trustee or a copy of such assignment
         or assignments of the Mortgage certified by the public recording office
         in which such assignment or assignments have been recorded; and

                  (v) the original or a copy of the policy or certificate of
         primary mortgage guaranty insurance, to the extent available, if any,

                  (vi) the original policy of title insurance or mortgagee's
         certificate of title insurance or commitment or binder for title
         insurance, and

                  (vii) The original of each modification, assumption, extension
         or guaranty agreement, if any, relating to such Mortgage Loan or a copy
         of each modification, assumption, extension or guaranty agreement
         certified by the public recording office in which such document has
         been recorded.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement
or in the Pooling and Servicing Agreement, as applicable.

                                                   WELLS FARGO BANK MINNESOTA,
                                                   NATIONAL ASSOCIATION

                                                   By:__________________________
                                                   Name:________________________
                                                   Title:_______________________

<PAGE>

                                                                     EXHIBIT H-1

                              SERVICING AGREEMENT

                                Bank of America

                            [provided upon request]

                                       H-1

<PAGE>

                                                                     EXHIBIT H-2

                               SERVICING AGREEMENT

                                     Cendant

                             [provided upon request]

                                       H-2

<PAGE>

                                                                     EXHIBIT H-3

                              SERVICING AGREEMENTS

                                   Chevy Chase

                             [provided upon request]

                                       H-3

<PAGE>

                                                                     EXHIBIT H-4

                               SERVICING AGREEMENT

                                   Countrywide

                             [provided upon request]

                                       H-4

<PAGE>

                                                                     EXHIBIT H-5

                               SERVICING AGREEMENT

                                      GMAC

                             [provided upon request]

                                       H-5

<PAGE>

                                                                     EXHIBIT H-6

                               SERVICING AGREEMENT

                                     US BANK

                             [provided upon request]

                                       H-6

<PAGE>

                                                                     EXHIBIT H-7

                               SERVICING AGREEMENT

                                      WAMU

                             [provided upon request]

                                       H-7

<PAGE>

                                                                     EXHIBIT H-8

                               SERVICING AGREEMENT

                                      WFHM

                             [provided upon request]

                                       H-8

<PAGE>

                                                                     EXHIBIT H-9

                               SERVICING AGREEMENT

                                    Alliance

                             [provided upon request]

                                       H-9

<PAGE>

                                    EXHIBIT I

                              ASSIGNMENT AGREEMENTS

                             [provided upon request]

                                       I-1

<PAGE>

                                    EXHIBIT J

                        MORTGAGE LOAN PURCHASE AGREEMENT

                             [provided upon request]

                                       J-1EXHIBIT 4.1

<PAGE>

                          IMPAC CMB TRUST SERIES 2003-5

                                     Issuer

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY

                                Indenture Trustee

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

                                    INDENTURE

                           Dated as of April 30, 2003

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

                        COLLATERALIZED ASSET-BACKED BONDS

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

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS
                                                 -----------------

Section                                                                                                        Page
-------                                                                                                        ----
<S>                                                                                                            <C>
ARTICLE I
 Definitions
         Section 1.01      DEFINITIONS............................................................................2
         Section 1.02      INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT......................................2
         Section 1.03      RULES OF CONSTRUCTION..................................................................2

Bonds
         Section 2.01      FORM...................................................................................4
         Section 2.02      EXECUTION, AUTHENTICATION AND DELIVERY.................................................4
         Section 2.03      ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE......................................4
         Section 2.04      ACCEPTANCE OF DERIVATIVE CONTRACTS AND SPECIAL CERTIFICATE CAP CONTRACT BY
         INDENTURE TRUSTEE........................................................................................6

Covenants
         Section 3.01      COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE LOANS..............................7
         Section 3.02      MAINTENANCE OF OFFICE OR AGENCY........................................................7
         Section 3.03      MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT...................................7
         Section 3.04      EXISTENCE..............................................................................8
         Section 3.05      PAYMENT OF PRINCIPAL AND INTEREST......................................................9
         Section 3.06      PROTECTION OF TRUST ESTATE............................................................11
         Section 3.07      OPINIONS AS TO TRUST ESTATE...........................................................12
         Section 3.08      PERFORMANCE OF OBLIGATIONS............................................................12
         Section 3.09      NEGATIVE COVENANTS....................................................................13
         Section 3.10      ANNUAL STATEMENT AS TO COMPLIANCE.....................................................14
         Section 3.11      REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOANS..........................14
         Section 3.12      AMENDMENTS TO SERVICING AGREEMENT.....................................................14
         Section 3.13      MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE..........................14
         Section 3.14      INVESTMENT COMPANY ACT................................................................14
         Section 3.15      ISSUER MAY CONSOLIDATE, ETC...........................................................15
         Section 3.16      SUCCESSOR OR TRANSFEREE...............................................................16
         Section 3.17      NO OTHER BUSINESS.....................................................................17
         Section 3.18      NO BORROWING..........................................................................17
         Section 3.19      GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.....................................17
         Section 3.20      CAPITAL EXPENDITURES..................................................................17
         Section 3.21      DETERMINATION OF BOND INTEREST RATE...................................................17
         Section 3.22      RESTRICTED PAYMENTS...................................................................17
         Section 3.23      NOTICE OF EVENTS OF DEFAULT...........................................................18
         Section 3.24      FURTHER INSTRUMENTS AND ACTS..........................................................18

                                                         i

<PAGE>

         Section 3.25      STATEMENTS TO BONDHOLDERS.............................................................18
         Section 3.26      CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE....................................18
         Section 3.27      REPLACEMENT DERIVATIVE CONTRACTS......................................................19
         Section 3.28      ALLOCATION OF REALIZED LOSSES.........................................................19

The Bonds; Satisfaction and Discharge of Indenture
         Section 4.01      THE BONDS.............................................................................21
         Section 4.02      REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF BONDS;
         APPOINTMENT OF BOND REGISTRAR AND CERTIFICATE REGISTRAR.................................................21
         Section 4.03      MUTILATED, DESTROYED, LOST OR STOLEN BONDS............................................22
         Section 4.04      PERSONS DEEMED OWNERS.................................................................23
         Section 4.05      CANCELLATION..........................................................................23
         Section 4.06      BOOK-ENTRY BONDS......................................................................23
         Section 4.07      NOTICES TO DEPOSITORY.................................................................24
         Section 4.08      DEFINITIVE BONDS......................................................................24
         Section 4.09      TAX TREATMENT.........................................................................25
         Section 4.10      SATISFACTION AND DISCHARGE OF INDENTURE...............................................25
         Section 4.11      APPLICATION OF TRUST MONEY............................................................26
         Section 4.12      [RESERVED]............................................................................26
         Section 4.13      REPAYMENT OF MONIES HELD BY PAYING AGENT..............................................26
         Section 4.14      TEMPORARY BONDS.......................................................................26
         Section 4.15      REPRESENTATION REGARDING ERISA........................................................27

ARTICLE V

Default and Remedies
         Section 5.01      EVENTS OF DEFAULT.....................................................................28
         Section 5.02      ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT....................................28
         Section 5.03      COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE
          .......................................................................................................29
         Section 5.04      REMEDIES; PRIORITIES..................................................................31
         Section 5.05      OPTIONAL PRESERVATION OF THE TRUST ESTATE.............................................32
         Section 5.06      LIMITATION OF SUITS...................................................................33
         Section 5.07      UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND INTEREST
          .......................................................................................................33
         Section 5.08      RESTORATION OF RIGHTS AND REMEDIES....................................................34
         Section 5.09      RIGHTS AND REMEDIES CUMULATIVE........................................................34
         Section 5.10      DELAY OR OMISSION NOT A WAIVER........................................................34
         Section 5.11      CONTROL BY BONDHOLDERS................................................................34
         Section 5.12      WAIVER OF PAST DEFAULTS...............................................................34
         Section 5.13      UNDERTAKING FOR COSTS.................................................................35
         Section 5.14      WAIVER OF STAY OR EXTENSION LAWS......................................................35
         Section 5.15      SALE OF TRUST ESTATE..................................................................35
         Section 5.16      ACTION ON BONDS.......................................................................37
         Section 5.17      PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS....................................37

                                                        ii

<PAGE>

ARTICLE VI

The Indenture Trustee
         Section 6.01      DUTIES OF INDENTURE TRUSTEE...........................................................39
         Section 6.02      RIGHTS OF INDENTURE TRUSTEE...........................................................40
         Section 6.03      INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE................................................41
         Section 6.04      INDENTURE TRUSTEE'S DISCLAIMER........................................................41
         Section 6.05      NOTICE OF EVENT OF DEFAULT............................................................41
         Section 6.06      REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX ADMINISTRATION........................41
         Section 6.07      COMPENSATION AND INDEMNITY............................................................41
         Section 6.08      REPLACEMENT OF INDENTURE TRUSTEE......................................................42
         Section 6.09      SUCCESSOR INDENTURE TRUSTEE BY MERGER.................................................43
         Section 6.10      APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE.....................43
         Section 6.11      ELIGIBILITY; DISQUALIFICATION.........................................................44
         Section 6.12      PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER......................................44
         Section 6.13      REPRESENTATIONS AND WARRANTIES........................................................44
         Section 6.14      DIRECTIONS TO INDENTURE TRUSTEE.......................................................45
         Section 6.15      THE AGENTS............................................................................45

ARTICLE VII

Bondholders' Lists and Reports
         Section 7.01      ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS
          .......................................................................................................46
         Section 7.02      PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS............................46
         Section 7.03      REPORTS OF ISSUER.....................................................................46
         Section 7.04      REPORTS BY INDENTURE TRUSTEE..........................................................47
         Section 7.05      STATEMENTS TO BONDHOLDERS.............................................................47

ARTICLE VIII

Accounts, Disbursements and Releases
         Section 8.01      COLLECTION OF MONEY...................................................................50
         Section 8.02      TRUST ACCOUNTS........................................................................50
         Section 8.03      OFFICER'S CERTIFICATE.................................................................50
         Section 8.04      TERMINATION UPON DISTRIBUTION TO BONDHOLDERS..........................................51
         Section 8.05      RELEASE OF TRUST ESTATE...............................................................51
         Section 8.06      SURRENDER OF BONDS UPON FINAL PAYMENT.................................................51
         Section 8.07      OPTIONAL REDEMPTION OF THE BONDS......................................................51

ARTICLE IX

Supplemental Indentures
         Section 9.01      SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS................................53
         Section 9.02      SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS...................................54
         Section 9.03      EXECUTION OF SUPPLEMENTAL INDENTURES..................................................55

                                                        iii

<PAGE>

         Section 9.04      EFFECT OF SUPPLEMENTAL INDENTURE......................................................56
         Section 9.05      CONFORMITY WITH TRUST INDENTURE ACT...................................................56
         Section 9.06      REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.........................................56

ARTICLE X

Miscellaneous
         Section 10.01     COMPLIANCE CERTIFICATES AND OPINIONS, ETC.............................................57
         Section 10.02     FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE......................................58
         Section 10.03     ACTS OF BONDHOLDERS...................................................................59
         Section 10.04     NOTICES ETC., TO INDENTURE TRUSTEE ISSUER AND RATING AGENCIES.........................59
         Section 10.05     NOTICES TO BONDHOLDERS; WAIVER........................................................60
         Section 10.06     CONFLICT WITH TRUST INDENTURE ACT.....................................................60
         Section 10.07     EFFECT OF HEADINGS....................................................................61
         Section 10.09     SEPARABILITY..........................................................................61
         Section 10.10     [RESERVED.............................................................................61
         Section 10.11     LEGAL HOLIDAYS........................................................................61
         Section 10.12     GOVERNING LAW.........................................................................61
         Section 10.13     COUNTERPARTS..........................................................................61
         Section 10.14     RECORDING OF INDENTURE................................................................61
         Section 10.15     ISSUER OBLIGATION.....................................................................61
         Section 10.16     NO PETITION...........................................................................62
         Section 10.17     INSPECTION............................................................................62
</TABLE>

                  EXHIBITS

         Exhibit A- 1     --        Form of Class A Bonds
         Exhibit A- 2     --        Form of Class M and Class B Bonds
         Exhibit B        --        Mortgage Loan Schedule
         Exhibit C        --        Form of Initial Certification
         Exhibit D        --        Form of Final Certification
         Exhibit E        --        Derivative Contracts
         Exhibit F        --        Special Certificate Cap Contract

         Appendix A        --        Definitions

                                                        iv

<PAGE>

                  This Indenture, dated as of April 30, 2003, is entered into
between Impac CMB Trust Series 2003-5, a Delaware statutory trust, as Issuer
(the "Issuer"), and Deutsche Bank National Trust Company, a national banking
association, as Indenture Trustee (the "Indenture Trustee").

                                WITNESSETH THAT:

                  Each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Issuer's
Collateralized Asset-Backed Bonds, Series 2003-5 (the "Bonds").

                                 GRANTING CLAUSE

                  The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, as trustee for the benefit of the Holders of the Bonds, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created by (a) the Mortgage Loans, Eligible Substitute Mortgage Loans and the
proceeds thereof and all rights under the Related Documents; (b) all funds on
deposit from time to time in the Collection Account allocable to the Mortgage
Loans excluding any investment income from such funds; (c) all funds on deposit
from time to time in the Payment Account and in all proceeds thereof; (d) all
rights under (i) the Mortgage Loan Sale and Contribution Agreement as assigned
to the Issuer, (ii) the Servicing Agreement and any Subservicing Agreements,
(iii) any title, hazard and primary insurance policies with respect to the
Mortgaged Properties and (iv) the rights with respect to the Derivative
Contracts and the Special Certificate Cap Contract as assigned to the Issuer;
and (e) all present and future claims, demands, causes and choses in action in
respect of any or all of the foregoing and all payments on or under, and all
proceeds of every kind and nature whatsoever in respect of, any or all of the
foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in the conversion thereof, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing (collectively, the "Trust Estate" or the
"Collateral").

                  The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Bonds, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.

                  The Indenture Trustee, as trustee on behalf of the Holders of
the Bonds, acknowledges such Grant, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.

<PAGE>

                                    ARTICLE I

                                   Definitions

         Section 1.01 DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.

         Section 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture Act (the
"TIA"), the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:

                  "Commission" means the Securities and Exchange Commission.

                  "indenture securities" means the Bonds.

                  "indenture security holder" means a Bondholder.

                  "indenture to be qualified" means this Indenture.

                  "indenture trustee" or "institutional trustee" means the
         Indenture Trustee.

                  "obligor" on the indenture securities means the Issuer and any
         other obligor on the indenture securities.

         All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rules and
have the meanings assigned to them by such definitions.

         Section 1.03 RULES OF CONSTRUCTION. Unless the context otherwise
requires:

                           (i) a term has the meaning assigned to it;

                           (ii) an accounting term not otherwise defined has the
         meaning assigned to it in accordance with generally accepted accounting
         principles as in effect from time to time;

                           (iii) "or" is not exclusive;

                           (iv) "including" means including without limitation;

                           (v) words in the singular include the plural and
         words in the plural include the singular; and

                                        2

<PAGE>

                           (vi) any agreement, instrument or statute defined or
         referred to herein or in any instrument or certificate delivered in
         connection herewith means such agreement, instrument or statute as from
         time to time amended, modified or supplemented and includes (in the
         case of agreements or instruments) references to all attachments
         thereto and instruments incorporated therein; references to a Person
         are also to its permitted successors and assigns.

                                        3

<PAGE>

                                   ARTICLE II

                           Original Issuance of Bonds

         Section 2.01 FORM. The Class A Bonds, Class M Bonds and Class B Bonds,
together with the Indenture Trustee's certificate of authentication, shall be in
substantially the form set forth in Exhibits A-1 and A-2 to this Indenture,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture.

         The Bonds shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders).

         The terms of the Bonds set forth in Exhibits A-1 and A-2 to this
Indenture are part of the terms of this Indenture.

         Section 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. The Bonds shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Bonds may be manual or
facsimile.

         Bonds bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Bonds or did not hold
such offices at the date of such Bonds.

         The Indenture Trustee shall upon Issuer Request authenticate and
deliver the Class A-1, Class A-2, Class M-1, Class M-2 and Class B Bonds for
original issue in an aggregate initial principal amount of $298,500,000. The
Class A-1 Bonds shall be issued in an aggregate initial principal amount of
$228,900,000, the Class A-2 Bonds shall be issued in an aggregate initial
principal amount of $14,850,000, the Class M-1 Bonds shall be issued in an
aggregate initial principal amount of $22,500,000, the Class M-2 Bonds shall be
issued in an aggregate initial principal amount of $17,250,000 and the Class B
Bonds shall be issued in an aggregate initial principal amount of $15,000,000.

         Each of the Bonds shall be dated the date of its authentication. The
Bonds shall be issuable as registered Bonds and the Bonds shall be issuable in
the minimum initial Bond Principal Balances of $25,000 and in integral multiples
of $1 in excess thereof.

         No Bond shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Bond a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Bond shall be conclusive
evidence, and the only evidence, that such Bond has been duly authenticated and
delivered hereunder.

         Section 2.03 ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE. (a) The
Indenture Trustee acknowledges receipt of, subject to the exceptions it notes
pursuant to the procedures described below, the documents (or certified copies
thereof) referred to in Section 2.1(b) of the

                                        4

<PAGE>

Mortgage Loan Sale and Contribution Agreement, and declares that it holds and
will continue to hold those documents and any amendments, replacements or
supplements thereto and all other assets of the Trust Estate as Indenture
Trustee in trust for the use and benefit of all present and future Holders of
the Bonds. No later than 45 days after the Closing Date, (or, with respect to
any Eligible Substitute Mortgage Loan, within 5 days after the receipt by the
Indenture Trustee thereof and, with respect to any documents received beyond 45
days after the Closing Date, promptly thereafter), the Indenture Trustee agrees,
for the benefit of the Bondholders, to review 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 Initial Certification in the form annexed hereto as
Exhibit C. In conducting such review, the Indenture Trustee will ascertain
whether all required documents described in Section 2.1(b) of the Mortgage Loan
Sale and Contribution Agreement, have been executed and received and whether
those documents relate, determined on the basis of the Mortgagor name, original
principal balance and loan number, to the Mortgage Loans it has received, as
identified in Exhibit B to this Indenture, as supplemented (PROVIDED, HOWEVER,
that with respect to those documents described in subclause (b)(vii) of such
section, the Indenture Trustee's obligations shall extend only to documents
actually delivered pursuant to such subclause). In performing any such review,
the Indenture Trustee may conclusively rely on the purported due execution and
genuineness of any such document and on the purported genuineness of any
signature thereon. If the Indenture Trustee finds any document constituting part
of the Mortgage File not to have been executed or received, or to be unrelated
to the Mortgage Loans identified in Exhibit B to this Indenture or to appear to
be defective on its face, the Indenture Trustee shall promptly notify the Seller
of such finding and the Seller's obligation to cure such defect or repurchase or
substitute for the related Mortgage Loan. To the extent the Indenture Trustee
has not received a Mortgage File with respect to any of the Mortgage Loans by
the Closing Date, the Indenture Trustee shall not require the deposit of cash
into the Payment Account or any other account to cover the amount of that
Mortgage Loan and shall solely treat such Mortgage Loan as if it were in breach
of a representation or warranty; provided that the aggregate Stated Principal
Balance of such Mortgage Loans does not exceed 1% of the Cut-off Date Balance.

         (b) No later than 180 days after the Closing Date, the Indenture
Trustee will review, for the benefit of the Bondholders, the Mortgage Files and
will execute and deliver or cause to be executed and delivered to the Seller, a
Final Certification in the form annexed hereto as Exhibit D. In conducting such
review, the Indenture Trustee will ascertain whether an original of each
document described in subclauses (b)(ii)-(iv) of Section 2.1 of the Mortgage
Loan Sale and Contribution Agreement, with respect to the Initial Mortgage
Loans, 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 Indenture Trustee finds any document constituting part
of the Mortgage File has not been received, or to be unrelated, determined on
the basis of the Mortgagor name, original principal balance and loan number, to
the Mortgage Loans identified in Exhibit B to this Indenture or to appear
defective on its face, the Indenture Trustee shall promptly notify the Seller.

         (c) Upon deposit of the Repurchase Price in the Payment Account, the
Indenture Trustee shall release to the Seller the related Mortgage File and
shall execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by the Seller as are necessary to vest in the Seller
title to and rights under the related Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which certification of the deposit of the
Repurchase Price in the Payment

                                        5

<PAGE>

Account was received by the Indenture Trustee. The Indenture Trustee shall amend
the applicable Mortgage Loan Schedule to reflect such repurchase and shall
promptly notify the Master Servicer and the Rating Agencies of such amendment.

         Section 2.04 ACCEPTANCE OF DERIVATIVE CONTRACTS AND SPECIAL CERTIFICATE
CAP CONTRACT BY INDENTURE TRUSTEE. (a) The Indenture Trustee acknowledges
receipt of the Derivative Contracts and the Special Certificate Cap Contract and
declares that it holds and will continue to hold these documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Estate as Indenture Trustee in trust for the use and benefit of all
present and future Holders of the Bonds. The Indenture Trustee shall enforce the
Derivative Contracts and the Special Certificate Cap Contract in accordance with
their terms.

                                        6

<PAGE>

                                   ARTICLE III

                                    Covenants

         Section 3.01 COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE LOANS.
The Indenture Trustee shall establish and maintain an Eligible Account (the
"Payment Account") in which the Indenture Trustee shall, subject to the terms of
this paragraph, deposit, on the same day as it is received from the Master
Servicer, each remittance received by the Indenture Trustee with respect to the
Mortgage Loans. The Indenture Trustee shall make all payments of principal of
and interest on the Bonds, subject to Section 3.03 as provided in Section 3.05
herein from monies on deposit in the Payment Account.

         Section 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
an office or agency where, subject to satisfaction of conditions set forth
herein, Bonds may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Bonds and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders may be made at
the office of the Indenture Trustee located at c/o DTC Transfer Services, 55
Water Street, Jeanette Park Entrance, New York, New York 10041, and notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.

         Section 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT. (a)
As provided in Section 3.01, all payments of amounts due and payable with
respect to any Bonds that are to be made from amounts withdrawn from the Payment
Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Payment Account for payments of Bonds shall be paid over to the Issuer except as
provided in this Section 3.03. The Issuer hereby appoints the Indenture Trustee
as its Paying Agent.

         The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:

                        (i) hold all sums held by it for the payment of amounts
         due with respect to the Bonds in trust for the benefit of the Persons
         entitled thereto until such sums shall be paid to such Persons or
         otherwise disposed of as herein provided and pay such sums to such
         Persons as herein provided;

                       (ii) give the Indenture Trustee notice of any default by
         the Issuer of which it has actual knowledge in the making of any
         payment required to be made with respect to the Bonds;

                                        7

<PAGE>

                      (iii) at any time during the continuance of any such
         default, upon the written request of the Indenture Trustee, forthwith
         pay to the Indenture Trustee all sums so held in trust by such Paying
         Agent;

                       (iv) immediately resign as Paying Agent and forthwith pay
         to the Indenture Trustee all sums held by it in trust for the payment
         of Bonds if at any time it ceases to meet the standards required to be
         met by a Paying Agent at the time of its appointment;

                        (v) comply with all requirements of the Code with
         respect to the withholding from any payments made by it on any Bonds of
         any applicable withholding taxes imposed thereon and with respect to
         any applicable reporting requirements in connection therewith; and

                       (vi) not commence a bankruptcy proceeding against the
         Issuer in connection with this Indenture.

         The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.

         Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Bond and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Bond shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper published in the English language, notice that such
money remains unclaimed and that, after a date specified therein which shall not
be less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer. The Indenture Trustee
may also adopt and employ, at the expense and direction of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Bonds have been called but
have not been surrendered for redemption or whose right to or interest in monies
due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for each
such Holder).

         Section 3.04 EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and

                                       8
<PAGE>

franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Bonds, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.

         Section 3.05 PAYMENT OF PRINCIPAL AND INTEREST. (a) On each Payment
Date from amounts on deposit in the Payment Account in accordance with Section
8.02 hereof, the Indenture Trustee shall pay to the Persons specified in clauses
(b) and (c) below, to the extent provided therein, the Available Funds for such
Payment Date.

         (b) On each Payment Date, the Available Funds shall be distributed in
the following order of priority, in each case to the extent of the Available
Funds remaining for such Payment Date:

                           (i) to the Holders of the Class A-1 Bonds, the
         related Accrued Bond Interest for such Class for such Payment Date;

                           (ii) to the Holders of the Class A-2 Bonds, the
         related Accrued Bond Interest for such Class for such Payment Date;

                           (iii) to the Holders of the Class M-1 Bonds, the
         related Accrued Bond Interest for such Class for such Payment Date;

                           (iv) to the Holders of the Class M-2 Bonds, the
         related Accrued Bond Interest for such Class for such Payment Date; and

                           (v) to the Holders of the Class B Bonds, the related
         Accrued Bond Interest for such Class for such Payment Date.

         (c) On each Payment Date, the Holders of each Class of Bonds shall be
entitled to receive payments in respect of principal to the extent of the
Principal Distribution Amount on a pro rata basis, based on the Bond Principal
Balance thereof, in reduction of the Bond Principal Balance thereof, until the
Bond Principal Balances thereof have been reduced to zero. An allocation of
principal distributions on a "pro rata" basis among various Classes of Bonds
means an allocation to each of those Classes of Bonds on the basis of its then
outstanding Bond Principal Balance prior to giving effect to distributions to be
made on that Payment Date.

         (d) On each Payment Date, any Net Monthly Excess Cashflow shall be paid
as follows:

                           (i) to the Holders of the Class or Classes of Bonds
         then entitled to receive payments in respect of principal, in an amount
         equal to any Extra Principal Distribution Amount, payable to such
         Holders as part of the Principal Distribution Amount as described in
         clause (c) above;

                           (ii) to the Holders of the Class A-1 Bonds, Class A-2
         Bonds, Class M-1 Bonds, Class M-2 Bonds and Class B Bonds, in that
         order, in an amount equal to the Unpaid

                                       9
<PAGE>

         Interest Shortfall for such Bonds on that Payment Date, to the extent
         not previously reimbursed;

                   (iii) to the Holders of the Class A-2 Bonds, Class
         M-1 Bonds, Class M-2 Bonds and Class B Bonds, in that order, in an
         amount equal to the Allocated Realized Loss Amount for such Bonds on
         such Payment Date, to the extent not previously reimbursed;

                           (iv) to the holders of the Class A-1 Bonds, Class A-2
         Bonds, Class M-1 Bonds, Class M-2 Bonds and Class B Bonds, in that
         order, any Basis Risk Shortfall Carry- Forward Amount for such Bonds on
         such Payment Date, to the extent not covered by the Derivative
         Contracts;

                           (v) to the Indenture Trustee for amounts owed the
         Indenture Trustee hereunder (other than the Indenture Trustee Fee)
         remaining unpaid; and

                           (vi) any remaining amounts will be distributed to the
         Certificate Paying Agent, as designee of the Issuer, for the benefit of
         the Holders of the Trust Certificates.

         (e) On each Payment Date, the Net Derivative Contract Payment Amount
with respect to such Payment Date shall be distributed in the following order of
priority, in each case to the extent of amounts available:

                           (i) to the Holders of the Class A-1 Bonds, Class A-2
         Bonds, Class M-1 Bonds, Class M-2 Bonds and Class B Bonds, in that
         order, any related Basis Risk Shortfall Carry-Forward Amount for such
         Payment Date; and

                           (ii) any remaining amounts will be distributed to the
         Certificate Paying Agent, as designee of the Issuer, for the benefit of
         the Holders of the Trust Certificates.

         (f) On each Payment Date any amounts received in respect of the Special
Certificate Cap Contract shall be distributed to the Certificate Paying Agent,
as designee of the Issuer, for the benefit of the Holders of the Trust
Certificates.

         (g) Each distribution with respect to a Book-Entry Bond shall be paid
to the Depository, as Holder thereof, and the Depository shall be responsible
for crediting the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the Bond
Owners that it represents and to each indirect participating brokerage firm (a
"brokerage firm" or "indirect participating firm") for which it acts as agent.
Each brokerage firm shall be responsible for disbursing funds to the Bond Owners
that it represents. None of the Indenture Trustee, the Bond Registrar, the
Paying Agent, the Depositor or the Master Servicer shall have any responsibility
therefor except as otherwise provided by this Indenture or applicable law.

         (h) On each Payment Date, the Certificate Paying Agent shall deposit in
the Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds to the
Certificateholders.

                                       10
<PAGE>

         (i) Any installment of interest or principal, if any, payable on any
Bond that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall, if such Holder shall have so requested at least
five Business Days prior to the related Record Date, be paid to each Holder of
record on the preceding Record Date, by wire transfer to an account specified in
writing by such Holder reasonably satisfactory to the Indenture Trustee as of
the preceding Record Date or in all other cases or if no such instructions have
been delivered to the Indenture Trustee, by check to such Bondholder mailed to
such Holder's address as it appears in the Bond Register in the amount required
to be distributed to such Holder on such Payment Date pursuant to such Holder's
Bonds; PROVIDED, HOWEVER, that the Indenture Trustee shall not pay to such
Holders any amount required to be withheld from a payment to such Holder by the
Code.

         (j) The principal of each Bond shall be due and payable in full on the
Final Scheduled Payment Date for such Bond as provided in the forms of Bond set
forth in Exhibits A-1 and A-2 to this Indenture. All principal payments on the
Bonds shall be made to the Bondholders entitled thereto in accordance with the
Percentage Interests represented by such Bonds. Upon notice to the Indenture
Trustee by the Issuer, the Indenture Trustee shall notify the Person in whose
name a Bond is registered at the close of business on the Record Date preceding
the Final Scheduled Payment Date or other final Payment Date (including any
final Payment Date resulting from any redemption pursuant to Section 8.07
hereof). Such notice shall to the extent practicable be mailed no later than
five Business Days prior to such Final Scheduled Payment Date or other final
Payment Date and shall specify that payment of the principal amount and any
interest due with respect to such Bond at the Final Scheduled Payment Date or
other final Payment Date will be payable only upon presentation and surrender of
such Bond and shall specify the place where such Bond may be presented and
surrendered for such final payment. No interest shall accrue on the Bonds on or
after the Final Scheduled Payment Date or any such other final Payment Date.

         The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.05 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.

         Section 3.06 PROTECTION OF TRUST ESTATE. (a) The Issuer will from time
to time prepare, execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:

                           (i) maintain or preserve the lien and security
         interest (and the priority thereof) of this Indenture or carry out more
         effectively the purposes hereof;

                           (ii) perfect, publish notice of or protect the
         validity of any Grant made or to be made by this Indenture;

                           (iii) cause the Issuer or Master Servicer to enforce
         any of the rights to the Mortgage Loans; or

                                       11
<PAGE>

                           (iv) preserve and defend title to the Trust Estate
         and the rights of the Indenture Trustee and the Bondholders in such
         Trust Estate against the claims of all persons and parties.

         (b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove any portion of the Trust Estate that consists of money
or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.07 hereof (or from the jurisdiction in
which it was held as described in the Opinion of Counsel delivered on the
Closing Date pursuant to Section 3.07(a) hereof, or if no Opinion of Counsel has
yet been delivered pursuant to Section 3.07(b) hereof, unless the Indenture
Trustee shall have first received an Opinion of Counsel to the effect that the
lien and security interest created by this Indenture with respect to such
property will continue to be maintained after giving effect to such action or
actions).

         The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.06 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.

         Section 3.07 OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and first
priority security interest in the Collateral and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and first priority security interest effective.

         (b) On or before April 15 in each calendar year, beginning in 2004, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re- recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and first priority security interest in the Collateral and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Collateral until December 31
in the following calendar year.

         Section 3.08 PERFORMANCE OF OBLIGATIONS. (a) The Issuer will punctually
perform and observe all of its obligations and agreements contained in this
Indenture, the Basic Documents and in the instruments and agreements included in
the Trust Estate.

                                       12
<PAGE>

         (b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer.

         (c) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Mortgage
Loans or under any instrument included in the Trust Estate, or which would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any of the documents relating to
the Mortgage Loans or any such instrument, except such actions as the Master
Servicer is expressly permitted to take in the Servicing Agreement. The
Indenture Trustee, as pledgee of the Mortgage Loans, may exercise the rights of
the Issuer to direct the actions of the Master Servicer pursuant to the
Servicing Agreement.

         (d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.

         Section 3.09 NEGATIVE COVENANTS. So long as any Bonds are Outstanding,
the Issuer shall not:

                           (i) except as expressly permitted by this Indenture,
         sell, transfer, exchange or otherwise dispose of the Trust Estate,
         unless directed to do so by the Indenture Trustee;

                           (ii) claim any credit on, or make any deduction from
         the principal or interest payable in respect of, the Bonds (other than
         amounts properly withheld from such payments under the Code) or assert
         any claim against any present or former Bondholder by reason of the
         payment of the taxes levied or assessed upon any part of the Trust
         Estate;

                           (iii) (A) permit the validity or effectiveness of
         this Indenture to be impaired, or permit the lien of this Indenture to
         be amended, hypothecated, subordinated, terminated or discharged, or
         permit any Person to be released from any covenants or obligations with
         respect to the Bonds under this Indenture except as may be expressly
         permitted hereby, (B) permit any lien, charge, excise, claim, security
         interest, mortgage or other encumbrance (other than the lien of this
         Indenture) to be created on or extend to or otherwise arise upon or
         burden the Trust Estate or any part thereof or any interest therein or
         the proceeds thereof or (C) permit the lien of this Indenture not to
         constitute a valid first priority security interest in the Trust
         Estate; or

                           (iv) waive or impair, or fail to assert rights under,
         the Mortgage Loans, or impair or cause to be impaired the Issuer's
         interest in the Mortgage Loans, the Mortgage Loan Sale and Contribution
         Agreement or in any Basic Document, if any such action would materially
         and adversely affect the interests of the Bondholders.

                                       13
<PAGE>

         Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Indenture Trustee, by March 1 of each year commencing with the calendar
year 2004, an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that:

                           (i) a review of the activities of the Issuer during
         the previous calendar year and of its performance under this Indenture
         has been made under such Authorized Officer's supervision; and

                           (ii) to the best of such Authorized Officer's
         knowledge, based on such review, the Issuer has complied with all
         conditions and covenants under this Indenture throughout such year, or,
         if there has been a default in its compliance with any such condition
         or covenant, specifying each such default known to such Authorized
         Officer and the nature and status thereof.

         Section 3.11 REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE
LOANS. The Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit
of the representations and warranties made by the Seller in the Mortgage Loan
Sale and Contribution Agreement concerning the Seller and the Mortgage Loans to
the same extent as though such representations and warranties were made directly
to the Indenture Trustee. If a Responsible Officer of the Indenture Trustee has
actual knowledge of any breach of any representation or warranty made by the
Seller in the Mortgage Loan Sale and Contribution Agreement, the Indenture
Trustee shall promptly notify the Seller of such finding and the Seller's
obligation to cure such defect or repurchase or substitute for the related
Mortgage Loan.

         Section 3.12 AMENDMENTS TO SERVICING AGREEMENT. The Issuer covenants
with the Indenture Trustee that it will not enter into any amendment or
supplement to the Servicing Agreement without the prior written consent of the
Indenture Trustee.

         Section 3.13 MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE
TRUSTEE. Solely for purposes of perfection under Section 9-305 of the Uniform
Commercial Code or other similar applicable law, rule or regulation of the state
in which such property is held by the Master Servicer, the Issuer and the
Indenture Trustee hereby acknowledge that the Master Servicer is acting as
bailee of the Indenture Trustee in holding amounts on deposit in the Collection
Account, as well as its bailee in holding any Related Documents released to the
Master Servicer, and any other items constituting a part of the Trust Estate
which from time to time come into the possession of the Master Servicer. It is
intended that, by the Master Servicer's acceptance of such bailee arrangement,
the Indenture Trustee, as a secured party of the Mortgage Loans, will be deemed
to have possession of such Related Documents, such monies and such other items
for purposes of Section 9-305 of the Uniform Commercial Code of the state in
which such property is held by the Master Servicer. The Indenture Trustee shall
not be liable with respect to such documents, monies or items while in
possession of the Master Servicer.

         Section 3.14 INVESTMENT COMPANY ACT. The Issuer shall not become an
"investment company" or be under the "control" of an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term

                                       14
<PAGE>

"investment company" but also any available exceptions to such general
definition); PROVIDED, HOWEVER, that the Issuer shall be in compliance with this
Section 3.15 if it shall have obtained an order exempting it from regulation as
an "investment company" so long as it is in compliance with the conditions
imposed in such order.

         Section 3.15 ISSUER MAY CONSOLIDATE, ETC. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:

                           (i) the Person (if other than the Issuer) formed by
         or surviving such consolidation or merger shall be a Person organized
         and existing under the laws of the United States of America or any
         state or the District of Columbia and shall expressly assume, by an
         indenture supplemental hereto, executed and delivered to the Indenture
         Trustee, in form reasonably satisfactory to the Indenture Trustee, the
         due and punctual payment of the principal of and interest on all Bonds,
         and all other amounts payable to the Indenture Trustee and the
         Derivative Contract Counterparty, the payment to the Certificate Paying
         Agent of all amounts due to the Certificateholders, and the performance
         or observance of every agreement and covenant of this Indenture on the
         part of the Issuer to be performed or observed, all as provided herein;

                           (ii) immediately after giving effect to such
         transaction, no Event of Default shall have occurred and be continuing;

                           (iii) the Rating Agencies shall have notified the
         Issuer that such transaction shall not cause the rating of the Bonds to
         be reduced, suspended or withdrawn or to be considered by either Rating
         Agency to be below investment grade;

                           (iv) the Issuer shall have received an Opinion of
         Counsel (and shall have delivered a copy thereof to the Indenture
         Trustee) to the effect that such transaction will not (A) result in a
         "significant modification" of the Bonds under Treasury Regulation
         section 1.1001-3, or adversely affect the status of the Bonds as
         indebtedness for federal income tax purposes, or (B) if 100% of the
         Certificates are not owned by IMH Assets Corp., cause the Trust to be
         subject to an entity level tax for federal income tax purposes;

                           (v) any action that is necessary to maintain the lien
         and security interest created by this Indenture shall have been taken;
         and

                           (vi) the Issuer shall have delivered to the Indenture
         Trustee an Officer's Certificate and an Opinion of Counsel each stating
         that such consolidation or merger and such supplemental indenture
         comply with this Article III and that all conditions precedent herein
         provided for or relating to such transaction have been complied with
         (including any filing required by the Exchange Act), and that such
         supplemental indenture is enforceable.

         (b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:

                                       15
<PAGE>

                           (i) the Person that acquires by conveyance or
         transfer the properties and assets of the Issuer, the conveyance or
         transfer of which is hereby restricted, shall (A) be a United States
         citizen or a Person organized and existing under the laws of the United
         States of America or any state thereof, (B) expressly assume, by an
         indenture supplemental hereto, executed and delivered to the Indenture
         Trustee, in form satisfactory to the Indenture Trustee, the due and
         punctual payment of the principal of and interest on all Bonds and the
         payment of all other amounts payable to the Derivative Contract
         Counterparty and the performance or observance of every agreement and
         covenant of this Indenture on the part of the Issuer to be performed or
         observed, all as provided herein, (C) expressly agree by means of such
         supplemental indenture that all right, title and interest so conveyed
         or transferred shall be subject and subordinate to the rights of the
         Holders of the Bonds, (D) unless otherwise provided in such
         supplemental indenture, expressly agree to indemnify, defend and hold
         harmless the Issuer and the Indenture Trustee against and from any
         loss, liability or expense arising under or related to this Indenture
         and the Bonds and (E) expressly agree by means of such supplemental
         indenture that such Person (or if a group of Persons, then one
         specified Person) shall make all filings with the Commission (and any
         other appropriate Person) required by the Exchange Act in connection
         with the Bonds;

                           (ii) immediately after giving effect to such
         transaction, no Default or Event of Default shall have occurred and be
         continuing;

                           (iii) the Rating Agencies shall have notified the
         Issuer that such transaction shall not cause the rating of the Bonds to
         be reduced, suspended or withdrawn;

                           (iv) the Issuer shall have received an Opinion of
         Counsel (and shall have delivered a copy thereof to the Indenture
         Trustee) to the effect that such transaction will not (A) result in a
         "significant modification" of the Bonds under Treasury Regulation
         section 1.1001-3, or adversely affect the status of the Bonds as
         indebtedness for federal income tax purposes, or (B) if 100% of the
         Certificates are not owned by IMH Assets Corp., cause the Trust to be
         subject to an entity level tax for federal income tax purposes;

                           (v) any action that is necessary to maintain the lien
         and security interest created by this Indenture shall have been taken;
         and

                           (vi) the Issuer shall have delivered to the Indenture
         Trustee an Officer's Certificate and an Opinion of Counsel each stating
         that such conveyance or transfer and such supplemental indenture comply
         with this Article III and that all conditions precedent herein provided
         for relating to such transaction have been complied with (including any
         filing required by the Exchange Act).

         Section 3.16 SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.16(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.

                                       16
<PAGE>

         (b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.16(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Bonds immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer and approval of
such transaction given by the Indenture Trustee.

         Section 3.17 NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Mortgage Loans and the issuance of the Bonds and Certificates in the manner
contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.

         Section 3.18 NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Bonds under this Indenture.

         Section 3.19 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by this Indenture or the Basic Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.

         Section 3.20 CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).

         Section 3.21 DETERMINATION OF BOND INTEREST RATE. On each Interest
Determination Date the Indenture Trustee shall determine One-Month LIBOR and the
related Bond Interest Rate for each Class of Bonds for the following Accrual
Period and shall inform the Issuer, the Master Servicer and the Depositor at
their respective facsimile numbers given to the Indenture Trustee in writing
thereof. The establishment of One-Month LIBOR on each Interest Determination
Date by the Indenture Trustee and the Indenture Trustee's calculation of the
rate of interest applicable to each Class of Bonds for the related Accrual
Period shall (in the absence of manifest error) be final and binding.

         Section 3.22 RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; PROVIDED, HOWEVER, that
the Issuer may make, or cause to be made, (x) distributions and payments to the
Owner Trustee, the Indenture Trustee, Bondholders and the Certificateholders as
contemplated by, and to the extent funds are available for such purpose under
this Indenture and the Trust Agreement and (y) payments to the Master Servicer
and the Subservicers pursuant to the terms of the Servicing

                                       17
<PAGE>

Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.

         Section 3.23 NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and under the Trust Agreement.

         Section 3.24 FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.

         Section 3.25 STATEMENTS TO BONDHOLDERS. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall prepare and make available
on the Indenture Trustee's website, https://www.corporatetrust.db.com/invr (or
deliver at the recipient's option), to each Bondholder and Certificateholder the
most recent statement prepared by the Master Servicer pursuant to Section 4.01
of the Servicing Agreement.

         Section 3.26 CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE.

         (a) With respect to that portion of the Collateral described in clauses
(a) through (d) of the definition of Trust Estate, the Issuer represents to the
Indenture Trustee that:

                  (i) This Indenture creates a valid and continuing security
interest (as defined in the applicable UCC) in the Collateral in favor of the
Indenture Trustee, which security interest is prior to all other liens, and is
enforceable as such as against creditors of and purchasers from the Issuer.

                  (ii) The Collateral constitutes "deposit accounts" or
"instruments," as applicable, within the meaning of the applicable UCC.

                  (iii) The Issuer owns and has good and marketable title to the
Collateral, free and clear of any lien, claim or encumbrance of any Person.

                  (iv) The Issuer has taken all steps necessary to cause the
Indenture Trustee to become the account holder of the Collateral.

                  (v) Other than the security interest granted to the Indenture
Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Collateral.

                  (vi) The Collateral is not in the name of any Person other
than the Issuer or the Indenture Trustee. The Issuer has not consented to the
bank maintaining the Collateral to comply with instructions of any Person other
than the Indenture Trustee.

         (b) With respect to that portion of the Collateral described in clauses
(e) and (f), the Issuer represents to the Indenture Trustee that:

                                       18
<PAGE>

                  (i) This Indenture creates a valid and continuing security
interest (as defined in the applicable UCC) in the Collateral in favor of the
Indenture Trustee, which security interest is prior to all other liens, and is
enforceable as such as against creditors of and purchasers from the Issuer.

                  (ii) The Collateral constitutes "general intangibles" within
the meaning of the applicable UCC.

                  (iii) The Issuer owns and has good and marketable title to the
Collateral, free and clear of any lien, claim or encumbrance of any Person.

                  (iv) The Issuer has caused or will have caused, within ten
days, the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law in order to perfect
the security interest in the Collateral granted to the Indenture Trustee
hereunder.

                  (v) Other than the security interest granted to the Indenture
Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Collateral. The
Issuer has not authorized the filing of, and is not aware of any financing
statements against, the Issuer, that include a description of collateral
covering the Collateral, other than any financing statement relating to the
security interest granted to the Indenture Trustee hereunder or that has been
terminated. The Issuer is not aware of any judgment or tax lien filings against
the Issuer.

         (d) The foregoing representations may not be waived and shall survive
the issuance of the Bonds.

         Section 3.27 REPLACEMENT DERIVATIVE CONTRACTS. In the event of a
default by a Derivative Contract Counterparty with respect to the related
Derivative Contracts (a "Derivative Contract Default"), the Issuer, at its
expense, may, but shall not be required to, substitute a new derivative contract
for the existing Derivative Contracts or any other form of similar coverage for
basis risk shortfalls; PROVIDED, HOWEVER, that the timing and mechanism for
receiving payments under such new derivative contracts shall be reasonably
acceptable to the Indenture Trustee. It shall be a condition to substitution of
any new derivative contracts that there be delivered to the Indenture Trustee an
Opinion of Counsel to the effect that such substitution would not (a) result in
a "significant modification" of the Bonds under Treasury Regulation section
1.1001-3, or adversely affect the status of the Bonds as indebtedness for
federal income tax purposes, or (b) if 100% of the Certificates are not owned by
IMH Assets Corp., cause the Trust to be subject to an entity level tax for
federal income tax purposes.

         Section 3.28 ALLOCATION OF REALIZED LOSSES. (a) Prior to each Payment
Date, the Master Servicer shall determine the total amount of Realized Losses
that occurred during the related Prepayment Period, including the High CLTV
Loans (or related REO Properties) which became 180 days delinquent during such
Prepayment Period. The amount of each Realized Loss shall be evidenced by an
Officer's Certificate delivered to the Indenture Trustee with the related
Remittance Report.

                                       19
<PAGE>

         (b) On each Payment Date following the application of all amounts
distributable on such date, to the extent the aggregate Stated Principal Balance
of the Mortgage Loans is less than the aggregate Bond Principal Balances of the
Bonds due to Realized Losses on the Mortgage Loans, FIRST, the Bond Principal
Balances of the Class B Bonds shall be reduced, until the Bond Principal
Balances thereof have been reduced to zero, SECOND, the Bond Principal Balances
of the Class M-2 Bonds shall be reduced, until the Bond Principal Balances
thereof have been reduced to zero, THIRD, the Bond Principal Balances of the
Class M-1 Bonds shall be reduced, until the Bond Principal Balances thereof have
been reduced to zero and FOURTH, the Bond Principal Balances of the Class A-2
Bonds shall be reduced, until the Bond Principal Balances thereof have been
reduced to zero. All Realized Losses allocated to a Class of Bonds will be
allocated in proportion to the Percentage Interests evidenced thereby.

                                       20

<PAGE>

                                   ARTICLE IV

               The Bonds; Satisfaction and Discharge of Indenture

         Section 4.01 THE BONDS. Each Class of Bonds shall be registered in the
name of a nominee designated by the Depository. Beneficial Owners will hold
interests in the Bonds through the book- entry facilities of the Depository in
minimum initial Bond Principal Balances of $25,000 and integral multiples of $1
in excess thereof.

         The Indenture Trustee may for all purposes (including the making of
payments due on the Bonds) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Bonds for the
purposes of exercising the rights of Holders of the Bonds hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Bonds shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08
hereof, Beneficial Owners shall not be entitled to definitive certificates for
the Bonds as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Bonds shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Bondholders and give notice to the
Depository of such record date. Without the consent of the Issuer and the
Indenture Trustee, no Bond may be transferred by the Depository except to a
successor Depository that agrees to hold such Bond for the account of the
Beneficial Owners.

         In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Bonds it
beneficially owns in the manner prescribed in Section 4.08.

         The Bonds shall, on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Indenture Trustee and delivered by the Indenture
Trustee to or upon the order of the Issuer.

         Section 4.02 REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE
OF BONDS; APPOINTMENT OF BOND REGISTRAR AND CERTIFICATE REGISTRAR. The Issuer
shall cause to be kept at the Corporate Trust Office a Bond Register in which,
subject to such reasonable regulations as it may prescribe, the Bond Registrar
shall provide for the registration of Bonds and of transfers and exchanges of
Bonds as herein provided.

         Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Bond at the Corporate Trust
Office, the Issuer shall execute and the Bond Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Bonds in authorized initial Bond Principal Balances evidencing the same
Class and aggregate Percentage Interests.

                                       21

<PAGE>

         Subject to the foregoing, at the option of the Bondholders, Bonds may
be exchanged for other Bonds of like tenor and in authorized initial Bond
Principal Balances evidencing the same Class and aggregate Percentage Interests
upon surrender of the Bonds to be exchanged at the Corporate Trust Office of the
Bond Registrar. Whenever any Bonds are so surrendered for exchange, the Issuer
shall execute and the Indenture Trustee shall authenticate and deliver the Bonds
which the Bondholder making the exchange is entitled to receive. Each Bond
presented or surrendered for registration of transfer or exchange shall (if so
required by the Bond Registrar) be duly endorsed by, or be accompanied by a
written instrument of transfer in form reasonably satisfactory to the Bond
Registrar duly executed by the Holder thereof or his attorney duly authorized in
writing with such signature guaranteed by a commercial bank or trust company
located or having a correspondent located in the city of New York. Bonds
delivered upon any such transfer or exchange will evidence the same obligations,
and will be entitled to the same rights and privileges, as the Bonds
surrendered.

         No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Bond Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Bonds.

         The Issuer hereby appoints the Indenture Trustee as (i) Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.05 of the Trust Agreement and (ii) Bond Registrar under this
Indenture. The Indenture Trustee hereby accepts such appointments.

         Section 4.03 MUTILATED, DESTROYED, LOST OR STOLEN BONDS. If (i) any
mutilated Bond is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Bond, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Bond Registrar or
the Indenture Trustee that such Bond has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8- 405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Bond, a replacement Bond; PROVIDED, HOWEVER, that if
any such destroyed, lost or stolen Bond, but not a mutilated Bond, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Bond, the Issuer may pay such destroyed, lost or stolen Bond when so
due or payable without surrender thereof. If, after the delivery of such
replacement Bond or payment of a destroyed, lost or stolen Bond pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Bond in
lieu of which such replacement Bond was issued presents for payment such
original Bond, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Bond (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Bond from such Person to whom such
replacement Bond was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.

                                       22

<PAGE>

         Upon the issuance of any replacement Bond under this Section 4.03, the
Issuer may require the payment by the Holder of such Bond of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.

         Every replacement Bond issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Bond shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Bond shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Bonds duly issued hereunder.

         The provisions of this Section 4.03 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Bonds.

         Section 4.04 PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer of any Bond, the Issuer, the Indenture Trustee, the
Paying Agent and any agent of the Issuer or the Indenture Trustee may treat the
Person in whose name any Bond is registered (as of the day of determination) as
the owner of such Bond for the purpose of receiving payments of principal of and
interest, if any, on such Bond and for all other purposes whatsoever, whether or
not such Bond be overdue, and neither the Issuer, the Indenture Trustee, the
Paying Agent nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.

         Section 4.05 CANCELLATION. All Bonds surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Bonds previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the
Indenture Trustee. No Bonds shall be authenticated in lieu of or in exchange for
any Bonds cancelled as provided in this Section 4.05, except as expressly
permitted by this Indenture. All cancelled Bonds may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Request that they be destroyed or returned to it; PROVIDED, HOWEVER, that such
Issuer Request is timely and the Bonds have not been previously disposed of by
the Indenture Trustee.

         Section 4.06 BOOK-ENTRY BONDS. The Bonds, upon original issuance, will
be issued in the form of typewritten Bonds representing the Book-Entry Bonds, to
be delivered to The Depository Trust Company, the initial Depository, by, or on
behalf of, the Issuer. The Bonds shall initially be registered on the Bond
Register in the name of Cede & Co., the nominee of the initial Depository, and
no Beneficial Owner will receive a Definitive Bond representing such Beneficial
Owner's interest in such Bond, except as provided in Section 4.08. With respect
to such Bonds, unless and until definitive, fully registered Bonds (the
"Definitive Bonds") have been issued to Beneficial Owners pursuant to Section
4.08:

                           (i) the provisions of this Section 4.06 shall be in
         full force and effect;

                                       23

<PAGE>

                           (ii) the Bond Registrar, the Paying Agent and the
         Indenture Trustee shall be entitled to deal with the Depository for all
         purposes of this Indenture (including the payment of principal of and
         interest on the Bonds and the giving of instructions or directions
         hereunder) as the sole holder of the Bonds, and shall have no
         obligation to the Beneficial Owners of the Bonds;

                           (iii) to the extent that the provisions of this
         Section 4.06 conflict with any other provisions of this Indenture, the
         provisions of this Section 4.06 shall control;

                           (iv) the rights of Beneficial Owners shall be
         exercised only through the Depository and shall be limited to those
         established by law and agreements between such Owners of Bonds and the
         Depository and/or the Depository Participants. Unless and until
         Definitive Bonds are issued pursuant to Section 4.08, the initial
         Depository will make book- entry transfers among the Depository
         Participants and receive and transmit payments of principal of and
         interest on the Bonds to such Depository Participants; and

                           (v) whenever this Indenture requires or permits
         actions to be taken based upon instructions or directions of Holders of
         Bonds evidencing a specified percentage of the Bond Principal Balances
         of the Bonds, the Depository shall be deemed to represent such
         percentage with respect to the Bonds only to the extent that it has
         received instructions to such effect from Beneficial Owners and/or
         Depository Participants owning or representing, respectively, such
         required percentage of the beneficial interest in the Bonds and has
         delivered such instructions to the Indenture Trustee.

         Section 4.07 NOTICES TO DEPOSITORY. Whenever a notice or other
communication to the Bond Holders is required under this Indenture, unless and
until Definitive Bonds shall have been issued to Beneficial Owners pursuant to
Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Bonds to the
Depository, and shall have no obligation to the Beneficial Owners.

         Section 4.08 DEFINITIVE BONDS. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Bonds and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Beneficial Owners of Bonds representing beneficial interests
aggregating at least a majority of the Bond Principal Balances of the Bonds
advise the Depository in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Beneficial
Owners, then the Depository shall notify all Beneficial Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Bonds to Beneficial Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Bonds representing the Book-Entry Bonds by
the Depository, accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the Definitive Bonds in
accordance with the instructions of the Depository. None of the Issuer, the Bond
Registrar or the Indenture 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. Upon the issuance of Definitive Bonds, the
Indenture Trustee shall recognize the Holders of the Definitive Bonds as
Bondholders.

                                       24

<PAGE>

         Section 4.09 TAX TREATMENT. The Issuer has entered into this Indenture,
and the Bonds will be issued with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Bonds will qualify
as indebtedness. The Issuer and the Indenture Trustee (in accordance with
Section 6.06 hereof), by entering into this Indenture, and each Bondholder, by
its acceptance of its Bond (and each Beneficial Owner by its acceptance of an
interest in the applicable Book-Entry Bond), agree to treat the Bonds for
federal, state and local income, single business and franchise tax purposes as
indebtedness.

         Section 4.10 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Bonds except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Bonds, (iii) rights of Bondholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.17, 3.19 and 3.20, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11), (vi) the
right of the Derivative Contract Counterparty to receive the Net Derivative Fee
and (vii) the rights of Bondholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them,
and the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Bonds and shall release and deliver the Collateral
to or upon the order of the Issuer, when

                  (A) either

                  (1) all Bonds theretofore authenticated and delivered (other
         than (i) Bonds that have been destroyed, lost or stolen and that have
         been replaced or paid as provided in Section 4.03 hereof and (ii) Bonds
         for whose payment money has theretofore been deposited in trust or
         segregated and held in trust by the Issuer and thereafter repaid to the
         Issuer or discharged from such trust, as provided in Section 3.03) have
         been delivered to the Indenture Trustee for cancellation; or

                  (2) all Bonds not theretofore delivered to the Indenture
         Trustee for cancellation

                           a.       have become due and payable,

                           b.       will become due and payable at the Final
                                    Scheduled Payment Date within one year, or

                           c.       have been called for early redemption and
                                    the Trust has been terminated pursuant to
                                    Section 8.07 hereof,

and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Bonds then outstanding not theretofore delivered to the Indenture Trustee
for cancellation when due on the Final Scheduled Payment Date or other final
Payment Date and has delivered to the Indenture

                                       25

<PAGE>

Trustee a verification report from a nationally recognized accounting firm
certifying that the amounts deposited with the Indenture Trustee are sufficient
to pay and discharge the entire indebtedness of such Bonds, or, in the case of
c. above, the Issuer shall have complied with all requirements of Section 8.07
hereof,

                  (B) the Issuer has paid or caused to be paid all other sums
         payable hereunder; and

                  (C) the Issuer has delivered to the Indenture Trustee an
         Officer's Certificate and an Opinion of Counsel, each meeting the
         applicable requirements of Section 10.01 hereof, each stating that all
         conditions precedent herein provided for relating to the satisfaction
         and discharge of this Indenture have been complied with and, if the
         Opinion of Counsel relates to a deposit made in connection with Section
         4.10(A)(2)b. above, such opinion shall further be to the effect that
         such deposit will constitute an "in-substance defeasance" within the
         meaning of Revenue Ruling 85-42, 1985-1 C.B. 36, and in accordance
         therewith, the Issuer will be the owner of the assets deposited in
         trust for federal income tax purposes.

         Section 4.11 APPLICATION OF TRUST MONEY. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Bonds and this
Indenture, to the payment, either directly or through any Paying Agent or the
Issuer, Certificate Paying Agent as designee of the Issuer, as the Indenture
Trustee may determine, to the Holders of Securities, of all sums due and to
become due thereon for principal and interest or otherwise; but such monies need
not be segregated from other funds except to the extent required herein or
required by law.

         Section 4.12 [RESERVED].

         Section 4.13 REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Bonds,
all monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Bonds shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Person shall be released from all further
liability with respect to such monies.

         Section 4.14 TEMPORARY BONDS. Pending the preparation of any Definitive
Bonds, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Bonds that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Bonds in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Bonds may
determine, as evidenced by their execution of such Bonds.

         If temporary Bonds are issued, the Issuer will cause Definitive Bonds
to be prepared without unreasonable delay. After the preparation of the
Definitive Bonds, the temporary Bonds shall be exchangeable for Definitive Bonds
upon surrender of the temporary Bonds at the office of the Indenture Trustee
located at c/o DTC Transfer Services, 55 Water Street, Jeanette Park Entrance,
New York, New York 10041, without charge to the Holder. Upon surrender for
cancellation of any

                                       26

<PAGE>

one or more temporary Bonds, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Bonds of authorized denominations and of like tenor, class and
aggregate principal amount. Until so exchanged, such temporary Bonds shall in
all respects be entitled to the same benefits under this Indenture as Definitive
Bonds.

         Section 4.15 REPRESENTATION REGARDING ERISA. By acquiring a Bond or
interest therein, each Holder of such Bond or Beneficial Owner of any such
interest will be deemed to represent that either (1) it is not acquiring the
Bond with Plan Assets or (2) (A) the acquisition, holding and transfer of such
Bond will not give rise to a nonexempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the
Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the
Master Servicer, any Subservicer, any other servicer, any administrator, any
provider of credit support, including the Derivative Contract Counterparty, any
owner of the Certificates, or any of their Affiliates being a "Party in
Interest" (within the meaning of ERISA) or Disqualified Person (within the
meaning of the Code) with respect to such Holder or Beneficial Owner that is a
Plan and (B) the Bonds are rated investment grade or better and such person
believes that the Bonds are properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat the
Bonds. Alternatively, regardless of the rating of the Bonds, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer
or any successor servicer which opines that the acquisition, holding and
transfer of such Bond or interest therein is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the
Master Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.

                                       27

<PAGE>

                                    ARTICLE V

                              Default and Remedies

         Section 5.01 EVENTS OF DEFAULT. The Issuer shall deliver to the
Indenture Trustee, within five days after learning of the occurrence of an Event
of Default, written notice in the form of an Officer's Certificate of any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (iii) or (iv) of the definition of "Event of Default", its
status and what action the Issuer is taking or proposes to take with respect
thereto. The Indenture Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer has actual knowledge thereof or
unless written notice of such Event of Default is received by a Responsible
Officer and such notice references the Bonds, the Trust Estate or this
Indenture.

         Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee at the written direction of the Holders of Bonds representing
not less than a majority of the aggregate Bond Principal Balance of the Bonds
may declare the Bonds to be immediately due and payable, by a notice in writing
to the Issuer (and to the Indenture Trustee if such notice is given by
Bondholders), and upon any such declaration the unpaid Bond Principal Balance of
the Bonds, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.

         At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, Holders of Bonds representing not less
than a majority of the aggregate Bond Principal Balance of the Bonds, by written
notice to the Issuer and the Indenture Trustee, may waive the related Event of
Default and rescind and annul such declaration and its consequences if

                           (i) the Issuer has paid or deposited with the
         Indenture Trustee a sum sufficient to pay:

                           (A) all payments of principal of and interest on the
                  Bonds and all other amounts that would then be due hereunder
                  or upon the Bonds if the Event of Default giving rise to such
                  acceleration had not occurred;

                           (B) all sums paid or advanced by the Indenture
                  Trustee hereunder and the reasonable compensation, expenses,
                  disbursements and advances of the Indenture Trustee and its
                  agents and counsel; and

                           (C) all amounts owed to the Derivative Contract
                  Counterparty; and

                           (ii) all Events of Default, other than the nonpayment
         of the principal of the Bonds that has become due solely by such
         acceleration, have been cured or waived as provided in Section 5.12.

                                       28

<PAGE>

No such rescission shall affect any subsequent default or impair any right
consequent thereto.

         Section 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.

         (a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Bond when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment of
the principal of or any installment of the principal of any Bond when the same
becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee,
at the direction of the Holders of a majority of the aggregate Bond Principal
Balances of the Bonds, pay to the Indenture Trustee, for the benefit of the
Holders of Bonds, the whole amount then due and payable on the Bonds for
principal and interest, with interest at the applicable Bond Interest Rate upon
the overdue principal, and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.

         (b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.16 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Bonds and collect in the manner provided by
law out of the property of the Issuer or other obligor the Bonds, wherever
situated, the monies adjudged or decreed to be payable.

         (c) If an Event of Default occurs and is continuing, the Indenture
Trustee, subject to the provisions of Section 10.16 hereof may, and shall as
directed in writing by the Holders of a majority of the aggregate Bond Principal
Balances of the Bonds, as more particularly provided in Section 5.04 hereof,
proceed to protect and enforce its rights and the rights of the Bondholders by
such appropriate Proceedings to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.

         (d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Bonds or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Bonds, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Bonds shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:

                           (i) to file and prove a claim or claims for the whole
         amount of principal and interest owing and unpaid in respect of the
         Bonds and to file such other papers or

                                       29

<PAGE>

         documents as may be necessary or advisable in order to have the claims
         of the Indenture Trustee (including any claim for reasonable
         compensation to the Indenture Trustee and each predecessor Indenture
         Trustee, and their respective agents, attorneys and counsel, and for
         reimbursement of all expenses and liabilities incurred, and all
         advances made, by the Indenture Trustee and each predecessor Indenture
         Trustee, except as a result of negligence or bad faith) and of the
         Bondholders allowed in such Proceedings;

                           (ii) unless prohibited by applicable law and
         regulations, to vote on behalf of the Holders of Bonds in any election
         of a trustee, a standby trustee or Person performing similar functions
         in any such Proceedings;

                           (iii) to collect and receive any monies or other
         property payable or deliverable on any such claims and to distribute
         all amounts received with respect to the claims of the Bondholders and
         of the Indenture Trustee on their behalf, and

                           (iv) to file such proofs of claim and other papers or
         documents as may be necessary or advisable in order to have the claims
         of the Indenture Trustee or the Holders of Bonds allowed in any
         judicial proceedings relative to the Issuer, its creditors and its
         property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Bondholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Bondholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee.

         (e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Bondholder any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Bondholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.

         (f) All rights of action and of asserting claims under this Indenture,
or under any of the Bonds, may be enforced by the Indenture Trustee without the
possession of any of the Bonds or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Bonds, subject to Section 5.05 hereof.

         (g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall

                                       30

<PAGE>

be a party), the Indenture Trustee shall be held to represent all the Holders of
the Bonds, and it shall not be necessary to make any Bondholder a party to any
such Proceedings.

         Section 5.04 REMEDIES; PRIORITIES. (a) If an Event of Default shall
have occurred and be continuing and if an acceleration has been declared and not
rescinded pursuant to Section 5.02 hereof, the Indenture Trustee subject to the
provisions of Section 10.16 hereof may do one or more of the following (subject
to Section 5.05 hereof):

                           (i) institute Proceedings in its own name and as
         trustee of an express trust for the collection of all amounts then
         payable on the Bonds or under this Indenture with respect thereto,
         whether by declaration or otherwise, enforce any judgment obtained, and
         collect from the Issuer and any other obligor upon such Bonds monies
         adjudged due;

                           (ii) institute Proceedings from time to time for the
         complete or partial foreclosure of this Indenture with respect to the
         Trust Estate;

                           (iii) exercise any remedies of a secured party under
         the UCC and take any other appropriate action to protect and enforce
         the rights and remedies of the Indenture Trustee and the Holders of the
         Bonds; and

                           (iv) sell the Trust Estate or any portion thereof or
         rights or interest therein, at one or more public or private sales
         called and conducted in any manner permitted by law;

PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of at least 50.01% of the
aggregate Bond Principal Balance, (B) the proceeds of such sale or liquidation
distributable to the Holders of the Bonds are sufficient to discharge in full
all amounts then due and unpaid upon the Bonds for principal and interest or (C)
the Indenture Trustee determines that the Mortgage Loans will not continue to
provide sufficient funds for the payment of principal of and interest on the
Bonds as they would have become due if the Bonds had not been declared due and
payable, and the Indenture Trustee obtains the consent of the Holders of a
majority of the aggregate Bond Principal Balance of the Bonds. In determining
such sufficiency or insufficiency with respect to clause (B) and (C), the
Indenture Trustee may, but need not, obtain and rely upon an opinion (obtained
at the expense of the Trust) of an Independent investment banking or accounting
firm of national reputation as to the feasibility of such proposed action and as
to the sufficiency of the Trust Estate for such purpose. Notwithstanding the
foregoing, so long as an Event of Servicer Termination has not occurred, any
Sale of the Trust Estate shall be made subject to the continued servicing of the
Mortgage Loans by the Master Servicer as provided in the Servicing Agreement.

         (b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:

                  FIRST: to the Indenture Trustee for amounts due under Section
         6.07 hereof;

                                       31

<PAGE>

                  SECOND: to the Derivative Contract Counterparty, any amounts
         owed under the Derivative Contracts, other than any Additional
         Derivative Counterparty Payment;

                  THIRD: to the Bondholders for amounts due and unpaid on the
         Bonds (other than Unpaid Interest Shortfalls and Basis Risk Shortfall
         Carry-Forward Amounts) with respect to interest, first, to the Class
         A-1 Bondholders, second, to the Class A-2 Bondholders, third, to the
         Class M-1 Bondholders, fourth, to the Class M-2 Bondholders and fifth,
         to the Class B Bondholders, according to the amounts due and payable on
         the Bonds for interest;

                  FOURTH: to Bondholders for amounts due and unpaid on the Bonds
         with respect to principal, and to each Bondholder ratably, without
         preference or priority of any kind, according to the amounts due and
         payable on the Bonds for principal, until the Bond Principal Balance of
         each Class is reduced to zero;

                  FIFTH: to the Bondholders for amounts due and unpaid on the
         Bonds with respect to any related Basis Risk Shortfall Carry-Forward
         Amounts, first, to the Class A-1 Bondholders, second, to the Class A-2
         Bondholders, third, to the Class M-1 Bondholders, fourth, to the Class
         M-2 Bondholders and fifth, to the Class B Bondholders, according to the
         amounts due and payable on the Bonds with respect thereto, from amounts
         available in the Trust Estate for the Bondholders;

                  SIXTH: to the Bondholders for amounts due and unpaid on the
         Bonds with respect to any related Unpaid Interest Shortfalls, first, to
         the Class A-1 Bondholders, second, to the Class A-2 Bondholders, third,
         to the Class M-1 Bondholders, fourth, to the Class M-2 Bondholders and
         fifth, to the Class B Bondholders, according to the amounts due and
         payable on the Bonds with respect thereto, from amounts available in
         the Trust Estate for the Bondholders;

                  SEVENTH: to the Derivative Contract Counterparty, any
         Additional Derivative Counterparty Payment; and

                  EIGHTH: to the payment of the remainder, if any to the
         Certificate Paying Agent on behalf of the Issuer or to any other person
         legally entitled thereto.

         The Indenture Trustee may fix a record date and payment date for any
payment to Bondholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Bondholder a notice
that states the record date, the payment date and the amount to be paid.

         Section 5.05 OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Bonds
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may elect to take and maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Bondholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Bonds and other obligations of the Issuer, and the Indenture
Trustee shall take such desire into account when determining whether or not to
take and maintain possession of the Trust Estate. In determining

                                       32

<PAGE>

whether to take and maintain possession of the Trust Estate, the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.

         Section 5.06 LIMITATION OF SUITS. No Holder of any Bond shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.16 hereof

                           (i) such Holder has previously given written notice
         to the Indenture Trustee of a continuing Event of Default;

                           (ii) the Holders of not less than 25% of the
         aggregate Bond Principal Balances of the Bonds have made a written
         request to the Indenture Trustee to institute such Proceeding in
         respect of such Event of Default in its own name as Indenture Trustee
         hereunder;

                           (iii) such Holder or Holders have offered to the
         Indenture Trustee reasonable indemnity against the costs, expenses and
         liabilities to be incurred in complying with such request;

                           (iv) the Indenture Trustee for 60 days after its
         receipt of such notice of request and offer of indemnity has failed to
         institute such Proceedings; and

                           (v) no direction inconsistent with such written
         request has been given to the Indenture Trustee during such 60-day
         period by the Holders of a majority of the Bond Principal Balances of
         the Bonds.

It is understood and intended that no one or more Holders of Bonds shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Bonds or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.

         Subject to the last paragraph of Section 5.11 herein, in the event the
Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Bonds, each representing less
than a majority of the Bond Principal Balances of the Bonds, the Indenture
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.

         Section 5.07 UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, the Holder
of any Bond shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Bond on or
after the respective due dates thereof expressed in such Bond or in this
Indenture

                                       33

<PAGE>

and to institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder.

         Section 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Bondholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Bondholder, then and in every such case the Issuer, the
Indenture Trustee and the Bondholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Bondholders shall continue as though no such Proceeding had been
instituted.

         Section 5.09 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Bondholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

         Section 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee or any Holder of any Bond to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Bondholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Bondholders, as
the case may be.

         Section 5.11 CONTROL BY BONDHOLDERS. The Holders of a majority of the
aggregate Bond Principal Balances of the Bonds shall have the right to direct
the time, method and place of conducting any Proceeding for any remedy available
to the Indenture Trustee with respect to the Bonds or exercising any right
conferred on the Indenture Trustee; provided that:

         (i)      such direction shall not be in conflict with any rule of law
                  or with this Indenture;

         (ii)     any direction to the Indenture Trustee to sell or liquidate
                  the Trust Estate shall be by Holders of Bonds representing not
                  less than 50.01% of the Bond Principal Balances of the Bonds;

         (iii)    the Indenture Trustee may take any other action deemed proper
                  by the Indenture Trustee that is not inconsistent with such
                  direction of the Holders of a majority of the aggregate Bond
                  Principal Balances of the Bonds.

Notwithstanding the rights of Bondholders set forth in this Section 5.11, the
Indenture Trustee need not take any action that it determines might involve it
in liability.

         Section 5.12 WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Bonds as provided in Section 5.02 hereof,
the Holders of Bonds representing not less

                                       34

<PAGE>

than a majority of the aggregate Bond Principal Balance of the Bonds may waive
any past Event of Default and its consequences except an Event of Default (a)
with respect to payment of principal of or interest on any of the Bonds or (b)
in respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Bond. In the case of any such waiver,
the Issuer, the Indenture Trustee and the Holders of the Bonds shall be restored
to their former positions and rights hereunder, respectively, but no such waiver
shall extend to any subsequent or other Event of Default or impair any right
consequent thereto.

         Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.

         Section 5.13 UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Bond and each Beneficial Owner of any interest
therein by such Holder's or Beneficial Owner's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Bondholder, or group of
Bondholders, in each case holding in the aggregate more than 10% of the Bond
Principal Balances of the Bonds or (c) any suit instituted by any Bondholder for
the enforcement of the payment of principal of or interest on any Bond on or
after the respective due dates expressed in such Bond and in this Indenture.

         Section 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.

         Section 5.15 SALE OF TRUST ESTATE. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 hereof is expressly subject to the provisions of Section 5.05
hereof and this Section 5.15. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Bonds and under this
Indenture shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made at the time and place of
such Sale. The Indenture Trustee hereby expressly waives its right to any amount
fixed by law as compensation for any Sale.

                                       35

<PAGE>

         (b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless

                  (1) the Holders of all Bonds consent to or direct the
         Indenture Trustee to make, such Sale, or

                  (2) the proceeds of such Sale would be not less than the
         entire amount which would be payable to the Bondholders under the
         Bonds, in full payment thereof in accordance with Section 5.02 hereof,
         on the Payment Date next succeeding the date of such Sale, or

                  (3) the Indenture Trustee determines that the conditions for
         retention of the Trust Estate set forth in Section 5.05 hereof cannot
         be satisfied (in making any such determination, the Indenture Trustee
         may rely upon an opinion of an Independent investment banking firm
         obtained and delivered as provided in Section 5.05 hereof), and the
         Holders of Bonds representing at least 100% of the Bond Principal
         Balances of the Bonds consent to such Sale.

The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).

         (c) Unless the Holders representing at least 66-2/3% of the Bond
Principal Balances of the Bonds have otherwise consented or directed the
Indenture Trustee, at any public Sale of all or any portion of the Trust Estate
at which a minimum bid equal to or greater than the amount described in
paragraph (2) of subsection (b) of this Section 5.15 has not been established by
the Indenture Trustee and no Person bids an amount equal to or greater than such
amount, the Indenture Trustee, as trustee for the benefit of the Holders of the
Bonds, shall bid an amount at least $1.00 more than the highest other bid.

         (d) In connection with a Sale of all or any portion of the Trust
Estate,

                  (1) any Holder or Holders of Bonds may bid for and purchase
         the property offered for sale, and upon compliance with the terms of
         sale may hold, retain and possess and dispose of such property, without
         further accountability, and may, in paying the purchase money therefor,
         deliver any Bonds or claims for interest thereon in lieu of cash up to
         the amount which shall, upon distribution of the net proceeds of such
         sale, be payable thereon, and such Bonds, in case the amounts so
         payable thereon shall be less than the amount due thereon, shall be
         returned to the Holders thereof after being appropriately stamped to
         show such partial payment;

                  (2) the Indenture Trustee may bid for and acquire the property
         offered for Sale in connection with any Sale thereof, and, subject to
         any requirements of, and to the extent permitted by, applicable law in
         connection therewith, may purchase all or any portion of the Trust
         Estate in a private sale, and, in lieu of paying cash therefor, may
         make settlement for the purchase price by crediting the gross Sale
         price against the sum of (A) the amount which would be distributable to
         the Holders of the Bonds and Holders of Certificates on the Payment
         Date next succeeding the date of such Sale and (B) the expenses of the
         Sale and of any Proceedings in connection therewith which are
         reimbursable to it, without being required

                                       36

<PAGE>

         to produce the Bonds in order to complete any such Sale or in order for
         the net Sale price to be credited against such Bonds, and any property
         so acquired by the Indenture Trustee shall be held and dealt with by it
         in accordance with the provisions of this Indenture;

                  (3) the Indenture Trustee shall execute and deliver an
         appropriate instrument of conveyance, prepared by the Issuer and
         satisfactory to the Indenture Trustee, transferring its interest in any
         portion of the Trust Estate in connection with a Sale thereof;

                  (4) the Indenture Trustee is hereby irrevocably appointed the
         agent and attorney- in-fact of the Issuer to transfer and convey its
         interest in any portion of the Trust Estate in connection with a Sale
         thereof, and to take all action necessary to effect such Sale; and

                  (5) no purchaser or transferee at such a Sale shall be bound
         to ascertain the Indenture Trustee's authority, inquire into the
         satisfaction of any conditions precedent or see to the application of
         any monies.

         Section 5.16 ACTION ON BONDS. The Indenture Trustee's right to seek and
recover judgment on the Bonds or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Bondholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b) hereof.

         Section 5.17 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuer in
its capacity as holder of the Mortgage Loans, shall take all such lawful action
as the Indenture Trustee may request to cause the Issuer to compel or secure the
performance and observance by the Seller and the Master Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the
Mortgage Loan Sale and Contribution Agreement and the Servicing Agreement, and
to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Mortgage Loan Sale and
Contribution Agreement and the Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee, as pledgee of the Mortgage Loans,
including the transmission of notices of default on the part of the Seller or
the Master Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Master Servicer of each of their obligations under the Mortgage Loan Sale and
Contribution Agreement and the Servicing Agreement.

         (b) The Indenture Trustee, as pledgee of the Mortgage Loans, may, and
at the direction (which direction shall be in writing) of the Holders of 66-2/3%
of the Bond Principal Balances of the Bonds, shall exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller or the
Master Servicer under or in connection with the Mortgage Loan Sale and
Contribution Agreement and the Servicing Agreement, including the right or power
to take any action to compel or secure performance or observance by the Seller
or the Master Servicer, as the case may be, of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction,

                                       37

<PAGE>

approval, extension or waiver under the Mortgage Loan Sale and Contribution
Agreement and the Servicing Agreement, as the case may be, and any right of the
Issuer to take such action shall not be suspended.

                                       38

<PAGE>

                                   ARTICLE VI

                              The Indenture Trustee

         Section 6.01 DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.

         (b) Except during the continuance of an Event of Default:

                           (i) the Indenture Trustee undertakes to perform such
         duties and only such duties as are specifically set forth in this
         Indenture and no implied covenants or obligations shall be read into
         this Indenture against the Indenture Trustee; and

                           (ii) in the absence of bad faith on its part, the
         Indenture Trustee may conclusively rely, as to the truth of the
         statements and the correctness of the opinions expressed therein, upon
         certificates or opinions furnished to the Indenture Trustee and
         conforming to the requirements of this Indenture; however, the
         Indenture Trustee shall examine the certificates and opinions to
         determine whether or not they conform to the requirements of this
         Indenture.

         (c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:

                           (i) this paragraph does not limit the effect of
         paragraph (b) of this Section 6.01;

                           (ii) the Indenture Trustee shall not be liable for
         any error of judgment made in good faith by a Responsible Officer
         unless it is proved that the Indenture Trustee was negligent in
         ascertaining the pertinent facts; and

                           (iii) the Indenture Trustee shall not be liable with
         respect to any action it takes or omits to take in good faith in
         accordance with a direction received by it from Bondholders or from the
         Issuer, which they are entitled to give under the Basic Documents.

         (d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.

         (e) Money held in trust by the Indenture Trustee need not be segregated
from other trust funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.

         (f) No provision of this Indenture shall require the Indenture Trustee
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 it shall have reasonable grounds to believe that

                                       39

<PAGE>

repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

         (g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.

         (h) The Indenture Trustee shall act in accordance with Sections 6.03
and 6.04 of the Servicing Agreement and shall act as successor to the Master
Servicer or appoint a successor Master Servicer in accordance with Section 6.02
of the Servicing Agreement.

         Section 6.02 RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.

         (b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.

         (c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee.

         (d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.

         (e) The Indenture Trustee may consult with counsel, and the advice or
Opinion of Counsel with respect to legal matters relating to this Indenture and
the Bonds shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.

         (f) For the limited purpose of effecting any action to be undertaken by
the Indenture Trustee, but not specifically as a duty of the Indenture Trustee
in the Indenture, the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder, either directly or by or through
agents, attorneys, custodians or nominees appointed with due care, and shall not
be responsible for any willful misconduct or negligence on the part of any
agent, attorney, custodian or nominee so appointed.

         (g) The Indenture Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Indenture Trustee's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder servicing agent, custodian or sub-custodian with respect to certain
of the Eligible Investments, (ii) using Affiliates to effect transactions in
certain Eligible Investments and (iii) effecting transactions in certain
Eligible Investments. Such compensation shall not be considered an amount that
is reimbursable or payable to the Indenture Trustee (i) as part of the Indenture
Trustee Fee, (ii) pursuant to Sections 3.05(d), 5.04(b), 6.07 or 8.02(c)
hereunder or (iii) out of Available Funds.

                                       40

<PAGE>

         Section 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Bonds and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee, subject to the
requirements of the Trust Indenture Act. Any Bond Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Sections 6.11 and 6.12 hereof.

         Section 6.04 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Bonds, it shall not be accountable for the
Issuer's use of the proceeds from the Bonds, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Bonds or in the Bonds other than the Indenture
Trustee's certificate of authentication.

         Section 6.05 NOTICE OF EVENT OF DEFAULT. Subject to Section 5.01, the
Indenture Trustee shall promptly mail to each Bondholder notice of the Event of
Default after it is known to a Responsible Officer of the Indenture Trustee,
unless such Event of Default shall have been waived or cured. Except in the case
of an Event of Default in payment of principal of or interest on any Bond, the
Indenture Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Bondholders.

         Section 6.06 REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX
ADMINISTRATION. The Indenture Trustee shall deliver to each Bondholder such
information as may be required to enable such holder to prepare its federal and
state income tax returns.

         The Indenture Trustee shall prepare and file (or cause to be prepared
and filed), on behalf of the Owner Trustee, all tax returns (if any) and
information reports, tax elections and such annual or other reports of the
Issuer as are necessary for preparation of tax returns and information reports
as provided in Section 5.03 of the Trust Agreement, including without limitation
Form 1099. All tax returns and information reports shall be signed by the Owner
Trustee as provided in Section 5.03 of the Trust Agreement.

         Section 6.07 COMPENSATION AND INDEMNITY. The Issuer shall pay to the
Indenture Trustee on each Payment Date reasonable compensation for its services.
The amount of the Indenture Trustee's Fee shall be paid by the Master Servicer
to the Indenture Trustee on each Payment Date pursuant to Section 3.07(a)(x) of
the Servicing Agreement and all amounts owing to the Indenture Trustee hereunder
(including amounts owing from the Issuer for indemnification and otherwise) in
excess of such amount shall be paid solely as provided in Section 3.05(d)(v) and
Section 5.04(b) hereof. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall reimburse the Indenture Trustee for all reasonable out- of-pocket expenses
incurred or made by it, including costs of collection, in addition to
compensation for its services. Such expenses shall include reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts. The Issuer shall indemnify the
Indenture Trustee against any and all loss, liability or expense (including
attorneys' fees) incurred by it in connection with the administration of this
Trust and the performance of its duties hereunder. The Indenture Trustee shall
notify the Issuer promptly of any claim for which it may seek indemnity. Failure
by the Indenture Trustee to so notify the Issuer shall not relieve the

                                       41

<PAGE>

Issuer of its obligations hereunder. The Issuer shall defend any such claim, and
the Indenture Trustee may have separate counsel and the Issuer shall pay the
fees and expenses of such counsel. The Issuer is not obligated to reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.

         The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture and the
termination or resignation of the Indenture Trustee. When the Indenture Trustee
incurs expenses after the occurrence of an Event of Default with respect to the
Issuer, the expenses are intended to constitute expenses of administration under
Title 11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.

         Section 6.08 REPLACEMENT OF INDENTURE TRUSTEE. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Holders of a majority of
Bond Principal Balances of the Bonds may remove the Indenture Trustee by so
notifying the Indenture Trustee and may appoint a successor Indenture Trustee.
The Issuer shall remove the Indenture Trustee if:

                           (i) the Indenture Trustee fails to comply with
         Section 6.11 hereof;

                           (ii) the Indenture Trustee is adjudged a bankrupt or
         insolvent;

                           (iii) a receiver or other public officer takes charge
         of the Indenture Trustee or its property; or

                           (iv) the Indenture Trustee otherwise becomes
         incapable of acting.

         If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee.

         A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Bondholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

         If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of Bond Principal
Balances of the Bonds may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.

                                       42

<PAGE>

         Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.

         Section 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall
provide the Rating Agencies with prior written notice of any such transaction.

         If at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture and any of the Bonds shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee and deliver such Bonds so
authenticated; and if at that time any of the Bonds shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Bonds either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is in the Bonds or in this Indenture provided
that the certificate of the Indenture Trustee shall have.

         Section 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Bondholders, such title to the Trust Estate, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 hereof.

         (b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:

                           (i) all rights, powers, duties and obligations
         conferred or imposed upon the Indenture Trustee shall be conferred or
         imposed upon and exercised or performed by the Indenture Trustee and
         such separate trustee or co-trustee jointly (it being understood that
         such separate trustee or co-trustee is not authorized to act separately
         without the Indenture Trustee joining in such act), except to the
         extent that under any law of any jurisdiction in which any particular
         act or acts are to be performed the Indenture 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 Estate or any portion thereof in any such
         jurisdiction) shall be exercised and performed singly by such separate
         trustee or co-trustee, but solely at the direction of the Indenture
         Trustee;

                                       43

<PAGE>

                           (ii) no trustee hereunder shall be personally liable
         by reason of any act or omission of any other trustee hereunder; and

                           (iii) the Indenture Trustee may at any time accept
         the resignation of or remove any separate trustee or co-trustee.

         (c) Any notice, request or other writing given to the Indenture 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 Indenture and
the conditions of this Article VI. 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
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.

         (d) Any separate trustee or co-trustee may at any time constitute the
Indenture 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 Indenture 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

         Section 6.11 ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of Baa3 or better by Moody's and BBB or
better by Standard & Poor's. The Indenture Trustee shall comply with TIA ss.
310(b), including the optional provision permitted by the second sentence of TIA
ss. 310(b)(9); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA ss. 310(b)(1) are met.

         Section 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.

         Section 6.13 REPRESENTATIONS AND WARRANTIES. The Indenture Trustee
hereby represents that:

                           (i) The Indenture Trustee is duly organized and
         validly existing as an association in good standing under the laws of
         the United States with power and authority to own its properties and to
         conduct its business as such properties are currently owned and such
         business is presently conducted;

                           (ii) The Indenture Trustee has the power and
         authority to execute and deliver this Indenture and to carry out its
         terms; and the execution, delivery and performance

                                       44

<PAGE>

         of this Indenture have been duly authorized by the Indenture Trustee by
         all necessary corporate action;

                           (iii) The consummation of the transactions
         contemplated by this Indenture and the fulfillment of the terms hereof
         do not conflict with, result in any breach of any of the terms and
         provisions of, or constitute (with or without notice or lapse of time)
         a default under, the articles of incorporation or bylaws of the
         Indenture Trustee or any agreement or other instrument to which the
         Indenture Trustee is a party or by which it is bound; and

                           (iv) To the Indenture Trustee's knowledge, there are
         no proceedings or investigations pending or threatened before any
         court, regulatory body, administrative agency or other governmental
         instrumentality having jurisdiction over the Indenture Trustee or its
         properties: (A) asserting the invalidity of this Indenture (B) seeking
         to prevent the consummation of any of the transactions contemplated by
         this Indenture or (C) seeking any determination or ruling that might
         materially and adversely affect the performance by the Indenture
         Trustee of its obligations under, or the validity or enforceability of,
         this Indenture.

         Section 6.14 DIRECTIONS TO INDENTURE TRUSTEE. The Indenture Trustee is
hereby directed:

         (a) to accept the pledge of the Mortgage Loans and hold the assets of
the Trust Estate in trust for the Bondholders;

         (b) to authenticate and deliver the Bonds substantially in the form
prescribed by Exhibits A-1 and A-2 to this Indenture in accordance with the
terms of this Indenture; and

         (c) to take all other actions as shall be required to be taken by the
terms of this Indenture.

         Section 6.15 THE AGENTS. The provisions of this Indenture relating to
the limitations of the Indenture Trustee's liability and to its indemnity,
rights and protections shall inure also to the Paying Agent and Bond Registrar.

                                       45

<PAGE>

                                   ARTICLE VII

                         Bondholders' Lists and Reports

         Section 7.01 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
BONDHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Bonds as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; PROVIDED, HOWEVER,
that so long as the Indenture Trustee is the Bond Registrar, no such list shall
be required to be furnished to the Indenture Trustee.

         Section 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO
BONDHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Bonds
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 hereof and the names and addresses of Holders of Bonds received
by the Indenture Trustee in its capacity as Bond Registrar. The Indenture
Trustee may destroy any list furnished to it as provided in such Section 7.01
upon receipt of a new list so furnished.

         (b) Bondholders may communicate pursuant to TIA ss. 312(b) with other
Bondholders with respect to their rights under this Indenture or under the
Bonds.

         (c) The Issuer, the Indenture Trustee and the Bond Registrar shall have
the protection of TIAss.312(c).

         Section 7.03 REPORTS OF ISSUER. (a) Subject to Section 4.06 of the
Servicing Agreement, (i) The Indenture Trustee shall file with the Commission on
behalf of the Issuer, with a copy to the Issuer within 15 days before the Issuer
is required to file the same with the Commission, the annual reports and the
information, documents and other reports (or such portions of any of the
foregoing as the Commission may from time to time by rules and regulations
prescribe) that the Issuer may be required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act;

                           (ii) The Indenture Trustee shall file with the
         Commission, on behalf of the Issuer, in accordance with rules and
         regulations prescribed from time to time by the Commission such
         additional information, documents and reports with respect to
         compliance by the Issuer with the conditions and covenants of this
         Indenture as may be required from time to time by such rules and
         regulations; and

                           (iii) The Indenture Trustee shall supply (and the
         Indenture Trustee shall transmit by mail to all Bondholders described
         in TIA ss. 313(c)) such summaries of any information, documents and
         reports required to be filed by the Issuer pursuant to clauses (i) and
         (ii) of this Section 7.03(a) and by rules and regulations prescribed
         from time to time by the Commission.

                                       46

<PAGE>

         (b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.

         Section 7.04 REPORTS BY INDENTURE TRUSTEE. If required by TIA ss.
313(a), within 60 days after each April 30 beginning with April 30, 2004, the
Indenture Trustee shall mail to each Bondholder as required by TIA ss. 313(c) a
brief report dated as of such date that complies with TIA ss. 313(a). The
Indenture Trustee also shall comply with TIA ss. 313(b).

         A copy of each report at the time of its mailing to Bondholders shall
be filed by the Indenture Trustee with the Commission via EDGAR and each stock
exchange, if any, on which the Bonds are listed. The Issuer shall notify the
Indenture Trustee if and when the Bonds are listed on any stock exchange.

         Section 7.05 STATEMENTS TO BONDHOLDERS. (a) With respect to each
Payment Date, the Indenture Trustee shall make available via the Indenture
Trustee's website https://www.corporatetrust.db.com/invr or deliver at the
recipient's option to each Bondholder and each Certificateholder, the Derivative
Contract Counterparty, the Depositor, the Owner Trustee, the Certificate Paying
Agent and each Rating Agency, a statement setting forth the following
information as to the Bonds, to the extent applicable:

                           (i) the aggregate amount of collections with respect
         to the Mortgage Loans;

                           (ii) the Available Funds and Net Monthly Excess Cash
         Flow payable to each Class of Bondholders for such Payment Date, the
         Basis Risk Shortfall Carry-Forward Amount on each Class of Bonds for
         such Payment Date and the aggregate Unpaid Interest Shortfall on each
         Class of Bonds for such Payment Date;

                           (iii) (a) the amount of such distribution to each
         Class of Bonds applied to reduce the Bond Principal Balance thereof,
         and (b) the aggregate amount included therein representing Principal
         Prepayments;

                           (iv) [reserved];

                           (v) the amount of such distribution to Holders of
         each Class of Bonds allocable to interest;

                           (vi) the amount of such distribution to the
         Certificates;

                           (vii) if the distribution to the Holders of any Class
         of Bonds is less than the full amount that would be distributable to
         such Holders if there were sufficient funds available therefor, the
         amount of the shortfall;

                           (viii) the number and the aggregate Stated Principal
         Balance of the Mortgage Loans as of the end of the related Due Period;

                                       47

<PAGE>

                           (ix) the aggregate Bond Principal Balance of each
         Class of Bonds, after giving effect to the amounts distributed on such
         Payment Date, separately identifying any reduction thereof due to
         Realized Losses other than pursuant to an actual distribution of
         principal and the aggregate Bond Principal Balance of all of the Bonds
         after giving effect to the distribution of principal on such Payment
         Date;

                           (x) the number and aggregate Stated Principal
         Balances of Mortgage Loans (a) as to which the Monthly Payment is
         delinquent for 31-60 days, 61-90 days, 91 or more days, respectively,
         (b) in foreclosure and (c) that have become REO Property, in each case
         as of the end of the preceding calendar month;

                           (xi)     the Net Derivative Contract Payment Amount;

                           (xii) the Overcollateralization Increase Amount,
         Overcollateralization Release Amount, Overcollateralization Target
         Amount and Overcollateralized Amount, if any, in each case as the end
         of the related Payment Date;

                           (xiii) the amount of any Advances and Compensating
         Interest payments;

                           (xiv) the aggregate Realized Losses with respect to
         the related Payment Date and cumulative Realized Losses since the
         Closing Date;

                           (xv) the number and aggregate Stated Principal
         Balance of Mortgage Loans repurchased pursuant to the Mortgage Loan
         Sale and Contribution Agreement, for the related Payment Date and
         cumulatively since the Closing Date;

                           (xvi) the Sixty Day Rolling Delinquency Percentage,
         Ninety Day Rolling Delinquency Percentage and Cumulative Losses for
         such Payment Date;

                           (xvii) the book value of any REO Property;

                           (xviii) the amount of any Prepayment Interest
         Shortfalls or Relief Act Shortfalls for such Payment Date;

                           (xix) the aggregate Stated Principal Balance of
         Mortgage Loans purchased pursuant to Section 3.18 of the Servicing
         Agreement for the related Payment Date and cumulatively since the
         Closing Date; and

                           (xx) the Net Derivative Fee for such Payment Date.

         Items (iii) and (v) above shall be presented on the basis of a Bond
having a $1,000 denomination. In addition, by January 31 of each calendar year
following any year during which the Bonds are outstanding, the Indenture Trustee
shall furnish a report to each Bondholder of record if so requested in writing
at any time during each calendar year as to the aggregate of amounts reported
pursuant to (iii) and (v) with respect to the Bonds for such calendar year.

                                       48

<PAGE>

         The Indenture Trustee may conclusively rely upon the Remittance Report
provided by the Master Servicer pursuant to Section 4.01 of the Servicing
Agreement and on the amount of the Net Derivative Contract Payment Amount
furnished to the Indenture Trustee pursuant to the Derivative Contracts in its
preparation of its Statement to Bondholders.

                                       49

<PAGE>

                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

         Section 8.01 COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.

         Section 8.02 TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Bondholders and the Derivative
Contract Counterparty, the Payment Account as provided in Section 3.01 hereof.

         (b) All monies deposited from time to time in the Payment Account and
all deposits therein pursuant to this Indenture (other than deposits of any gain
or income on investments thereof) are for the benefit of the Bondholders. Any
loss on any investment made by the Indenture Trustee with funds in the Payment
Account shall be reimbursed immediately to the Trust Estate by the Master
Servicer. All investments made with monies in the Payment Account and the
Certificate Distribution Account including all income or other gain from such
investments shall be for the benefit of and the risk of the Master Servicer.

         (c) On each Payment Date, the Indenture Trustee shall pay itself the
Indenture Trustee's Fee for such Payment Date and then shall pay the Derivative
Contract Counterparties any amounts owed under the Derivative Contracts, and
then the Indenture Trustee shall distribute all remaining amounts on deposit in
the Payment Account to the Bondholders in respect of the Bonds and to such other
persons in the order of priority set forth in Section 3.05 hereof (except as
otherwise provided in Section 5.04(b) hereof).

         (d) The Indenture Trustee shall invest any funds in the Payment
Account, but only in Eligible Investments, as directed by the Master Servicer,
maturing no later than the Business Day preceding each Payment Date and such
Eligible Investments shall not be sold or disposed of prior to their maturity.

         Section 8.03 OFFICER'S CERTIFICATE. The Indenture Trustee shall receive
at least seven Business Days' notice when requested by the Issuer to take any
action pursuant to Section 8.05(a) hereof, accompanied by copies of any
instruments to be executed, and the Indenture Trustee shall also require, as a
condition to such action, an Officer's Certificate, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to

                                       50

<PAGE>

complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with.

         Section 8.04 TERMINATION UPON DISTRIBUTION TO BONDHOLDERS. This
Indenture and the respective obligations and responsibilities of the Issuer and
the Indenture Trustee created hereby shall terminate upon the distribution to
Bondholders, the Certificate Paying Agent on behalf of the Certificateholders
and the Indenture Trustee of all amounts required to be distributed pursuant to
Article III; PROVIDED, HOWEVER, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the 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.

         Section 8.05 RELEASE OF TRUST ESTATE. (a) Subject to the payment of its
fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture, including for the purposes of any repurchase by
the Master Servicer of a Mortgage Loan pursuant to Section 3.18 of the Servicing
Agreement. No party relying upon an instrument executed by the Indenture Trustee
as provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent,
or see to the application of any monies.

         (b) The Indenture Trustee shall, at such time as (i) there are no Bonds
Outstanding and (ii) all sums due to the Indenture Trustee pursuant to this
Indenture have been paid, release any remaining portion of the Trust Estate that
secured the Bonds from the lien of this Indenture.

         (c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate and an Opinion of Counsel stating
that all applicable requirements have been satisfied.

         Section 8.06 SURRENDER OF BONDS UPON FINAL PAYMENT. By acceptance of
any Bond, the Holder thereof agrees to surrender such Bond to the Indenture
Trustee promptly, prior to such Bondholder's receipt of the final payment
thereon.

         Section 8.07 OPTIONAL REDEMPTION OF THE BONDS. (a) The Majority
Certificateholder shall have the option to redeem the Bonds in whole, but not in
part, on any Payment Date on or after the earlier of (i) the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans as of the end
of the prior Due Period is less than or equal to 25% of the Cut-off Date Balance
and (ii) the Payment Date in May 2013. The aggregate redemption price for the
Bonds will be equal to the unpaid Bond Principal Balance of the Bonds as of the
Payment Date on which the proposed redemption will take place in accordance with
the foregoing, together with accrued and unpaid interest thereon at the
applicable Bond Interest Rate through such Payment Date (including any Unpaid
Interest Shortfalls and Basis Risk Shortfall Carry-Forward Amount), plus an
amount sufficient to pay in full all amounts owing to the Indenture Trustee
under this Indenture (which amounts shall be specified in writing upon request
of the Issuer by the Indenture Trustee) and plus an amount equal to any amounts
owing to the Derivative Contract Counterparty under the Derivative Contracts.

                                       51

<PAGE>

         (b) In order to exercise the foregoing option, the Issuer shall provide
written notice of its exercise of such option to the Indenture Trustee, the
Owner Trustee and the Master Servicer at least 15 days prior to its exercise.
Following receipt of the notice, the Indenture Trustee shall provide notice to
the Bondholders of the final payment on the Bonds. In addition, the Issuer
shall, not less than one Business Day prior to the proposed Payment Date on
which such redemption is to be made, deposit the aggregate redemption price
specified in (a) above with the Indenture Trustee, who shall deposit the
aggregate redemption price into the Payment Account and shall, on the Payment
Date after receipt of the funds, apply such funds to make final payments of
principal and interest on the Bonds in accordance with Section 3.05(b) and (c)
hereof and payment in full to the Indenture Trustee, and this Indenture shall be
discharged subject to the provisions of Section 4.10 hereof. If for any reason
the amount deposited by the Issuer is not sufficient to make such redemption or
such redemption cannot be completed for any reason, the amount so deposited by
the Issuer with the Indenture Trustee shall be immediately returned to the
Issuer in full and shall not be used for any other purpose or be deemed to be
part of the Trust Estate.

                                       52

<PAGE>

                                   ARTICLE IX

                             Supplemental Indentures

         Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.
(a) Without the consent of the Holders of any Bonds but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:

                           (i) to correct or amplify the description of any
         property at any time subject to the lien of this Indenture, or better
         to assure, convey and confirm unto the Indenture Trustee any property
         subject or required to be subjected to the lien of this Indenture, or
         to subject to the lien of this Indenture additional property;

                           (ii) to evidence the succession, in compliance with
         the applicable provisions hereof, of another person to the Issuer, and
         the assumption by any such successor of the covenants of the Issuer
         herein and in the Bonds contained;

                           (iii) to add to the covenants of the Issuer, for the
         benefit of the Holders of the Bonds, or to surrender any right or power
         herein conferred upon the Issuer;

                           (iv) to convey, transfer, assign, mortgage or pledge
         any property to or with the Indenture Trustee;

                           (v) to cure any ambiguity, to correct or supplement
         any provision herein or in any supplemental indenture that may be
         inconsistent with any other provision herein or in any supplemental
         indenture;

                           (vi) to make any other provisions with respect to
         matters or questions arising under this Indenture or in any
         supplemental indenture; provided, that such action shall not materially
         and adversely affect the interests of the Holders of the Bonds;

                           (vii) to evidence and provide for the acceptance of
         the appointment hereunder by a successor trustee with respect to the
         Bonds and to add to or change any of the provisions of this Indenture
         as shall be necessary to facilitate the administration of the trusts
         hereunder by more than one trustee, pursuant to the requirements of
         Article VI hereof; or

                           (viii) to modify, eliminate or add to the provisions
         of this Indenture to such extent as shall be necessary to effect the
         qualification of this Indenture under the TIA or under any similar
         federal statute hereafter enacted and to add to this Indenture such
         other provisions as may be expressly required by the TIA;

PROVIDED, HOWEVER, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel as to the
enforceability of any such indenture

                                       53

<PAGE>

supplement and to the effect that (i) such indenture supplement is permitted
hereunder and (ii) entering into such indenture supplement will not result in a
"significant modification" of the Bonds under Treasury Regulation Section
1.1001-3 or adversely affect the status of the Bonds as indebtedness for federal
income tax purposes.

         The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.

         (b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Bonds and
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Bonds under this
Indenture; PROVIDED, HOWEVER, that such action as evidenced by an Opinion of
Counsel, (i) is permitted by this Indenture, and shall not (ii) adversely affect
in any material respect the interests of any Bondholder or (iii) if 100% of the
Certificates are not owned by IMH Assets Corp., cause the Issuer to be subject
to an entity level tax for federal income tax purposes.

         Section 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and, with the consent of the
Holders of not less than a majority of the Bond Principal Balance of each Class
of Bonds affected thereby, by Act (as defined in Section 10.03 hereof) of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Bonds under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Bond affected
thereby:

                           (i) change the date of payment of any installment of
         principal of or interest on any Bond, or reduce the principal amount
         thereof or the interest rate thereon, change the provisions of this
         Indenture relating to the application of collections on, or the
         proceeds of the sale of, the Trust Estate to payment of principal of or
         interest on the Bonds, or change any place of payment where, or the
         coin or currency in which, any Bond or the interest thereon is payable,
         or impair the right to institute suit for the enforcement of the
         provisions of this Indenture requiring the application of funds
         available therefor, as provided in Article V, to the payment of any
         such amount due on the Bonds on or after the respective due dates
         thereof;

                           (ii) reduce the percentage of the Bond Principal
         Balances of the Bonds, the consent of the Holders of which is required
         for any such supplemental indenture, or the consent of the Holders of
         which is required for any waiver of compliance with certain provisions
         of this Indenture or certain defaults hereunder and their consequences
         provided for in this Indenture;

                                       54

<PAGE>

                           (iii) modify or alter the provisions of the proviso
         to the definition of the term "Outstanding" or modify or alter the
         exception in the definition of the term "Holder";

                           (iv) reduce the percentage of the Bond Principal
         Balances of the Bonds required to direct the Indenture Trustee to
         direct the Issuer to sell or liquidate the Trust Estate pursuant to
         Section 5.04 hereof;

                           (v) modify any provision of this Section 9.02 except
         to increase any percentage specified herein or to provide that certain
         additional provisions of this Indenture or the Basic Documents cannot
         be modified or waived without the consent of the Holder of each Bond
         affected thereby;

                           (vi) modify any of the provisions of this Indenture
         in such manner as to affect the calculation of the amount of any
         payment of interest or principal due on any Bond on any Payment Date
         (including the calculation of any of the individual components of such
         calculation); or

                           (vii) permit the creation of any lien ranking prior
         to or on a parity with the lien of this Indenture with respect to any
         part of the Trust Estate or, except as otherwise permitted or
         contemplated herein, terminate the lien of this Indenture on any
         property at any time subject hereto or deprive the Holder of any Bond
         of the security provided by the lien of this Indenture; and PROVIDED,
         FURTHER, that such action shall not, as evidenced by an Opinion of
         Counsel, cause the Issuer (if 100% of the Certificates are not owned by
         IMH Assets Corp.) to be subject to an entity level tax.

         Any such action shall not adversely affect in any material respect the
interest of any Holder (other than a Holder who shall consent to such
supplemental indenture) as evidenced by an Opinion of Counsel (provided by the
Person requesting such supplemental indenture) delivered to the Indenture
Trustee.

         No supplemental indenture adverse to the interests of the Derivative
Contract Counterparty shall be entered into without the Derivative Contract
Counterparty's written consent.

         It shall not be necessary for any Act of Bondholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.

         Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Bonds to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

         Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the

                                       55

<PAGE>

modification thereby of the trusts created by this Indenture, the Indenture
Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02
hereof, shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Indenture Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Indenture Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.

         Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Bonds affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the Bonds
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

         Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.

         Section 9.06 REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES. Bonds
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Bonds so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Bonds.

                                       56

<PAGE>

                                    ARTICLE X

                                  Miscellaneous

         Section 10.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

                  (1) a statement that each signatory of such certificate or
         opinion has read or has caused to be read such covenant or condition
         and the definitions herein relating thereto;

                  (2) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                  (3) a statement that, in the opinion of each such signatory,
         such signatory has made such examination or investigation as is
         necessary to enable such signatory to express an informed opinion as to
         whether or not such covenant or condition has been complied with;

                  (4) a statement as to whether, in the opinion of each such
         signatory, such condition or covenant has been complied with; and

                  (5) if the signatory of such certificate or opinion is
         required to be Independent, the statement required by the definition of
         the term "Independent".

         (b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01 (a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days prior to such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited and
a report from a nationally recognized accounting firm verifying such value.

                           (ii) Whenever the Issuer is required to furnish to
         the Indenture Trustee an Officer's Certificate certifying or stating
         the opinion of any signer thereof as to the matters described in clause
         (i) above, the Issuer shall also deliver to the Indenture Trustee an
         Independent Certificate from a nationally recognized accounting firm as
         to the same matters, if the fair value of the securities to be so
         deposited and of all other such securities made the

                                       57

<PAGE>

         basis of any such withdrawal or release since the commencement of the
         then current fiscal year of the Issuer, as set forth in the
         certificates delivered pursuant to clause (i) above and this clause
         (ii), is 10% or more of the Bond Principal Balances of the Bonds, but
         such a certificate need not be furnished with respect to any securities
         so deposited, if the fair value thereof as set forth in the related
         Officer's Certificate is less than $25,000 or less than one percent of
         the Bond Principal Balances of the Bonds.

                           (iii) Whenever any property or securities are to be
         released from the lien of this Indenture, the Issuer shall also furnish
         to the Indenture Trustee an Officer's Certificate certifying or stating
         the opinion of each person signing such certificate as to the fair
         value (within 90 days prior to such release) of the property or
         securities proposed to be released and stating that in the opinion of
         such person the proposed release will not impair the security under
         this Indenture in contravention of the provisions hereof.

                           (iv) Whenever the Issuer is required to furnish to
         the Indenture Trustee an Officer's Certificate certifying or stating
         the opinion of any signer thereof as to the matters described in clause
         (iii) above, the Issuer shall also furnish to the Indenture Trustee an
         Independent Certificate as to the same matters if the fair value of the
         property or securities and of all other property or securities released
         from the lien of this Indenture since the commencement of the
         then-current calendar year, as set forth in the certificates required
         by clause (iii) above and this clause (iv), equals 10% or more of the
         Bond Principal Balances of the Bonds, but such certificate need not be
         furnished in the case of any release of property or securities if the
         fair value thereof as set forth in the related Officer's Certificate is
         less than $25,000 or less than one percent of the then Bond Principal
         Balances of the Bonds.

         Section 10.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.

         Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Seller or the Issuer, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.

         Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

                                       58

<PAGE>

         Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.

         Section 10.03 ACTS OF BONDHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Bondholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Bondholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Bondholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section 10.03
hereof.

         (b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.

         (c) The ownership of Bonds shall be proved by the Bond Registrar.

         (d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Bonds shall bind the Holder of every
Bond issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Bond.

         Section 10.04 NOTICES ETC., TO INDENTURE TRUSTEE ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or act of Bondholders is to be made upon, given or
furnished to or filed with:

                           (i) the Indenture Trustee by any Bondholder or by the
         Issuer shall be sufficient for every purpose hereunder if made, given,
         furnished or filed in writing to or with the Indenture Trustee at the
         Corporate Trust Office. The Indenture Trustee shall promptly transmit
         any notice received by it from the Bondholders to the Issuer; or

                                       59
<PAGE>

                           (ii) the Issuer by the Indenture Trustee or by any
         Bondholder shall be sufficient for every purpose hereunder if in
         writing and mailed first-class, postage prepaid to the Issuer addressed
         to: Impac CMB Trust Series 2003-5, in care of Wilmington Trust Company,
         Rodney Square North, 1100 North Market Street, Wilmington, Delaware
         19990- 0001, Attention: Corporate Trust Administration, or at any other
         address previously furnished in writing to the Indenture Trustee by the
         Issuer. The Issuer shall promptly transmit any notice received by it
         from the Bondholders to the Indenture Trustee.

         Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, mailed first-class
postage pre-paid, to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., Residential Mortgage Monitoring Department, 99
Church Street, New York, New York 10007, (ii) in the case of Standard & Poor's,
at the following address: Standard & Poor's, 55 Water Street, 41st Floor, New
York, New York 10041, Attention of Asset Backed Surveillance Department and
(iii) in the case of Fitch Ratings, at One State Street Plaza, New York, New
York 10004; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.

         Section 10.05 NOTICES TO BONDHOLDERS; WAIVER. Where this Indenture
provides for notice to Bondholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Bondholder affected by such
event, at such Person's address as it appears on the Bond Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Bondholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Bondholder shall affect the sufficiency of such notice with
respect to other Bondholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.

         Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Bondholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.

         In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Bondholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.

         Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.

         Section 10.06 CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.

                                       60

<PAGE>

         The provisions of TIA ss.ss. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

         Section 10.07 EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.

         Section 10.08 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Bonds by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.

         Section 10.09 SEPARABILITY. In case any provision in this Indenture or
in the Bonds shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

         Section 10.10 [RESERVED].

         Section 10.11 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Bonds or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

         Section 10.12 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         Section 10.13 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

         Section 10.14 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
at its expense (which may be counsel to the Indenture Trustee or any other
counsel reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Bondholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.

         Section 10.15 ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Bonds or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith,

                                       61
<PAGE>

against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

         Section 10.16 NO PETITION. The Indenture Trustee, by entering into this
Indenture, and each Bondholder, by accepting a Bond, hereby covenant and agree
that they will not at any time prior to one year from the date of termination
hereof, institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Bonds, this Indenture or any
of the Basic Documents.

         Section 10.17 INSPECTION. The Issuer agrees that, at its expense, on
reasonable prior notice, it shall permit any representative of the Indenture
Trustee, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.

                                       62

<PAGE>

         IN WITNESS WHEREOF, the Issuer and the Indenture 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.

                                          IMPAC CMB TRUST SERIES 2003-5, as
                                          Issuer
                                          Wilmington Trust Company, not in its
                                          individual capacity but solely as
                                          Owner Trustee

                                          By:    /s/ Joann A. Rozell
                                             ----------------------------------
                                          Name:  Joann A. Rozell
                                          Title: Financial Services Officer

                                          DEUTSCHE BANK NATIONAL TRUST
                                          COMPANY , as Indenture Trustee

                                          By:    /s/ James F. Noriega
                                             ----------------------------------
                                          Name:  James F. Noriega
                                          Title: Associate

                                          By:    /s/ Ronaldo Reyes
                                             ----------------------------------
                                          Name:  Ronaldo Reyes
                                          Title: Associate

<PAGE>

STATE OF CALIFORNIA     )
                        ) ss.:
COUNTY OF ORANGE        )

         On this 30th day of April 2003, before me personally appeared James F.
Noriega to me known, who being by me duly sworn, did depose and say, that he is
an Associate of the Indenture Trustee, one of the corporations described in and
which executed the above instrument; and that he signed his name thereto by like
order.

                                                    Notary Public

                                                    /s/ Melanie S. Wong
                                                    ---------------------------
                                                    NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

STATE OF CALIFORNIA     )
                        ) ss.:
COUNTY OF ORANGE        )

         On this 30th day of April 2003, before me personally appeared Ronaldo
Reyes to me known, who being by me duly sworn, did depose and say, that he is an
Associate of the Indenture Trustee, one of the corporations described in and
which executed the above instrument; and that he signed his name thereto by like
order.

                                                    Notary Public

                                                    /s/ Melanie S. Wong
                                                    ---------------------------
                                                    NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

STATE OF DELAWARE       )
                        ) ss.:
COUNTY OF NEW CASTLE    )

         On this 28th day of April 2003, before me personally appeared
Joann A. Rozell to me known, who being by me duly sworn, did depose
and say, that he or she is a Financial Services Officer of the Owner
Trustee, one of the entities described in and which executed the above
instrument; and that he or she signed their name thereto by like order.

                                                       Notary Public

                                                       /s/ Janel R. Havrilla
                                                       ------------------------
                                                       NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

                                   EXHIBIT A-1

                         FORM OF CLASS [A-1][A-2] BONDS

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE
DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF
THE INDENTURE.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                      A-1-1

<PAGE>

                          IMPAC CMB TRUST SERIES 2003-5
                        COLLATERALIZED ASSET-BACKED BONDS
                                CLASS [A-1][A-2]

AGGREGATE BOND PRINCIPAL                              BOND INTEREST
BALANCE:                                              RATE: ______%
$_________________________

INITIAL BOND PRINCIPAL                                BOND NO. ___
BALANCE OF THIS BOND: $___________________

PERCENTAGE INTEREST: _______%                         CUSIP NO. ______________

                  Impac CMB Trust Series 2003-5 (the "Issuer"), a Delaware
statutory trust, for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ($_________________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in May 2003 and ending on or before the Payment Date occurring in
August 2033 (the "Final Scheduled Payment Date") and to pay interest on the Bond
Principal Balance of this Bond (this "Bond") outstanding from time to time as
provided below.

         This Bond is one of a duly authorized issue of the Issuer's
Collateralized Asset-Backed Bonds, Series 2003-5 (the "Bonds"), issued under an
Indenture dated as of April 30, 2003 (the "Indenture"), between the Issuer and
Deutsche Bank National Trust Company, as indenture trustee (the "Indenture
Trustee", which term includes any successor Indenture Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights thereunder of the
Issuer, the Indenture Trustee, and the Holders of the Bonds and the terms upon
which the Bonds are to be authenticated and delivered. All terms used in this
Bond which are defined in the Indenture shall have the meanings assigned to them
in the Indenture.

         Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Bond on all
prior Payment Dates.

         The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
[A-1][A-2] Bonds as described above, and shall be applied as between interest
and principal as provided in the Indenture.

                                      A-1-2

<PAGE>

         All principal and interest accrued on the Bonds, if not previously
paid, will become finally due and payable at the Final Scheduled Payment Date.

         The Bonds are subject to redemption in whole, but not in part, by the
Majority Certificateholder on any Payment Date on or after the earlier of (i)
the Payment Date on which the aggregate Stated Principal Balance of the Mortgage
Loans as of the end of the prior Due Period is less than or equal to 25% of the
aggregate Stated Principal Balance of the Mortgage Loans as of Cut- off Date and
(ii) the Payment Date in May 2013.

         The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class [A- 1][A-2] Bonds,
and each Holder hereof, by its acceptance of this Bond, agrees that (i) such
Bond will be limited in right of payment to amounts available from the Trust
Estate as provided in the Indenture and (ii) such Holder shall have no recourse
to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class [A-1][A-2] Bonds pursuant to the
Indenture and the rights conveyed to the Issuer under the Indenture.

         Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Bond (or
one or more Predecessor Bonds) effected by payments of principal made on any
Payment Date shall be binding upon all Holders of this Bond and of any bond
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

         Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

         If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the Holder of this
Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds,
together with

                                      A-1-3

<PAGE>

accrued and unpaid interest thereon as described in the Indenture. The Indenture
provides that, notwithstanding the acceleration of the maturity of the Bonds,
under certain circumstances specified therein, all amounts collected as proceeds
of the Trust Estate securing the Bonds or otherwise shall continue to be applied
to payments of principal of and interest on the Bonds as if they had not been
declared due and payable.

         The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

         The Holder of this Bond or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Bond with Plan
Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give
rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code as a result of the Issuer, the Seller, the Depositor, the
Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer, any
Subservicer, any other servicer, any administrator, any provider of credit
support, any owner of the Certificates, or any of their Affiliates being a
"Party in Interest" (within the meaning of ERISA) or Disqualified Person (within
the meaning of the Code) with respect to such Holder or Beneficial Owner that is
a Plan and (B) the Bonds are rated investment grade or better and such person
believes that the Bonds are properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat the
Bonds. Alternatively, regardless of the rating of the Bonds, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer
or any successor servicer which opines that the acquisition, holding and
transfer of such Bond or interest therein is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the
Master Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.

         Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

                                      A-1-4

<PAGE>

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Bond (or any one or more Predecessor
Bonds) shall bind the Holder of every Bond issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon such Bond. The Indenture also permits the
Issuer and the Indenture Trustee to amend or waive certain terms and conditions
set forth in the Indenture without the consent of the Holders of the Bonds
issued thereunder.

         Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

         Unless the Certificate of Authentication hereon has been executed by
the Indenture Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.

         AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                      A-1-5

<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: April 30, 2003

                                  IMPAC CMB TRUST SERIES 2003-5

                                  BY: WILMINGTON TRUST COMPANY,
                                      not in its individual capacity but solely
                                      in its capacity as Owner Trustee

                                  By: _________________________________________
                                      Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Class [A-1][A-2] Bonds referred to in the within-mentioned
Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY , as Indenture Trustee

By: ______________________________
    Authorized Signatory

                                      A-1-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

         The following abbreviations, when used in the inscription on the face
of the Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:

         TEN COM   --     as tenants in common
         TEN ENT   --     as tenants by the entireties
         JT TEN    --     as joint tenants with right of survivorship and not as
                          tenants in common
UNIF GIFT MIN ACT  --     __________ Custodian
                          ______________________________
                           (Cust)             (Minor)

                          under Uniform Gifts to Minor Act
                          _____________________
                                                                      (State)

     Additional abbreviations may also be used though not in the above list.

                                      A-1-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

         PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

                     _____________________________________-

                     _____________________________________-

                     _____________________________________-
  (Please print or typewrite name and address, including zip code, of assignee)

________________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________ attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated:________________          ________________________________________________

Signature Guaranteed by ______________________________________________

         NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                      A-1-8

<PAGE>

                                   EXHIBIT A-2

                        FORM OF CLASS [M-1][M-2][B] BONDS

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1 BONDS [AND/,]
CLASS A-2 BONDS [AND THE CLASS [M-1][M-2] BONDS] AS DESCRIBED IN THE INDENTURE.

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE
DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF
THE INDENTURE.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                      A-2-1

<PAGE>

                          IMPAC CMB TRUST SERIES 2003-5
                        COLLATERALIZED ASSET-BACKED BONDS
                               CLASS [M-1][M-2][B]

Aggregate Bond Principal                              Bond Interest
Balance:                                              Rate: Adjustable Rate
$_________________________

Initial Bond Principal                                Bond No. ___
Balance of this Bond: $___________________

Percentage Interest: _______%                         CUSIP No. ______________

         Impac CMB Trust Series 2003-5 (the "Issuer"), a Delaware statutory
trust, for value received, hereby promises to pay to Cede & Co. or registered
assigns, the principal sum of ______________________________ ($___________) in
monthly installments on the twenty-fifth day of each month or, if such day is
not a Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in May 2003 and ending on or before the Payment Date occurring in
August 2033 (the "Final Scheduled Payment Date") and to pay interest on the Bond
Principal Balance of this Bond (this "Bond") outstanding from time to time as
provided below.

         This Bond is one of a duly authorized issue of the Issuer's
Collateralized Asset-Backed Bonds, Series 2003-5 (the "Bonds"), issued under an
Indenture dated as of April 30, 2003 (the "Indenture"), between the Issuer and
Deutsche Bank National Trust Company, as indenture trustee (the "Indenture
Trustee", which term includes any successor Indenture Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights thereunder of the
Issuer, the Indenture Trustee, and the Holders of the Bonds and the terms upon
which the Bonds are to be authenticated and delivered. All terms used in this
Bond which are defined in the Indenture shall have the meanings assigned to them
in the Indenture.

         Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Bond on all
prior Payment Dates.

         The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
[M-1][M-2][B] Bonds as described above, and shall be applied as between interest
and principal as provided in the Indenture.

                                      A-2-2

<PAGE>

         All principal and interest accrued on the Bonds, if not previously
paid, will become finally due and payable at the Final Scheduled Payment Date.

         The Bonds are subject to redemption in whole, but not in part, by the
Majority Certificateholder on any Payment Date on or after the earlier of (i)
the Payment Date on which the aggregate Stated Principal Balance of the Mortgage
Loans is less than or equal to 25% of aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date and (ii) the Payment Date in May 2013.

         The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class [M- 1][M-2][B]
Bonds, and each Holder hereof, by its acceptance of this Bond, agrees that (i)
such Bond will be limited in right of payment to amounts available from the
Trust Estate as provided in the Indenture and (ii) such Holder shall have no
recourse to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets
Corp., Impac Mortgage Holdings, Inc., the Master Servicer or any of their
respective affiliates, or to the assets of any of the foregoing entities, except
the assets of the Issuer pledged to secure the Class [M-1][M-2][B] Bonds
pursuant to the Indenture and the rights conveyed to the Issuer under the
Indenture.

         Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Bond (or
one or more Predecessor Bonds) effected by payments of principal made on any
Payment Date shall be binding upon all Holders of this Bond and of any bond
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

         Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

         If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the Holder of this
Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds,
together with

                                      A-2-3

<PAGE>

accrued and unpaid interest thereon as described in the Indenture. The Indenture
provides that, notwithstanding the acceleration of the maturity of the Bonds,
under certain circumstances specified therein, all amounts collected as proceeds
of the Trust Estate securing the Bonds or otherwise shall continue to be applied
to payments of principal of and interest on the Bonds as if they had not been
declared due and payable.

         The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

         The Holder of this Bond or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Bond with Plan
Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give
rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code as a result of the Issuer, the Seller, the Depositor, the
Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer, any
Subservicer, any other servicer, any administrator, any provider of credit
support, any owner of the Certificates, or any of their Affiliates being a
"Party in Interest" (within the meaning of ERISA) or Disqualified Person (within
the meaning of the Code) with respect to such Holder or Beneficial Owner that is
a Plan and (B) the Bonds are rated investment grade or better and such person
believes that the Bonds are properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat the
Bonds. Alternatively, regardless of the rating of the Bonds, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer
or any successor servicer which opines that the acquisition, holding and
transfer of such Bond or interest therein is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the
Master Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.

         Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

                                      A-2-4

<PAGE>

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Bond (or any one or more Predecessor
Bonds) shall bind the Holder of every Bond issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon such Bond. The Indenture also permits the
Issuer and the Indenture Trustee to amend or waive certain terms and conditions
set forth in the Indenture without the consent of the Holders of the Bonds
issued thereunder.

         Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

         Unless the Certificate of Authentication hereon has been executed by
the Indenture Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.

         AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                      A-2-5

<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: April 30, 2003

                                  IMPAC CMB TRUST SERIES 2003-5

                                  BY: WILMINGTON TRUST COMPANY,
                                      not in its individual capacity but solely
                                      in its capacity as Owner Trustee

                                  By: _________________________________________
                                      Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Class [M-1][M-2][B] Bonds referred to in the within-mentioned
Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY , as Indenture Trustee

By: ______________________________
    Authorized Signatory

                                      A-2-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

         The following abbreviations, when used in the inscription on the face
of the Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:

         TEN COM   --     as tenants in common
         TEN ENT   --     as tenants by the entireties
         JT TEN    --     as joint tenants with right of survivorship and not as
                          tenants in common
UNIF GIFT MIN ACT  --     __________ Custodian
                          ______________________________
                           (Cust)             (Minor)

                          under Uniform Gifts to Minor Act
                          _____________________
                                                                      (State)

     Additional abbreviations may also be used though not in the above list.

                                      A-2-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

         PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

                     _____________________________________-

                     _____________________________________-

                     _____________________________________-
  (Please print or typewrite name and address, including zip code, of assignee)

________________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________ attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated:________________          ________________________________________________

Signature Guaranteed by ______________________________________________

         NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                      A-2-8

<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                             (provided upon request)

                                       B-1

<PAGE>

                                    EXHIBIT C

                          FORM OF INITIAL CERTIFICATION

                                                          _______________, 20__

[Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2003-5

                  Re:      Indenture dated as of April 30, 2003, between Impac
                           CMB Trust Series 2003- 5 and Deutsche Bank National
                           Trust Company

Ladies and Gentlemen:

                  In accordance with Section 2.03(a) of the above-captioned
Indenture, and Section 2.1(b)(i)-(v) of the Mortgage Loan Sale and Contribution
Agreement, dated as of April 30, 2003 between Impac Mortgage Holdings, Inc. and
Impac Funding Corporation (the "MLSCA"; and together with the Indenture, the
"Agreements"), the undersigned, as Indenture 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 exception report attached 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 been reviewed by it and appear regular on
their face and relate to such Mortgage Loan; and (iii) based on examination by
it, and only as to such documents, the information set forth in items (iii) and
(v) of the definition or description of "Mortgage Loan Schedule" is correct.

                  The Indenture Trustee has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Agreements. The Indenture Trustee makes no
representation that any documents specified in clause (v) of Section 2.1 (b) of
the MLSCA should be included in any Mortgage File. The Indenture 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 Indenture Trustee.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Indenture.

                                       C-1

<PAGE>

                                           DEUTSCHE BANK NATIONAL
                                           TRUST COMPANY,
                                           as Indenture Trustee

                                           By:_____________________________
                                              Name:
                                              Title:

                                       C-2

<PAGE>

                                    EXHIBIT D

                           FORM OF FINAL CERTIFICATION

                                                 __________________, 200__

[Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2003-5

                  Re:      Indenture, dated as of April 30, 2003, between Impac
                           CMB Trust Series 2003-5 and Deutsche Bank National
                           Trust Company
                           ----------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.03(b) of the above-captioned
Indenture, and Section 2.1(b) of the Mortgage Loan Sale and Contribution
Agreement, dated as of April 30, 2003, between Impac Mortgage Holdings, Inc. and
Impac Funding Corporation (the "MLSCA"; and together with the Indenture, the
"Agreements"), the undersigned, as Indenture 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 exception report attached hereto) it
has received the documents set forth in Section 2.1(b) of the MLSCA.

                  The Indenture Trustee has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the Agreements. The Indenture Trustee makes no representation that
any documents specified in clause (v) of Section 2.1 (b) should be included in
any Mortgage File. The Indenture 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 Indenture Trustee.

                                       D-1

<PAGE>

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Indenture.

                                                DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Indenture Trustee

                                                By:____________________________
                                                   Name:
                                                   Title:

                                       D-2

<PAGE>

                                    EXHIBIT E

                              DERIVATIVE CONTRACTS

                             (Provided Upon Request)

                                       E-1

<PAGE>

                                    EXHIBIT F

                        SPECIAL CERTIFICATE CAP CONTRACT

                             (Provided Upon Request)

                                       F-1

<PAGE>

                                   APPENDIX A
                                   DEFINITIONS

                  ACCRUAL PERIOD: With respect to each Class of Bonds and any
Payment Date, the period from the preceding Payment Date (or, in the case of the
first Payment Date, from the Closing Date) through the day preceding such
Payment Date.

                  ACCRUED BOND INTEREST: With respect to any Payment Date and
each Class of Bonds, interest accrued during the related Accrual Period on the
Bond Principal Balance at the related Bond Interest Rate on the related Bond
Principal Balance thereof immediately prior to such Payment Date, less such
Bonds' Unpaid Interest Shortfall for such Payment Date, plus any Accrued Bond
Interest remaining unpaid from any prior Payment Date with interest thereon at
the related Bond Interest Rate. Accrued Bond Interest for each Class of Bonds
shall be calculated on the basis of the actual number of days in the Accrual
Period and a 360-day year.

                  ADDITIONAL DERIVATIVE CONTRACT COUNTERPARTY PAYMENT: With
respect to any Payment Date, any termination payments to the Derivative Contract
Counterparty as a result of a default of the Derivative Contract Counterparty
under the related Derivative Contracts.

                  ADJUSTMENT DATE: As to each ARM Loan, each date set forth in
the related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.

                  ADVANCE: As to any Mortgage Loan, any advance made by the
Master Servicer pursuant to Section 4.04 of the Servicing Agreement or by a
Subservicer in respect of delinquent Monthly Payments of principal and interest
pursuant to the related Subservicing Agreement.

                  AFFILIATE: With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "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 and "controlling" and "controlled"
shall have meanings correlative to the foregoing.

                  ALLOCATED REALIZED LOSS AMOUNT: With respect to any of the
Class A-2 Bonds, Class M Bonds and Class B Bonds and any Payment Date, an amount
equal to the sum of any Realized Loss allocated to that Class of Bonds on that
Payment Date and any Allocated Realized Loss Amount for that Class remaining
unpaid from the previous Payment Date.

                  APPRAISED 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 sale 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 obtained at the time of
refinancing.

                  ARM LOANS: At any time, collectively, all the Mortgage Loans
which have adjustable Mortgage Rates.

<PAGE>

                  ASSIGNMENT OF MORTGAGE: 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.

                  AUTHORIZED NEWSPAPER: A newspaper of general circulation in
the Borough of Manhattan, The City of New York, printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.

                  AUTHORIZED OFFICER: With respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).

                  AVAILABLE FUNDS: With respect to any Payment Date, an amount
equal to the amount received by the Indenture Trustee and available in the
Payment Account, which generally is equal to the sum of the following, in each
case with respect to the Mortgage Loans:

                  (a) the sum of:

                           (i) each previously undistributed Monthly Payment due
                  after the Cut-off Date received on or prior to the related
                  Determination Date or advanced prior to such Payment Date
                  (other than Monthly Payments due after the related Due Period,
                  which shall be treated as if received during the Due Period
                  they were due and other than Monthly Payments with respect to
                  which the Master Servicer has made an unreimbursed Advance) on
                  each outstanding Mortgage Loan;

                           (ii) all proceeds of any Mortgage Loan repurchased
                  during the related Prepayment Period (or deemed to have been
                  so repurchased in accordance with the Servicing Agreement)
                  pursuant to the Servicing Agreement and the amount of any
                  shortfall deposited in the Collection Account in connection
                  with the substitution of a Deleted Mortgage Loan pursuant to
                  the Mortgage Loan Sale and Contribution Agreement, during the
                  related Prepayment Period;

                           (iii) all other unscheduled collections (including,
                  without limitation, Principal Prepayments, Insurance Proceeds,
                  Liquidation Proceeds and REO Proceeds) received during the
                  related Prepayment Period to the extent applied by the Master
                  Servicer as recoveries of principal or interest of the related
                  Mortgage Loan pursuant to the Servicing Agreement;

                           (iv) without duplication, any amounts received with
                  respect to a High CLTV Loan that was 180 or more days
                  delinquent in payment of interest (including amounts with
                  respect to principal); and

                                        2

<PAGE>

                           (v) any (i) Compensating Interest payments and (ii)
                  Foreclosure Profits, to the extent not payable to the
                  Subservicers;

                  minus
                  -----

                  (b) the sum of:

                           (i) if the Bonds have been declared due and payable
                  following an Event of Default on such Payment Date, any
                  amounts owed to the Indenture Trustee by the Issuer pursuant
                  to Section 6.07 of the Indenture;

                           (ii) the Net Derivative Fee; and

                           (iii) any other amounts withdrawn from the Collection
                  Account by the Master Servicer pursuant to Section 3.07(a)(ii)
                  through (xv) of the Servicing Agreement or the Indenture
                  Trustee's Fee withdrawn by the Indenture Trustee pursuant to
                  Section 8.02(c) of the Indenture, not described above in
                  clauses (b)(i) through (b)(ii) above.

                  AVAILABLE FUNDS RATE: On any Payment Date, the per annum rate
equal to the product of:

                  (i)      (A)  the product of:

                                    (1) the weighted average of the Net Mortgage
                                    Rates on the Mortgage Loans included in the
                                    trust as of the end of the prior Due Period,
                                    weighted on the basis of the Stated
                                    Principal Balances thereof as of the end of
                                    the prior Due Period and

                                    (2) a fraction equal to

                                            (x) the sum of the aggregate Stated
                                    Principal Balance of the Mortgage Loans as
                                    of the end of the prior Due Period divided
                                    by

                                            (y) the aggregate Bond Principal
                                    Balance of the Class A Bonds, Class M Bonds
                                    and Class B Bonds immediately prior to such
                                    Payment Date, and

                  (ii) a fraction equal to (x) 30 divided by (y) the number of
days in the related Accrual Period.

                  BALLOON LOAN: Each of the Mortgage Loans identified in the
Mortgage Loan Schedule as having an original term to maturity that is shorter
than the related amortization term.

                  BALLOON PAYMENT: With respect to any Balloon Loan, the related
Monthly Payment payable on the stated maturity date of such Balloon Loan.

                                        3

<PAGE>

                  BANKRUPTCY CODE: The Bankruptcy Code of 1978, as amended.

                  BASIC DOCUMENTS: The Trust Agreement, the Certificate of
Trust, the Indenture, the Servicing Agreement, the Mortgage Loan Sale and
Contribution Agreement, the Derivative Contracts, the Special Certificate Cap
Contract and the other documents and certificates delivered in connection with
any of the above.

                  BASIC PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Payment Date, the lesser of (a) the excess of (i) the Available Funds for such
Payment Date over (ii) the aggregate amount of Accrued Bond Interest for the
Bonds for such Payment Date and (b) the excess of (i) the Principal Remittance
Amount for such Payment Date over (ii) the Overcollateralization Release Amount,
if any, for such Payment Date.

                  BASIS RISK SHORTFALL: With respect to any Class of Bonds, on
each Payment Date where clause (iii) of the definition of "Bond Interest Rate"
is less than clauses (i) or (ii) of the definition of "Bond Interest Rate", the
excess, if any, of (x) the aggregate Accrued Bond Interest thereon for such
Payment Date calculated pursuant to the lesser of clause (i) or (ii) of the
definition of Bond Interest Rate over (y) interest accrued on the Mortgage Loans
at the Available Funds Rate.

                  BASIS RISK SHORTFALL CARRY-FORWARD AMOUNT: With respect to
each Class of Bonds and any Payment Date, as determined separately for each
Class of Bonds, an amount equal to the aggregate amount of Basis Risk Shortfall
for such Bonds on such Payment Date, plus any unpaid Basis Risk Shortfall for
such Class of Bonds from prior Payment Dates, plus interest thereon at the Bond
Interest Rate for such Payment Date, to the extent previously unreimbursed by
the Derivative Contracts or by Net Monthly Excess Cash Flow.

                  BENEFICIAL OWNER: With respect to any Bond, the Person who is
the beneficial owner of such Bond as reflected on the books of the Depository or
on the books of a Person maintaining an account with such Depository (directly
as a Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).

                  BOND INTEREST RATE: With respect to each Payment Date and each
Class of Bonds, a floating rate equal to the least of (i) One-Month LIBOR plus
the related Bond Margin, (ii) the Maximum Bond Rate and (iii) the Available
Funds Rate with respect to such Payment Date.

                  BOND MARGIN: With respect to the Class A-1 Bonds, on any
Payment Date prior to the Step-Up Date, 0.330% per annum, and on any Payment
Date thereafter, 0.660% per annum. With respect to the Class A-2 Bonds, on any
Payment Date prior to the Step-Up Date, 0.500% per annum, and on any Payment
Date thereafter, 1.000% per annum. With respect to the Class M-1 Bonds, on any
Payment Date prior to the Step-Up Date, 0.750% per annum, and on any Payment
Date thereafter, 1.125% per annum. With respect to the Class M-2 Bonds, on any
Payment Date prior to the Step-Up Date, 1.750% per annum, and on any Payment
Date thereafter, 2.625% per annum. With respect to the Class B Bonds, on any
Payment Date prior to the Step-Up Date, 3.000% per annum, and on any Payment
Date thereafter, 4.500% per annum.

                  BOND OWNER: The Beneficial Owner of a Bond.

                                       4

<PAGE>

                  BOND PRINCIPAL BALANCE: With respect to any Bond as of any
Determination Date, the initial Bond Principal Balance as stated on the face
thereof, minus all amounts distributed in respect of principal with respect to
such Bond and, in the case of any Class A-2, Class M-1, Class M-2 or Class B
Bond, the aggregate amount of any reductions in the Bond Principal Balance
thereof deemed to have occurred in connection with allocations of Realized
Losses on all prior Payment Dates.

                  BOND REGISTER: The register maintained by the Bond Registrar
in which the Bond Registrar shall provide for the registration of Bonds and of
transfers and exchanges of Bonds.

                  BOND REGISTRAR: The Indenture Trustee, in its capacity as Bond
Registrar, or any successor to the Indenture Trustee in such capacity.

                  BONDHOLDER OR HOLDER: The Person in whose name a Bond is
registered in the Bond Register, except that, any Bond registered in the name of
the Depositor, the Issuer, the Indenture Trustee, the Seller or the Master
Servicer or any Affiliate of any of them shall be deemed not to be a holder or
holders, nor shall any so owned be considered outstanding, for purposes of
giving any request, demand, authorization, direction, notice, consent or waiver
under the Indenture or the Trust Agreement; provided that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Bonds
that a Responsible Officer of the Indenture Trustee or the Owner Trustee
actually knows to be so owned shall be so disregarded. Owners of Bonds that have
been pledged in good faith may be regarded as Holders if the pledgee establishes
to the satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's
right so to act with respect to such Bonds and that the pledgee is not the
Issuer, any other obligor upon the Bonds or any Affiliate of any of the
foregoing Persons.

                  BONDS: The Class A Bonds, Class M Bonds and Class B Bonds
issued and outstanding at any time pursuant to the Indenture.

                  BOOK-ENTRY BONDS: Beneficial interests in the Bonds, ownership
and transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.

                  BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the City of New York, Delaware,
California or in the city in which the corporate trust offices of the Indenture
Trustee are located, are required or authorized by law to be closed.

                  CASH LIQUIDATION: As to any defaulted Mortgage Loan other than
a Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer evidenced in a certificate of a Servicing Officer that it has
received 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 DISTRIBUTION ACCOUNT: The account or accounts
created and maintained pursuant to Section 3.10(c) of the Trust Agreement. The
Certificate Distribution Account shall be an Eligible Account.

                                        5

<PAGE>

                  CERTIFICATE PAYING AGENT: The meaning specified in Section
3.10 of the Trust Agreement.

                  CERTIFICATE PERCENTAGE INTEREST: With respect to each
Certificate, the Certificate Percentage Interest stated on the face thereof.

                  CERTIFICATE REGISTER: The register maintained by the
Certificate Registrar in which the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates.

                  CERTIFICATE REGISTRAR: Initially, the Indenture Trustee, in
its capacity as Certificate Registrar, or any successor to the Indenture Trustee
in such capacity.

                  CERTIFICATE OF TRUST: The Certificate of Trust filed for the
Trust pursuant to Section 3810(a) of the Statutory Trust Statute.

                  CERTIFICATES OR TRUST CERTIFICATES: The Impac CMB Trust Series
2003-5 Trust Certificates, Series 2003-5, evidencing the beneficial ownership
interest in the Issuer and executed by the Owner Trustee in substantially the
form set forth in Exhibit A to the Trust Agreement.

                  CERTIFICATEHOLDER OR HOLDER: The Person in whose name a
Certificate is registered in the Certificate Register. Owners of Certificates
that have been pledged in good faith may be regarded as Holders if the pledgee
establishes to the satisfaction of the Indenture Trustee or the Owner Trustee,
as the case may be, the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Issuer, any other obligor upon the
Certificates or any Affiliate of any of the foregoing Persons.

                  CLASS: Any of the Class A Bonds, Class M Bonds or Class B
Bonds.

                  CLASS A BONDS: The Class A-1 Bonds and the Class A-2 Bonds.

                  CLASS A-1 BONDS: The Class A-1 Bonds in the form attached as
Exhibit A-1 to the Indenture.

                  CLASS A-2 BONDS: The Class A-2 Bonds in the form attached as
Exhibit A-1 to the Indenture.

                  CLASS B BONDS: The Class B Bonds in the form attached as
Exhibit A-2 to the Indenture.

                  CLASS M BONDS: The Class M-1 Bonds and the Class M-2 Bonds.

                  CLASS M-1 BONDS: The Class M-1 Bonds in the form attached as
Exhibit A-2 to the Indenture.

                                        6

<PAGE>

                  CLASS M-2 BONDS: The Class M-2 Bonds in the form attached as
Exhibit A-2 to the Indenture.

                  CLOSING DATE: April 30, 2003

                  CODE: The Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.

                  COLLATERAL: The meaning specified in the Granting Clause of
the Indenture.

                  COLLECTION ACCOUNT: The account or accounts created and
maintained pursuant to Section 3.06(d) of the Servicing Agreement. The
Collection Account shall be an Eligible Account.

                  COLLECTION PERIOD: With respect to each Payment Date, the
calendar month immediately preceding the month in which such Payment Date
occurs.

                  COMBINED LOAN-TO-VALUE RATIO: With respect to any Mortgage
Loan secured by a junior lien and any date, the percentage equivalent of a
fraction, the numerator of which is the Cut-off Date Principal Balance of such
Mortgage Loan and of any mortgage loan or mortgage loans that are secured by
liens on the Mortgaged Property that are senior to the Mortgage and the
denominator of which is the Appraised Value of the related Mortgaged Property.

                  COMMISSION: The Securities and Exchange Commission.

                  COMPENSATING INTEREST: With respect to any Payment Date, the
amount of any Prepayment Interest Shortfalls resulting from prepayments in full
during the preceding calendar month, but only to the extent such Prepayment
Interest Shortfalls do not exceed an amount equal to the lesser of (a)
one-twelfth of 0.125% of the aggregate Stated Principal Balance of the related
Mortgage Loans immediately preceding such Payment Date and (b) the sum of the
Master Servicing Fee and Subservicing Fee for such Payment Date.

                  CORPORATE TRUST OFFICE: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Bond Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at 1761 East
St. Andrew Place, Santa Ana, California 92705, Attention: IM0305. With respect
to the Owner Trustee, the principal corporate trust office of the Owner Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Trust Agreement
is located at Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19801, Attention: Impac CMB Trust Series 2003-5
(IM0305).

                  COUNTRYWIDE: Countrywide Home Loans Servicing LP or its
successor in interest.

                  CUMULATIVE LOSSES: As to any Payment Date and the Mortgage
Loans, the cumulative aggregate amount of Realized Losses on the Mortgage Loans
from the Cut-off Date through the end of the calendar month immediately
preceding such Payment Date.

                                        7

<PAGE>

                  CUT-OFF DATE: With respect to the Mortgage Loans, April 1,
2003, except for the High CLTV Loans for which the Cut-off Date will be the
close of business on March 31, 2003.

                  CUT-OFF DATE BALANCE: The aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date.

                  CUT-OFF DATE PRINCIPAL BALANCE: With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the Cut-off Date after applying
the principal portion of Monthly Payments due on or before such date, whether or
not received, and without regard to any payments due after such date.

                  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: Any occurrence which is or with notice or the lapse
of time or both would become an Event of Default.

                  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 indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
scheduled Monthly Payment that constitutes a permanent forgiveness of principal,
which valuation or reduction results from a proceeding under the Bankruptcy
Code.

                  DEFINITIVE BONDS: The meaning specified in Section 4.06 of the
Indenture.

                  DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced with an Eligible Substitute Mortgage Loan.

                  DEPOSITOR: IMH Assets Corp., a California corporation, or its
successor in interest.

                  DEPOSITORY OR DEPOSITORY AGENCY: The Depository Trust Company
or a successor appointed by the Indenture Trustee. Any successor to the
Depository shall be an organization registered as a "clearing agency" pursuant
to Section 17A of the Exchange Act and the regulations of the Securities and
Exchange Commission thereunder.

                  DEPOSITORY PARTICIPANT: A Person for whom, from time to time,
the Depository effects book-entry transfers and pledges of securities deposited
with the Depository.

                  DERIVATIVE CONTRACTS: The five derivative contracts between
the Seller and the Derivative Contract Counterparty, each for the benefit of the
Bonds and the Certificates, set forth in Exhibit E of the Indenture.

                  DERIVATIVE CONTRACT COUNTERPARTY: Bear Stearns Financial
Products Inc., an affiliate of Bear, Stearns & Co. Inc.

                                        8

<PAGE>

                  DETERMINATION DATE: With respect to any Payment Date, the 15th
of the related month, or if the 15th day of such month is not a Business Day,
the immediately preceding Business Day.

                  DUE DATE: With respect to each Mortgage Loan, the day of the
month on which each scheduled Monthly Payment is due.

                  DUE PERIOD: With respect to any Payment Date and the Non-High
CLTV Loans, the period commencing on the second day of the month immediately
preceding the month of such Payment Date (or, with respect to the first Due
Period, the day following the Cut-off Date) and ending on the first day of the
month of such Payment Date. With respect to any Payment Date and the High CLTV
Loans, the period is the calendar month preceding the month of such Payment
Date.

                  ELIGIBLE ACCOUNT: An account that is any of the following: (i)
maintained with a depository institution the short term deposits of which have
been rated by each Rating Agency in its highest rating available, or (ii) an
account or accounts in a depository institution in which such accounts are fully
insured to the limits established by the FDIC, PROVIDED that any deposits not so
insured shall, to the extent acceptable each to Rating Agency, as evidenced in
writing, be maintained such that (as evidenced by an Opinion of Counsel
delivered to the Indenture Trustee and each Rating Agency) the Indenture Trustee
has a claim with respect to the funds in such account or a perfected first
security interest against any collateral (which shall be limited to Eligible
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (iii) in the case of the Collection Account or Servicing Account,
either (A) a trust account or accounts maintained at the corporate trust
department of the Indenture Trustee or (B) an account or accounts maintained at
the corporate trust department of the Indenture Trustee or the Subservicer (or
an affiliate thereof), as long as their short term debt obligations are rated
F-1 by Fitch Ratings, P-1 by Moody's and A-1 by Standard & Poor's or better and
their long term debt obligations are rated A by Fitch Ratings, A2 by Moody's and
A by Standard & Poor's or better, or (iv) in the case of the Collection Account
and the Payment Account, a trust account or accounts maintained in the corporate
trust division of the Indenture Trustee, or (v) an account or accounts of a
depository institution acceptable to each Rating Agency as evidenced in writing
by each Rating Agency that use of any such account as the Collection Account or
the Payment Account will not reduce the rating assigned to any of the Securities
by such Rating Agency below investment grade.

                  ELIGIBLE INVESTMENTS: One or more of the following:

                  (i) obligations of or guaranteed as to principal and interest
by the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;

                  (ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of acquisition thereof,
provided that the unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in its highest
short-term rating available;

                                        9

<PAGE>

                  (iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars of any U.S.
depository institution or trust company incorporated under the laws of the
United States or any state thereof or of any domestic branch of a foreign
depository institution or trust company; provided that the debt obligations of
such depository institution or trust company (or, if the only Rating Agency is
Standard & Poor's, in the case of the principal depository institution in a
depository institution holding company, debt obligations of the depository
institution holding company) at the date of acquisition thereof have been rated
by each Rating Agency in its highest short-term rating available; and provided
further that, if the only Rating Agency is Standard & Poor's and if the
depository or trust company is a principal subsidiary of a bank holding company
and the debt obligations of such subsidiary are not separately rated, the
applicable rating shall be that of the bank holding company; and, provided
further that, if the original maturity of such short-term obligations of a
domestic branch of a foreign depository institution or trust company shall
exceed 30 days, the short-term rating of such institution shall be A-1+ in the
case of Standard & Poor's if Standard & Poor's is the Rating Agency;

                  (iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the United
States or any state thereof which on the date of acquisition has been rated by
Moody's and Standard & Poor's in their highest short-term ratings available;
provided that such commercial paper shall have a remaining maturity of not more
than 30 days;

                  (v) a money market fund or a qualified investment fund rated
by Moody's in its highest long-term ratings available and rated AAAm or AAAm-G
by Standard & Poor's, including any such funds for which Deutsche Bank National
Trust Company or any affiliate thereof serves as an investment advisor, manager,
administrator, shareholder, servicing agent, and/or custodian or sub- custodian;
and

                  (vi) other obligations or securities that are acceptable to
each Rating Agency as a Permitted Investment hereunder and will not reduce the
rating assigned to any Class of Bonds by such Rating Agency below the lower of
the then-current rating or the rating assigned to such Bonds as of the Closing
Date by such Rating Agency, as evidenced in writing;

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

                  ELIGIBLE SUBSTITUTE MORTGAGE LOAN: A Mortgage Loan substituted
by the Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officer's Certificate delivered to the
Indenture 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

                                       10

<PAGE>

outstanding principal balance, after such deduction), not in excess of the
outstanding principal balance of the Deleted Mortgage Loan (the amount of any
shortfall to be deposited by the Seller in the Collection Account in the month
of substitution); (ii) comply with each non-statistical representation and
warranty set forth in Section 3.1(b) of the Mortgage Loan Sale and Contribution
Agreement as of the date of substitution; (iii) have a Mortgage Rate no lower
than and not more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan as of the date of substitution; (iv) have a Loan-to-Value Ratio
and a Combined Loan-to-Value Ratio at the time of substitution no higher than
that of the Deleted Mortgage Loan at the time of substitution; (v) have a
remaining term to stated maturity not greater than (and not more than one year
less than) that of the Deleted Mortgage Loan; (vi) not be 30 days or more
delinquent; (vii) be an adjustable-rate first lien mortgage loan, if being
substituted for an ARM Loan; (viii) be a fixed-rate first lien mortgage loan, if
being substituted for a Fixed Rate First Lien Loan; and (ix) be a fixed-rate
second lien mortgage loan, if being substituted for a Fixed Rate Second Lien
Loan.

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

                  EVENT OF DEFAULT: With respect to the Indenture, 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):

                           (i) a failure by the Issuer to pay (a) Accrued Bond
                  Interest on any Class of Bonds or the Principal Distribution
                  Amount with respect to a Payment Date on such Payment Date or
                  (b) the Unpaid Interest Shortfall with respect to any Class of
                  Bonds, but only, with respect to clause (b), to the extent
                  funds are available to make such payment as provided in the
                  Indenture;

                           (ii) the failure by the Issuer on the Final Scheduled
                  Payment Date to reduce the Bond Principal Balance of either
                  the Class A Bonds or the Class B Bonds to zero; or

                           (iii) there occurs a default in the observance or
                  performance of any covenant or agreement of the Issuer made in
                  the Indenture, or any representation or warranty of the Issuer
                  made in the Indenture or in any certificate or other writing
                  delivered pursuant hereto or in connection herewith proving to
                  have been incorrect in any material respect as of the time
                  when the same shall have been made, and such default shall
                  continue or not be cured, or the circumstance or condition in
                  respect of which such representation or warranty was incorrect
                  shall not have been eliminated or otherwise cured, for a
                  period of 30 days after there shall have been given, by
                  registered or certified mail, to the Issuer by the Indenture
                  Trustee or to the Issuer and the Indenture Trustee by the
                  Holders of at least 25% of the aggregate Bond Principal
                  Balance of the Outstanding Bonds, a written notice specifying
                  such default or incorrect representation or warranty and
                  requiring it to be remedied and stating that such notice is a
                  notice of default hereunder; or

                                       11

<PAGE>

                           (iv) there occurs the filing of a decree or order for
                  relief by a court having jurisdiction in the premises in
                  respect of the Issuer or any substantial part of the Trust
                  Estate in an involuntary case under any applicable federal or
                  state bankruptcy, insolvency or other similar law now or
                  hereafter in effect, or appointing a receiver, liquidator,
                  assignee, custodian, trustee, sequestrator or similar official
                  of the Issuer or for any substantial part of the Trust Estate,
                  or ordering the winding-up or liquidation of the Issuer's
                  affairs, and such decree or order shall remain unstayed and in
                  effect for a period of 60 consecutive days; or

                           (v) there occurs the commencement by the Issuer of a
                  voluntary case under any applicable federal or state
                  bankruptcy, insolvency or other similar law now or hereafter
                  in effect, or the consent by the Issuer to the entry of an
                  order for relief in an involuntary case under any such law, or
                  the consent by the Issuer to the appointment or taking
                  possession by a receiver, liquidator, assignee, custodian,
                  trustee, sequestrator or similar official of the Issuer or for
                  any substantial part of the assets of the Trust Estate, or the
                  making by the Issuer of any general assignment for the benefit
                  of creditors, or the failure by the Issuer generally to pay
                  its debts as such debts become due, or the taking of any
                  action by the Issuer in furtherance of any of the foregoing.

                  EVENT OF SERVICER TERMINATION: With respect to the Servicing
Agreement, a Servicing Default as defined in Section 6.01 of the Servicing
Agreement.

                  EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Payment Date, the lesser of (a) the Net Monthly Excess Cash Flow for such
Payment Date and (b) the Overcollateralization Increase Amount for such Payment
Date.

                  EXCHANGE ACT: The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

                  EXPENSE FEE RATE: With respect to each Mortgage Loan, the sum
of the Master Servicing Fee Rate, the Subservicing Fee Rate, the Indenture
Trustee's Fee Rate, the Owner Trustee's Fee Rate, the Radian PMI Rate, if such
Mortgage Loan is a Radian PMI Insured Loan, and the Net Derivative Fee Rate.

                  EXPENSES: The meaning specified in Section 7.02 of the Trust
Agreement.

                  FANNIE MAE: Fannie Mae (formerly, the Federal National
Mortgage Association), or any successor thereto.

                  FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.

                  FINAL CERTIFICATION: The final certification delivered by the
Indenture Trustee pursuant to Section 2.03(b) of the Indenture in the form
attached thereto as Exhibit D.

                                       12

<PAGE>

                  FINAL SCHEDULED PAYMENT DATE: With respect to each Class of
Bonds, the Payment Date in August 2033.

                  FITCH RATINGS: Fitch, Inc., or its successor in interest.

                  FIXED RATE FIRST LIEN LOANS: At any time, collectively, all
the Mortgage Loans which have fixed Mortgage Rates and are each secured by first
liens.

                  FIXED RATE LOANS: At any time, collectively, all the Mortgage
Loans which have fixed Mortgage Rates.

                  FIXED RATE SECOND LIEN LOANS: At any time, collectively, all
the Mortgage Loans which have fixed Mortgage Rates and are each secured by
second liens.

                  FORECLOSURE PROFIT: With respect to a Liquidated Mortgage
Loan, the amount, if any, by which (i) the aggregate of its Net Liquidation
Proceeds exceeds (ii) the related Stated Principal Balance (plus accrued and
unpaid interest thereon at the applicable Mortgage Rate from the date interest
was last paid through the date of receipt of the final Liquidation Proceeds) of
such Liquidated Mortgage Loan immediately prior to the final recovery of its
Liquidation Proceeds.

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

                  GRANT: Pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of such collateral or other agreement or
instrument and all other moneys payable thereunder, to give and receive notices
and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party is
or may be entitled to do or receive thereunder or with respect thereto.

                  GROSS MARGIN: With respect to any ARM Loan, the percentage set
forth as the "Gross Margin" for such Mortgage Loan on the Mortgage Loan
Schedule, as adjusted from time to time in accordance with the terms of the
Servicing Agreement.

                  HIGH CLTV LOANS: At any time, collectively, all the Mortgage
Loans which have been identified as such on the Mortgage Loan Schedule.

                  IMPAC HOLDINGS: Impac Mortgage Holdings, Inc., a Maryland
corporation, and its successors and assigns.

                  INDEMNIFIED PARTY: The meaning specified in Section 7.02 of
the Trust Agreement.

                                       13

<PAGE>

                  INDENTURE: The indenture dated as of April 30, 2003, between
the Issuer and the Indenture Trustee, relating to the Impac CMB Trust Series
2003-5 Bonds.

                  INDENTURE TRUSTEE: Deutsche Bank National Trust Company, and
its successors and assigns.

                  INDENTURE TRUSTEE'S FEE: With respect to any Payment Date, one
month's interest accrued at the Indenture Trustee's Fee Rate on the Stated
Principal Balance of each Mortgage Loan as of the first day of the related Due
Period.

                  INDENTURE TRUSTEE'S FEE RATE: On each Mortgage Loan, a rate
equal to 0.00875% per annum.

                  INDEPENDENT: When used with respect to any specified Person,
the Person (i) is in fact independent of the Issuer, any other obligor on the
Bonds, the Seller, the Master Servicer, the Depositor and any Affiliate of any
of the foregoing Persons, (ii) does not have any direct financial interest or
any material indirect financial interest in the Issuer, any such other obligor,
the Seller, the Master Servicer, the Depositor or any Affiliate of any of the
foregoing Persons and (iii) is not connected with the Issuer, any such other
obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any
of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.

                  INDEPENDENT CERTIFICATE: A certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, made by an independent appraiser or other expert appointed by an
Issuer Request and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has
read the definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.

                  INDEX: With respect to any ARM Loan, the index for the
adjustment of the Mortgage Rate set forth as such on the related Mortgage Note.

                  INITIAL BOND PRINCIPAL BALANCE: With respect to the Class A-1
Bonds, $228,900,000, with respect to the Class A-2 Bonds, $14,850,000, with
respect to the Class M-1 Bonds, $22,500,000, with respect to the Class M-2
Bonds, $17,250,000 and with respect to the Class B Bonds, $15,000,000.

                  INITIAL CERTIFICATION: The initial certification delivered by
the Indenture Trustee pursuant to Section 2.03(a) of the Indenture in the form
attached thereto as Exhibit C.

                  INITIAL SUBSERVICERS: With respect to all of the Fixed Rate
Second Lien Loans, Wendover or its successors in interest. With respect to all
of the Fixed Rate First Lien Loans, Countrywide or its successors in interest.
With respect to all of the ARM Loans, initially Wendover, which subservicing
will be transferred to Countrywide or an affiliate thereof on or about July 1,
2003.

                                       14

<PAGE>

                  INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to
any insurance policy covering a Mortgage Loan which are required to be remitted
to the Master Servicer, net of any component thereof (i) covering any expenses
incurred by or on behalf of the Master Servicer in connection with obtaining
such proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property or (iii) released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures.

                  INTEREST DETERMINATION DATE: With respect to the first Accrual
Period, the second LIBOR Business Day preceding the Closing Date, and with
respect to each Accrual Period thereafter, the second LIBOR Business Day
preceding the related Payment Date on which such Accrual Period commences.

                  INTEREST RATE ADJUSTMENT DATE: With respect to each ARM Loan,
the date or dates on which the Mortgage Rate is adjusted in accordance with the
related Mortgage Note.

                  INTEREST REMITTANCE AMOUNT: For any Payment Date, that portion
of the Available Funds for such Payment Date that represents interest received
or paid as an Advance on the Mortgage Loans.

                  INVESTMENT COMPANY ACT: The Investment Company Act of 1940, as
amended, and any amendments thereto.

                  IRS: The Internal Revenue Service.

                  ISSUER: Impac CMB Trust Series 2003-5, a Delaware statutory
trust, or its successor in interest.

                  ISSUER REQUEST: A written order or request signed in the name
of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee.

                  LIBOR BUSINESS DAY: A day on which banks are open for dealing
in foreign currency and exchange in London and New York City.

                  LIEN: Any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the UCC
(other than any such financing statement filed for informational purposes only)
or comparable law of any jurisdiction to evidence any of the foregoing;
PROVIDED, HOWEVER, that any assignment pursuant to Section 6.02 of the Servicing
Agreement shall not be deemed to constitute a Lien.

                  LIFETIME RATE CAP: With respect to each ARM Loan with respect
to which the related Mortgage Note provides for a lifetime rate cap, the maximum
Mortgage Rate permitted over the life

                                       15

<PAGE>

of such Mortgage Loan under the terms of such Mortgage Note, as set forth on the
Mortgage Loan Schedule and initially as set forth on Exhibit A to the Servicing
Agreement.

                  LIQUIDATED MORTGAGE LOAN: With respect to any Payment Date,
any Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified in the Servicing Agreement,
as of the end of the related Due Period that substantially all Liquidation
Proceeds which it reasonably expects to recover with respect to the disposition
of the related Mortgaged Property or REO Property have been recovered. In
addition, the Master Servicer will treat any High CLTV Loan that is 180 days or
more delinquent as having been finally liquidated.

                  LIQUIDATION EXPENSES: Out-of-pocket expenses (exclusive of
overhead) which are incurred by or on behalf of the Master Servicer in
connection with the liquidation of any Mortgage Loan and not recovered under any
insurance policy, such expenses including, without limitation, legal fees and
expenses, any unreimbursed amount expended (including, without limitation,
amounts advanced to correct defaults on any mortgage loan which is senior to
such Mortgage Loan and amounts advanced to keep current or pay off a mortgage
loan that is senior to such Mortgage Loan) respecting the related Mortgage Loan
and any related and unreimbursed expenditures for real estate property taxes or
for property restoration, preservation or insurance against casualty loss or
damage.

                  LIQUIDATION PROCEEDS: Proceeds (including Insurance Proceeds)
received in connection with the liquidation of any Mortgage Loan or related REO
Property, whether through trustee's sale, foreclosure sale or otherwise.

                  LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan, as of
any date of determination, a fraction expressed as a percentage, the numerator
of which is the then current principal amount of the Mortgage Loan, and the
denominator of which is the Appraised Value of the related Mortgaged Property.

                  LOAN YEAR: With respect to any ARM Loan, the one-year period
commencing on the day succeeding the origination of such Mortgage Loan and
ending on the anniversary date of such Mortgage Loan, and each annual period
thereafter.

                  LOST NOTE AFFIDAVIT: With respect to any Mortgage Loan as to
which the original Mortgage Note has been lost or destroyed and has not been
replaced, an affidavit from the Seller certifying that the original Mortgage
Note has been lost, misplaced or destroyed (together with a copy of the related
Mortgage Note).

                  MAJORITY CERTIFICATEHOLDER: A Holder of a 50.01% or greater
Certificate Percentage Interest of the Certificates.

                  MASTER SERVICER: Impac Funding Corporation, a California
corporation, and its successors and assigns.

                  MASTER SERVICING FEE: With respect to each Mortgage Loan and
any Payment Date, the fee payable monthly to the Master Servicer in respect of
master servicing compensation that

                                       16

<PAGE>

accrues at an annual rate equal to the Master Servicing Fee Rate multiplied by
the Stated Principal Balance of such Mortgage Loan as of the related Due Date in
the related Due Period.

                  MASTER SERVICING FEE RATE: With respect to any Mortgage Loan,
0.030% per annum.

                  MAXIMUM BOND RATE: 12.00% per annum.

                  MAXIMUM MORTGAGE RATE: With respect to each ARM Loan, the
maximum Mortgage Rate.

                  MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.

                  MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.

                  MIN: The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R)System.

                  MINIMUM MORTGAGE RATE: With respect to each ARM Loan, the
minimum Mortgage Rate.

                  MOM LOAN: With respect to any Mortgage Loan, MERS acting as
the mortgagee of such Mortgage Loan, solely as nominee for the originator of
such Mortgage Loan and its successors and assigns, at the origination thereof.

                  MONTHLY PAYMENT: With respect to any Mortgage Loan (including
any REO Property) and any Due Date, the payment of principal and interest due
thereon in accordance with the amortization schedule at the time applicable
thereto (after adjustment, if any, for partial Principal Prepayments and for
Deficient Valuations occurring prior to such Due Date but before any adjustment
to such amortization schedule by reason of any bankruptcy, other than a
Deficient Valuation, 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 other instrument
creating a first lien on an estate in fee simple interest in real property
securing a Mortgage Loan.

                  MORTGAGE FILE: The file containing the Related Documents
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to the Mortgage Loan Sale and
Contribution Agreement or the Servicing Agreement.

                  MORTGAGE LOANS: The Mortgage Loans that will be transferred
and assigned to the Trust pursuant to Section 2.03(a) of the Indenture, each
Mortgage Loan so held being identified in the Mortgage Loan Schedule.

                                       17

<PAGE>

                  MORTGAGE LOAN SALE AND CONTRIBUTION AGREEMENT: The Mortgage
Loan Sale and Contribution Agreement, dated as of the Closing Date, between the
Seller, as seller, and the Purchaser, as purchaser, relating to the sale,
transfer and assignment of the Mortgage Loans.

                  MORTGAGE LOAN SCHEDULE: With respect to any date, the schedule
of Mortgage Loans held by the Issuer on such date. The schedule of Mortgage
Loans as of the Cut-off Date is the schedule set forth in Exhibit B of the
Indenture, which schedule sets forth as 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 original Mortgage Rate;

                           (iv) the maturity date;

                           (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 Cut-off Date Principal Balance;

                           (x) the Index and the Gross Margin, if applicable;

                           (xi) the Adjustment Date frequency and Payment Date
                  frequency, if applicable;

                           (xii) the occupancy status;

                           (xiii) the purpose of the Mortgage Loan;

                           (xiv) the Appraised Value of the Mortgaged Property;

                           (xv) (A) the original term to maturity and (B) if
                  such Mortgage Loan is a Balloon Loan, the amortization term
                  thereof;

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

                           (xvii) whether the Mortgage Loan is a Balloon
                  Mortgage Loan or a Mortgage Loan the terms of which do not
                  provide for a Balloon Payment;

                                       18

<PAGE>

                           (xviii) the Loan-to-Value Ratio or Combined
                  Loan-to-Value Ratio (as applicable);

                           (xix) whether such Mortgage Loan is a Fixed Rate Loan
                  or an ARM Loan;

                           (xx) whether such Mortgage Loan is a Radian PMI
                  Insured Loan, and if so, the related Radian PMI Rate;

                           (xxi) whether such Mortgage Loan is a High CLTV Loan;
                  and

                           (xxii) 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.

                  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, including real
property and improvements thereon, securing a Mortgage Loan.

                  MORTGAGOR: The obligor or obligors under a Mortgage Note.

                  NET DERIVATIVE CONTRACT PAYMENT AMOUNT: With respect to any
Payment Date, the amount equal to the excess, if any, of (a) the aggregate
amount payable on that Payment Date to the Issuer from the Derivative Contract
Counterparty pursuant to the Derivative Contracts, over (b) the aggregate amount
payable on that Payment Date to the Derivative Contract Counterparty under the
Derivative Contracts.

                  NET DERIVATIVE FEE: With respect to any Payment Date, the
amount equal to the excess, if any, of (a) the aggregate amount payable on that
Payment Date to the Derivative Contract Counterparty in respect of the
Derivative Contracts over (b) the aggregate amount payable on that Payment Date
to the Issuer from the Derivative Contract Counterparty pursuant to the
Derivative Contracts.

                  NET DERIVATIVE FEE RATE: With respect to any Payment Date, the
fraction expressed as a rate per annum equal to (a) the Net Derivative Fee on
such Payment Date over (b) the aggregate Stated Principal Balance of the
Mortgage Loans.

                  NET LIQUIDATION PROCEEDS: With respect to any Liquidated
Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.

                                       19

<PAGE>

                  NET MONTHLY EXCESS CASH FLOW: For any Payment Date, the sum of
(a) any Overcollateralization Release Amount and (b) the excess of (x) the
Available Funds for such Payment Date over (y) the sum for such Payment Date of
(A) the aggregate amount of Accrued Bond Interest for the Bonds and (B) the
Principal Remittance Amount.

                  NET MORTGAGE RATE: With respect to any Mortgage Loan and any
day, the related Mortgage Rate less the Expense Fee Rate.

                  NINETY DAY ROLLING DELINQUENCY PERCENTAGE: For any Payment
Date, the three-month average of the aggregate Stated Principal Balance of the
Mortgage Loans that are 90 or more days delinquent, in foreclosure or converted
to REO Properties as of the close of business on the last day of the preceding
calendar month. For purposes of the foregoing calculations, a mortgage loan is
considered "90 days" delinquent if a payment due on the first day of a month has
not been received by the second day of the third following month.

                  NON-HIGH CLTV LOANS: At any time, collectively, all the
Mortgage Loans which are not High CLTV Loans.

                  NONRECOVERABLE ADVANCE: Any advance (i) which was previously
made or is proposed to be made by the Master Servicer; and (ii) 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 by the Master Servicer
from Liquidation Proceeds, Insurance Proceeds or future payments on any Mortgage
Loan. The Indenture Trustee may conclusively rely on any determination of
nonrecoverability made by the Master Servicer.

                  OFFICER'S CERTIFICATE: With respect to the Master Servicer, a
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the Master Servicer and delivered
to the Indenture Trustee. With respect to the Issuer, a certificate signed by
any Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, and delivered to the Indenture Trustee. Unless otherwise specified,
any reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.

                  ONE-MONTH LIBOR: With respect to any Accrual Period, the rate
determined by the Indenture Trustee on the related Interest Determination Date
on the basis of the London interbank offered rate for one-month United States
dollar deposits, as such rates appear on the Telerate Screen Page 3750, as of
11:00 a.m. (London time) on such Interest Determination Date.

                  In the event that on any Interest Determination Date, Telerate
Screen 3750 fails to indicate the London interbank offered rate for one-month
United States dollar deposits, then One-Month LIBOR for the related Interest
Accrual Period will be established by the Indenture Trustee as follows:

                           (i) If on such Interest Determination Date two or
                  more Reference Banks provide such offered quotations,
                  One-Month LIBOR for the related Accrual Period

                                       20

<PAGE>

                  shall be the arithmetic mean of such offered quotations
                  (rounded upwards if necessary to the nearest whole multiple of
                  1/16%).

                           (ii) If on such Interest Determination Date fewer
                  than two Reference Banks provide such offered quotations,
                  One-Month LIBOR for the related Accrual Period shall be the
                  higher of (i) One-Month LIBOR as determined on the previous
                  Interest Determination Date and (ii) the Reserve Interest
                  Rate.

                  The establishment of One-Month LIBOR on each Interest
Determination Date by the Indenture Trustee and the Indenture Trustee's
calculation of the rate of interest applicable for the related Accrual Period
shall (in the absence of manifest error) be final and binding.

                  OPINION OF COUNSEL: A written opinion of counsel acceptable to
the Indenture Trustee in its reasonable discretion which counsel may be in-house
counsel for the Master Servicer if acceptable to the Indenture Trustee and the
Rating Agencies or counsel for the Depositor, as the case may be.

                  ORIGINAL VALUE: Except in the case of a refinanced Mortgage
Loan, the lesser of the Appraised Value or sales price of Mortgaged Property at
the time a Mortgage Loan is closed, and for a refinanced Mortgage Loan, the
Original Value is the value of such property set forth in an appraisal
acceptable to the Master Servicer.

                  OUTSTANDING: With respect to the Bonds, as of the date of
determination, all Bonds theretofore executed, authenticated and delivered under
this Indenture except:

                           (i) Bonds theretofore canceled by the Bond Registrar
                  or delivered to the Indenture Trustee for cancellation; and

                           (ii) Bonds in exchange for or in lieu of which other
                  Bonds have been executed, authenticated and delivered pursuant
                  to the Indenture unless proof satisfactory to the Indenture
                  Trustee is presented that any such Bonds are held by a holder
                  in due course.

                  OUTSTANDING MORTGAGE LOAN: As to any Due Date, a Mortgage Loan
(including an REO Property) which was not (i) the subject of a Principal
Prepayment in Full, Cash Liquidation or REO Disposition and which was not
purchased, deleted or substituted for prior to such Due Date pursuant to the
Servicing Agreement or (ii) with respect to a High CLTV Loan, 180 days or more
delinquent during any preceding Collection Period as of such Payment Date.

                  OVERCOLLATERALIZATION INCREASE AMOUNT: As of any Payment Date,
the excess, if any, of (a) the Overcollateralization Target Amount over (B) the
Overcollateralized Amount for such Payment Date (after taking into account the
payments to the Bonds of the Basic Principal Distribution Amount on such Payment
Date).

                  OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any
Payment Date, the lesser of (x) the Principal Remittance Amount for such Payment
Date and (y) the excess, if any, of (i) the

                                       21

<PAGE>

Overcollateralized Amount for such Payment Date (assuming that 100% of the
Principal Remittance Amount is applied as a principal payment on such Payment
Date) over (ii) the Overcollateralization Target Amount for such Payment Date.

                  OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any
Payment Date, 0.50% of the aggregate Cut-off Date Principal Balance.

                  OVERCOLLATERALIZED AMOUNT: As of any Payment Date, the amount,
if any, by which (a) the aggregate principal balance of the Mortgage Loans
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or Advanced, and unscheduled collections of
principal received during the related Prepayment Period and after reduction for
Realized Losses incurred during the related Prepayment Period) exceeds (b) the
aggregate Bond Principal Balance of the Bonds as of such Payment Date (after
giving effect to distributions to be made on such Payment Date).

                  OWNER TRUST ESTATE: The corpus of the Issuer created by the
Trust Agreement which consists of items referred to in Section 3.01 of the Trust
Agreement.

                  OWNER TRUSTEE: Wilmington Trust Company and its successors and
assigns.

                  OWNER TRUSTEE'S FEE: With respect to any Payment Date the
product of (i) the Owner Trustee's Fee Rate divided by 12 and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the first day of the
related Due Period.

                  OWNER TRUSTEE'S FEE RATE: On each Mortgage Loan, a rate equal
to 0.0017% per annum.

                  PAYING AGENT: Any paying agent or co-paying agent appointed
pursuant to Section 3.03 of the Indenture, which initially shall be the
Indenture Trustee.

                  PAYMENT ACCOUNT: The account established by the Indenture
Trustee pursuant to Section 3.01 of the Indenture. The Payment Account shall be
an Eligible Account.

                  PAYMENT DATE: The 25th day of each month, or if such day is
not a Business Day, then the next Business Day.

                  PERCENTAGE INTEREST: With respect to any Bond, the percentage
obtained by dividing the Bond Principal Balance of such Bond by the aggregate
Bond Principal Balances of all Bonds of that Class. With respect to any
Certificate, the percentage as stated on the face thereof.

                  PERIODIC RATE CAP: With respect to any ARM Loan, the maximum
rate, if any, by which the Mortgage Rate on such Mortgage Loan can adjust on any
Adjustment Date, as stated in the related Mortgage Note or Mortgage.

                                       22

<PAGE>

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

                  PLAN: Any employee benefit plan or certain other retirement
plans and arrangements, 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 are subject to ERISA or Section 4975 of the Code.

                  PLAN ASSETS: Assets of a Plan within the meaning of Department
of Labor regulation 29 C.F.R.ss.2510.3-101.

                  POOL BALANCE: With respect to any date of determination, the
aggregate of the Stated Principal Balances of all Mortgage Loans as of such
date.

                  PREPAYMENT INTEREST SHORTFALL: As to any Payment Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of interest accrued during the related
Prepayment Period at the Net Mortgage Rate on the Stated Principal Balance of
such Mortgage Loan over the sum of the amount of interest (less interest at the
related Expense Fee Rate) paid by the Mortgagor for such Prepayment Period to
the date of such Principal Prepayment in Full and any Advances made by the
Master Servicer pursuant to Section 4.04 of the Servicing Agreement or (b) a
partial Principal Prepayment during the related Prepayment Period, an amount
equal to the interest at the Mortgage Rate (less the Subservicing Fee Rate)
during the related Prepayment Period on the amount of such partial Principal
Prepayment.

                  PREPAYMENT PERIOD: With respect to each Mortgage Loan and any
Payment Date, the prior calendar month.

                  PRIMARY INSURANCE POLICY: Each primary policy of mortgage
guaranty insurance issued by a Qualified Insurer or any replacement policy
therefor, including the Radian Lender-Paid PMI Policies.

                  PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Payment
Date, the Basic Principal Distribution Amount plus the Extra Principal
Distribution Amount.

                  PRINCIPAL PREPAYMENT: Any payment of principal or other
recovery on a Mortgage Loan, including a recovery that takes the form of
Liquidation Proceeds or Insurance Proceeds, which is received in advance of its
scheduled Due Date and is not accompanied by an amount as to interest
representing scheduled interest on such payment due on any date or dates in any
month or months subsequent to the month of prepayment.

                  PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment made by
a Mortgagor of the entire principal balance of a Mortgage Loan.

                                       23

<PAGE>

                  PRINCIPAL REMITTANCE AMOUNT: With respect to any Payment Date,
the sum of the following:

                           (i) the principal portion of each previously
                  undistributed Monthly Payment due after the Cut-off Date
                  received on or prior to the related Determination Date or
                  advanced prior to such Payment Date (other than Monthly
                  Payments due after the related Due Period, which shall be
                  treated as if received during the Due Period they were due) on
                  each Outstanding Mortgage Loan;

                           (ii) the principal portion of all proceeds of any
                  Mortgage Loan repurchased during the related Prepayment Period
                  (or deemed to have been so repurchased in accordance with the
                  Servicing Agreement) pursuant to the Servicing Agreement and
                  the amount of any shortfall deposited in the Collection
                  Account in connection with the substitution of a Deleted
                  Mortgage Loan pursuant to the Mortgage Loan Sale and
                  Contribution Agreement during the related Collection Period;
                  and

                           (iii) the principal portion of all other unscheduled
                  collections received during the related Prepayment Period
                  (including, without limitation, Principal Prepayments,
                  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 the
                  Servicing Agreement.

                  PROCEEDING: Any suit in equity, action at law or other
judicial or administrative proceeding.

                  PROSPECTUS: The Prospectus Supplement, dated April 25, 2003,
together with the attached Prospectus, dated March 28, 2003.

                  PURCHASE PRICE: The meaning specified in Section 2.2(a) of the
Mortgage Loan Sale and Contribution Agreement.

                  PURCHASER: IMH Assets Corp., a California corporation, and its
successors and assigns.

                  QUALIFIED INSURER: A mortgage guaranty 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 a mortgage guaranty insurance 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 and as a Fannie Mae-approved mortgage insurer.

                  RADIAN: Radian Guaranty, Inc., or its successors or assigns.

                  RADIAN LENDER-PAID PMI POLICY: A lender-paid primary mortgage
insurance policy issued by Radian in accordance with a March 29, 2002 letter
between the Seller and Radian.

                                       24

<PAGE>

                  RADIAN PMI INSURED LOANS: The Mortgage Loans included in the
Trust Fund covered by a Radian Lender-Paid PMI Policy, as indicated on the
Mortgage Loan Schedule.

                  RADIAN PMI POLICY FEE: With respect to each Radian PMI Insured
Loan and any Payment Date, the product of (i) the Radian PMI Rate divided by 12
and (ii) the Stated Principal Balance of such Mortgage Loan as of the first day
of the related Due Period.

                  RADIAN PMI RATE: With respect to any Mortgage Loan covered by
the Radian Lender- Paid PMI Policy, the rate per annum at which the premium with
respect to such policy accrues as indicated in the Mortgage Loan Schedule.

                  RATING AGENCY: Standard & Poor's, Moody's or Fitch Ratings and
each of their successors. If such agencies and their successors are no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating agency, or other comparable Person, designated by the Depositor, notice
of which designation shall be given to the Indenture Trustee and Master
Servicer. References herein to the two highest long term debt rating of a Rating
Agency shall mean "AA" or better in the case of each of Standard & Poor's and
Fitch Ratings 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 "A-1+" in
the case of each of Standard & Poor's and Fitch Ratings and "P-1" in the case of
Moody'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 each Mortgage Loan (or 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 (or REO Property) as of the date of Cash Liquidation or REO
Disposition, plus (ii) interest (and REO Imputed Interest, if any) at the Net
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Bondholders up to the last day of the month in which the Cash Liquidation (or
REO Disposition) occurred on the Stated Principal Balance of such Mortgage Loan
(or REO Property) 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 Net Mortgage Rate and to principal of the
Mortgage Loan, net of the portion thereof reimbursable to the Master Servicer or
any Subservicer with respect to related Advances or expenses as to which the
Master Servicer or any Subservicer is entitled to reimbursement thereunder but
which have not been 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
object of a Debt Service Reduction, the amount of such Debt Service Reduction.
With respect to each High CLTV Loan (or related REO Property) which became 180
or more days delinquent, an amount equal to the Stated Principal Balance of such
High CLTV Loan (or related REO Property) as of such date.

                  RECORD DATE: With respect to any Book-Entry Bonds and any
Payment Date, the close of business on the Business Day immediately preceding
such Payment Date. With respect to any

                                       25

<PAGE>

Bonds that are not Book-Entry Bonds, the close of business on the last Business
Day of the calendar month preceding such Payment Date.

                  REFERENCE BANKS: Any leading banks selected by the Indenture
Trustee after consultation with the Master Servicer and engaged in transactions
in Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) whose quotations appear on the
Telerate Screen Page 3750 on the Interest Determination Date in question, (iii)
which have been designated as such by the Indenture Trustee after consultation
with the Master Servicer, and (iv) which are not Affiliates of the Depositor or
the Seller.

                  REGISTERED HOLDER: The Person in whose name a Bond is
registered in the Bond Register on the applicable Record Date.

                  RELATED DOCUMENTS: With respect to each Mortgage Loan, the
documents specified in Section 2.1(b) of the Mortgage Loan Sale and Contribution
Agreement and any documents required to be added to such documents pursuant to
the Mortgage Loan Sale and Contribution Agreement, the Trust Agreement,
Indenture or the Servicing Agreement.

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

                  RELIEF ACT SHORTFALL: As to any Payment Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property), any shortfalls
relating to the Relief Act or similar legislation or regulations.

                  REMITTANCE REPORT: The report prepared by the Master Servicer
pursuant to Section 4.01 of the Servicing Agreement.

                  REO ACQUISITION: The acquisition by the Master Servicer on
behalf of the Indenture Trustee for the benefit of the Bondholders of any REO
Property pursuant to Section 3.13 of the Servicing Agreement.

                  REO DISPOSITION: As to any REO Property, a determination by
the Master Servicer that it has received substantially all Insurance Proceeds,
Liquidation Proceeds, REO 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 Net 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 for
such period as such balance is reduced pursuant to Section 3.13 of the Servicing
Agreement by any income from the REO Property treated as a recovery of
principal.

                  REO PROCEEDS: Proceeds, net of expenses, received in respect
of any REO Property (including, without limitation, proceeds from the rental of
the related Mortgaged Property) which proceeds are required to be deposited into
the Collection Account only upon the related REO Disposition.

                                       26

<PAGE>

                  REO PROPERTY: A Mortgaged Property that is acquired by the
Issuer by foreclosure or by deed in lieu of foreclosure.

                  REPURCHASE EVENT: With respect to any Mortgage Loan, either
(i) a discovery that, as of the Closing Date, in the case of the Non-High CLTV
Loans, the related Mortgage was not a valid first lien on the related Mortgaged
Property, or in the case of the High CLTV Loans, the related Mortgage was not a
valid second lien on the related Mortgaged Property, subject to no other liens
except (A) the lien of real property taxes and assessments not yet due and
payable, (B) covenants, conditions, and restrictions, rights of way, easements
and other matters of public record as of the date of recording of such Mortgage
and such other permissible title exceptions as are permitted and (C) other
matters to which like properties are commonly subject which do not materially
adversely affect the value, use, enjoyment or marketability of the related
Mortgaged Property or (ii) with respect to any Mortgage Loan as to which the
Seller delivers an affidavit certifying that the original Mortgage Note has been
lost or destroyed, a subsequent default on such Mortgage Loan if the enforcement
thereof or of the related Mortgage is materially and adversely affected by the
absence of such original Mortgage Note.

                  REPURCHASE PRICE: With respect to any Mortgage Loan required
to be repurchased on any date pursuant to the Mortgage Loan Sale and
Contribution Agreement or purchased by the Master Servicer pursuant to the
Servicing Agreement, an amount equal to the sum, without duplication, of (i)
100% of the Stated Principal Balance thereof (without reduction for any amounts
charged off) and (ii) unpaid accrued interest at the Mortgage Rate on the
outstanding principal balance thereof from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month of
purchase plus (iii) the amount of unreimbursed Advances or unreimbursed
Servicing Advances made with respect to such Mortgage Loan plus (iv) any other
amounts owed to the Master Servicer or any Subservicer pursuant to Section 3.07
of the Servicing Agreement and not included in clause (iii) of this definition.

                  RESERVE INTEREST RATE: With respect to any Interest
Determination Date, the rate per annum that the Indenture Trustee determines to
be either (i) the arithmetic mean (rounded upwards if necessary to the nearest
whole multiple of 0.0625%) of the one-month United States dollar lending rates
which New York City banks selected by the Indenture Trustee are quoting on the
relevant Interest Determination Date to the principal London offices of leading
banks in the London interbank market or (ii) in the event that the Indenture
Trustee can determine no such arithmetic mean, the lowest one-month United
States dollar lending rate which New York City banks selected by the Indenture
Trustee are quoting on such Interest Determination Date to leading European
banks.

                  RESPONSIBLE OFFICER: With respect to the Indenture Trustee,
any officer of the Indenture Trustee with direct responsibility for the
administration of the Indenture 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.

                  SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

                                       27

<PAGE>

                  SECURITIES INTERMEDIARY: Deutsche Bank National Trust Company,
or its successors and assigns.

                  SECURITY: Any of the Certificates or Bonds.

                  SECURITYHOLDER or HOLDER: Any Bondholder or a
Certificateholder.

                  SECURITY INSTRUMENT: A written instrument creating a valid
first lien or second 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: Impac Mortgage Holdings, Inc., a Maryland corporation,
and its successors and assigns.

                  SERVICING ACCOUNT: The separate trust account created and
maintained by the Master Servicer or each Subservicer with respect to the
Mortgage Loans or REO Property, which shall be an Eligible Account, for
collection of taxes, assessments, insurance premiums and comparable items as
described in Section 3.08 of the Servicing Agreement.

                  SERVICING ADVANCES: All customary, reasonable and necessary
"out of pocket"costs and expenses incurred in connection with a default,
delinquency or other unanticipated event in the performance by the Master
Servicer or any Subservicer of its servicing obligations, including, without
duplication, 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 and any expenses incurred in relation to any
such proceedings that result from the Mortgage Loan being registered on the MERS
System, (iii) the management and liquidation of any REO Property and (iv)
compliance with the obligations under Sections 3.10, 3.11, 3.13 of the Servicing
Agreement.

                  SERVICING AGREEMENT: The Servicing Agreement dated as of April
30, 2003, among the Master Servicer, the Issuer and the Indenture Trustee.

                  SERVICING CERTIFICATE: A certificate completed and executed by
a Servicing Officer on behalf of the Master Servicer in accordance with Section
4.01 of the Servicing Agreement.

                  SERVICING DEFAULT: The meaning assigned in Section 6.01 of the
Servicing Agreement.

                  SERVICING FEE: The sum of the Master Servicing Fee and the
Subservicing Fee.

                  SERVICING FEE RATE: The sum of the Master Servicing Fee Rate
and the related Subservicing Fee Rate.

                  SERVICING OFFICER: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and specimen signature appear on a list of servicing officers
furnished to the Indenture Trustee by the Master Servicer, as such list may be
amended from time to time.

                                       28

<PAGE>

                  SIXTY DAY ROLLING DELINQUENCY PERCENTAGE: For any Payment
Date, the three month average of the aggregate Stated Principal Balance of the
Mortgage Loans that are 60 or more days delinquent, in bankruptcy, in
foreclosure or converted to REO Properties as of the close of business on the
last day of the preceding calendar month. For purposes of the foregoing
calculations, a mortgage loan is considered "60 days" delinquent if a payment
due on the first day of a month has not been received by the second day of the
second following month.

                  SPECIAL CERTIFICATE CAP CONTRACT: The Confirmation together
with the associated ISDA Master Agreement, delivered to the Indenture Trustee on
the Closing Date and attached to the Indenture as Exhibit F, for which amounts
payable shall be distributed in accordance with Section 3.05(f) of the
Indenture.

                  STANDARD & POOR'S: Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., or its successor in interest.

                  STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related REO Property as of any date of determination, (i) the principal balance
of the Mortgage Loan outstanding as of the Cut-off Date, after application of
all scheduled Monthly 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 Payment 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 REO Proceeds to the extent applied by the Master Servicer as
recoveries of principal in accordance with Section 3.13 of the Servicing
Agreement with respect to such Mortgage Loan or REO Property, which were
distributed pursuant to Section 3.05 of the Indenture on any previous Payment
Date, and (c) the principal portion of any Realized Loss with respect thereto
allocated pursuant to Section 3.30 of the Indenture for any previous Payment
Date; provided, that any High CLTV Loan that becomes 180 or more days delinquent
shall be treated as if it had a Stated Principal Balance of zero after the date
it becomes 180 or more days delinquent.

                  STATUTORY TRUST STATUTE: Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. Code ss.ss.3801 ET SEQ., as the same may be amended from
time to time.

                  STEP-UP DATE: The first Payment Date following the earlier of
(i) the first Payment Date for which the Issuer can cause the redemption of the
Bonds pursuant to Section 8.07 of the Indenture and (ii) the Payment Date in May
2013.

                  SUBSERVICER: Any Person with whom the Master Servicer has
entered into a Subservicing Agreement as a Subservicer, including the Initial
Subservicers.

                  SUBSERVICING ACCOUNT: An Eligible Account established or
maintained by a Subservicer as provided for in Section 3.06(e) of the Servicing
Agreement.

                  SUBSERVICING AGREEMENT: The written contract between the
Master Servicer and any Subservicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02 of the Servicing Agreement.

                                       29

<PAGE>

                  SUBSERVICING FEE: With respect to each Mortgage Loan and any
Payment Date, the fee payable monthly to the subservicer in respect of servicing
compensation that accrues at an annual rate equal to the Subservicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as of the
related Due Date in the related Due Period.

                  SUBSERVICING FEE RATE: With respect to each ARM Loan, each
Fixed Rate First Lien Loan and Fixed Rate Second Lien Loan, 0.375% per annum,
0.25% per annum and 0.75% per annum, respectively.

                  SUBSTITUTION ADJUSTMENT AMOUNT: With respect to any Eligible
Substitute Mortgage Loan, the amount as defined in Section 2.03 of the Servicing
Agreement.

                  TELERATE SCREEN PAGE 3750: 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).

                  TREASURY REGULATIONS: Regulations, including proposed or
temporary Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.

                  TRUST: The Impac CMB Trust Series 2003-5 to be created
pursuant to the Trust Agreement.

                  TRUST AGREEMENT: The Amended and Restated Trust Agreement
dated as of April 30, 2003, among the Owner Trustee, the Depositor and Deutsche
Bank National Trust Company, as Certificate Registrar and Certificate Paying
Agent, relating to the Trust.

                  TRUST ESTATE: The meaning specified in the Granting Clause of
the Indenture.

                  TRUST INDENTURE ACT OR TIA: The Trust Indenture Act of 1939,
as amended from time to time, as in effect on any relevant date.

                  UCC: The Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.

                  UNDERWRITERS: Countrywide Securities Corporation and Bear,
Stearns & Co. Inc.

                  UNINSURED CAUSE: Any cause of damage to property subject to a
Mortgage that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies.

                  UNPAID INTEREST SHORTFALL: For each class of Bonds and any
Payment Date, such Bonds' pro rata share, based on the amount of Accrued Bond
Interest otherwise payable on such Bond on such Payment Date, of (a) any
Prepayment Interest Shortfalls, to the extent not covered by Compensating
Interest, and (b) any Relief Act Shortfalls, plus interest on the amount of
previously

                                       30

<PAGE>

allocated Unpaid Interest Shortfall on such class of Bonds which remains
unreimbursed, at the Bond Interest Rate for such Class for the related Accrual
Period.

                  WENDOVER: Wendover Funding, Inc.

                                       31

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}]]