Document:

EMPLOYMENT AGREEMENT

     THIS  AGREEMENT  is entered  into as of January  15,  2001,  by and between
GARDENBURGER,  INC., an Oregon  corporation ("the Company") and SCOTT C. WALLACE
("Executive").

     In consideration of the mutual covenants and the other terms and conditions
set forth in this Agreement, the parties agree as follows:

1.   EMPLOYMENT; POSITION

     The Company  agrees to employ  Executive and  Executive  agrees to serve as
President and Chief Executive  Officer of the Company.  Executive also agrees to
serve, if elected, without separate compensation,  as an officer and/or director
of the Company or any subsidiary or affiliate of the Company.

2.   DUTIES

     As President and Chief  Executive  Officer of the Company,  Executive  will
have such powers and duties appropriate to that office (a) as may be provided by
the articles  and/or bylaws of the Company and (b) as determined by the Board of
Directors  of the  Company  from  time to  time.  Executive  will  at all  times
discharge  his  duties  in  consultation  with and  under  the  supervision  and
direction of the Board of Directors of the Company. Subject to the provisions of
this  Agreement,  Executive's  duties  may be  changed  from  time to time,  and
Executive's  place of work may be relocated at the sole  discretion of the Board
of Directors of the Company.

3.   OUTSIDE ACTIVITIES

     During his employment by the Company under this  Agreement,  Executive will
devote all of his business time,  attention,  skill, and efforts to the faithful
performance  of his  duties  under this  Agreement.  Executive  will  obtain the
consent of the Board of Directors of the Company  before he engages in any other
professional or business  activities that may require an appreciable  portion of
Executive's time or effort to the detriment of the Company's business.

4.   COMPENSATION AND FRINGE BENEFITS

     4.1 BASE SALARY.  As compensation  for services under this  Agreement,  the
Company  will pay to  Executive an annual  salary of $240,000  ("Base  Salary").
Executive's  Base Salary will be payable in  accordance  with the usual  payroll
practices of the Company.  During  Executive's  employment under this Agreement,
Executive's  Base  Salary  will be  reviewed  at least  annually by the Board of
Directors of the  Company,  and the Board of Directors of the Company may in its
sole discretion adjust Executive's Base Salary from time to time.

     4.2  PERFORMANCE  BONUS.  Executive  will be  eligible to receive an annual
performance  bonus  based  on  achieving  strategic  and  financial  goals to be
determined for each year by the compensation committee of the Company's Board of
Directors;  provided,  however, that for the 2001 calendar year, such goals will

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be determined jointly (and agreed upon in writing) by Executive and the Chair of
the  Company's  Board of  Directors.  The target  annual  performance  bonus for
Executive  will be 50  percent  of Base  Salary.  For the  2001  calendar  year,
Executive's annual performance bonus will be not less than $60,000.

     4.3 STOCK OPTION. The Company will, effective as of the first day Executive
begins  working for the Company (the  "Commencement  Date")  grant  Executive an
incentive  stock  option  under the  Company's  1992 First  Amended and Restated
Combination  Stock Option Plan (the "Initial Option") to purchase 150,000 shares
of the Company's  common stock at a purchase price equal to the per-share market
value of the  Company's  common stock on the  Commencement  Date.  The terms and
conditions of the Initial  Option are set forth in the form of option  agreement
attached  hereto as Exhibit A, which the parties will execute  contemporaneously
with their execution of this Agreement.

     4.4 OTHER BENEFIT PLANS. In addition to the  compensation  described above,
to the extent  otherwise  eligible,  Executive  will be  entitled  to receive or
participate in all such other benefits,  including  without  limitation  pension
plans,  stock option plans,  and health and welfare  plans,  as may from time to
time be made available to other senior management employees of the Company.

     4.5  VACATION.  Executive  will be  entitled  to  four  weeks  annual  paid
vacation.

     4.6  RELOCATION.  Executive will be reimbursed  for  reasonable  moving and
relocation  expenses  actually  incurred by Executive in connection  with moving
himself, his family, and his household goods from Dana Point, California, to the
Portland,  Oregon  metropolitan area, up to a maximum  reimbursement of $20,000.
Such  reimbursement  will be  subject  to  presentation  of  receipts  and other
verification reasonably requested by the Company.

     4.7 SALE BONUS

     (a) After the completion of a "Sale  Transaction,"  as defined  below,  the
Company  will  pay  Executive  a "Sale  Bonus,"  as  described  below,  provided
Executive remains as President and Chief Executive Officer of the Company during
the  negotiation  of and through the closing of the Sale  Transaction.  The Sale
Bonus  will be  payable  to  Executive  after all  post-closing  adjustments  in
connection with the Sale Transaction have been determined.

     (b) For purposes of this paragraph 4.7:

          (i) A "Sale  Transaction"  means a single  transaction  or a series of
     related  transactions  approved  by the Board of  Directors  of the Company
     resulting in:

          o    A  sale  or  other   disposition   by  the   Company  of  all  or
               substantially all its assets;

          o    A  sale,  stock  exchange,   or  other   disposition  of  all  or
               substantially all the capital stock of the Company;

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          o    A merger,  consolidation,  or other corporate  transaction with a
               third party in which the  Company's  shareholders  receive  cash,
               stock, securities, or any other consideration (or any combination
               of the foregoing) in exchange for their stock in the Company.

          (ii) The "Sale  Bonus" is an amount  equal to the sum of (i) 1 percent
     of the portion of the "Total  Consideration" (as defined below) equal to or
     less than $100  million,  plus (ii) 2 percent  of the  portion of the Total
     Consideration in excess of $100 million; and

          (iii) The "Total  Consideration" in connection with a Sale Transaction
     means:

          o    The amount of cash and the  aggregate  market  value of all other
               consideration  received by the Company in connection  with a sale
               or other disposition of its assets (exclusive of any indebtedness
               or  liabilities  of the  Company  to which the  assets  taken are
               subject or which are assumed by the  purchaser or other  acquirer
               of the Company's assets); or

          o    The aggregate  amount of cash and the  aggregate  market value of
               all other consideration received by the Company's shareholders in
               any sale, share exchange,  or other  disposition of the Company's
               stock or any merger, consolidation, or similar transaction.

     4.8  WITHHOLDING  AND PAYROLL TAXES.  All amounts payable by the Company to
Executive  pursuant to this  Agreement,  including  without  limitation all cash
compensation,  any Sale Bonus, and any settlement of stock options,  are subject
to and will be reduced by amounts the  Company is  required to withhold  for all
applicable federal, state, and local income and payroll taxes.

5.   EXPENSES

     The Company will  reimburse  Executive  for all  reasonable  and  necessary
expenses  incurred by Executive in carrying out his duties under this Agreement.
Executive  will present to the Company from time to time an itemized  account of
such expenses in such form as may be required by the Company.

6.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION

     6.1  SEVERANCE  PAYMENT.  Upon  involuntary  termination  by the Company of
Executive's   employment   (other  than  for  "Cause,"  or  in  connection  with
Executive's  death or  "Disability,"  as those  terms are  defined  below),  the
Company will pay Executive his Base Salary through the date of  termination  and
will pay Executive severance pay equal to one year's Base Salary (payable over a
12-month  period in accordance  with the Company's  normal  payroll  practices).
Executive  agrees,  as a condition to payment and receipt of such severance pay,
to execute a full and complete  release,  in form and substance  satisfactory to
the Company,  of any and all claims of every kind and nature whatsoever  against
the Company.

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     6.2  DEFINITIONS. For purposes of this Section 6:

     (a) "Cause" for termination of Executive's  employment  means (i) any fraud
or dishonesty by Executive  involving  the Company;  (ii) willful  misconduct or
gross negligence by Executive in connection with Executive's  performance of his
duties for the Company;  (iii)  Executive's  conviction  for having  committed a
felony;  (iv) the commission by Executive of any act in direct  competition with
or materially  detrimental to the best interests of the Company;  or (v) willful
and continued failure by Executive to substantially  perform his duties provided
herein  after a written  demand for  substantial  performance  is  delivered  to
Executive by the Chair of the Board of  Directors  of the Company,  which demand
identifies  with  reasonable  specificity  the manner in which Executive has not
substantially performed his duties.

     (b) "Disability"  has the meaning in the Company's then current  disability
plan or program  or, if no such plan or  program  is then in effect,  Disability
means the condition of being permanently  unable to perform  Executive's  duties
for the  Company  by  reason  of a  medically  determinable  physical  or mental
impairment  that can be expected to result in death or that has lasted or can be
reasonably expected to last for a continuous period of at least 12 months.

     6.3 NATURE OF EMPLOYMENT  STATUS.  Notwithstanding  the  provisions of this
Agreement,  including this Section 6, Executive will be an "at will" employee of
the Company.  The provisions of this Section 6 specify  Executive's  contractual
rights in the event of termination,  but are not intended to limit the Company's
right  and power to  terminate  Executive's  employment  at any time and for any
reason (or for no reason).

7.   MATERIALS PREPARED AND INVENTIONS MADE DURING EMPLOYMENT

     The Company shall be the exclusive  owner of all materials,  concepts,  and
inventions Executive prepares, develops, or makes (whether alone or jointly with
others) within the scope of his employment, and of all related rights (including
copyrights,   trademarks,   and  patents)  and  proceeds.   Without  limitation,
materials, concepts, and inventions that (a) relate to the Company's business or
actual or demonstrably  anticipated research or development,  or (b) result from
any work performed by Executive for the Company,  shall be considered within the
scope of Executive's  employment.  Executive  shall  promptly  disclose all such
materials,  concepts,  and inventions to the Company.  Executive  shall take all
action reasonably  requested by the Company to vest ownership of such materials,
consents,  and  inventions  in the  Company  and to permit the Company to obtain
copyright, trademark, patent, or similar protection in its name.

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8.   CONFIDENTIAL INFORMATION

     8.1  DEFINED.  "Confidential  Information"  is  all  nonpublic  information
relating to the Company or its business  that is disclosed  to  Executive,  that
Executive  produces,  or that Executive  otherwise  obtains  during  employment.
"Confidential Information" also includes information received from third parties
that the Company has agreed to treat as  confidential.  Examples of Confidential
Information are:

     (a) Marketing plans.

     (b) Customer lists.

     (c) Product design and manufacturing information.

     (d) Financial information.

     "Confidential  Information"  does not include  information  which (a) is or
becomes generally available to the public other than as a result of a disclosure
by Executive; (b) becomes available to Executive on a nonconfidential basis from
a source  other than the  Company  or its  representatives,  provided  that such
source is not known by Executive to be bound by a confidentiality agreement with
the Company or its representatives or otherwise prohibited from transmitting the
information to Executive by a contractual,  legal, or fiduciary obligation;  (c)
can be demonstrated  by written  evidence or other  convincing  evidence to have
been known by Executive on a  nonconfidential  basis prior to its  disclosure to
Executive  by  the  Company  or  one  of  its  representatives;  or  (d)  can be
demonstrated by written or other  convincing  evidence to have been developed by
Executive in good faith and independent of Confidential Information.

     8.2 ACCESS TO INFORMATION. Executive acknowledges that in the course of his
employment  he  will  have  access  to  Confidential   Information,   that  such
information  is a valuable  asset of the  Company,  and that its  disclosure  or
unauthorized use will cause the Company substantial harm.

     8.3 OWNERSHIp.  Executive  acknowledges  that all Confidential  Information
shall  continue to be the exclusive  property of the Company (or the third party
that  disclosed it to the Company),  whether or not prepared in whole or in part
by  Executive  and whether or not  disclosed  to  Executive  or entrusted to his
custody in connection with his employment by the Company.

     8.4 NONDISCLOSURE AND NONUSE. Unless authorized or instructed in writing by
the Company, or required by legally constituted  authority,  Executive will not,
except as required in the course of the Company's business,  during or after his
employment,  disclose to others or use any Confidential Information,  unless and
until,  and then only to the extent  that,  such items  become  available to the
public through no fault of Executive.

     8.5 RETURN OF CONFIDENTIAL INFORMATION.  Upon request by the Company during
or after his  employment,  and without  request upon  termination  of employment
pursuant to this  Agreement,  Executive will deliver  immediately to the Company
all written or tangible materials  containing  Confidential  Information without
retaining any excerpts or copies.

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     8.6  DURATION.  The  obligations  set forth in this Section 8 will continue
beyond the term of  employment  of  Executive  by the Company and for so long as
Executive possesses Confidential Information.

9.   NONCOMPETITION

     9.1  COVENANTS.  Executive  covenants,  in  consideration  of  his  initial
employment by the Company,  that the Executive  will not,  throughout the United
States or in any  other  country  in which the  Company  sells its  products  or
services,  either  individually or as a director,  officer,  partner,  employee,
agent,  representative,  or consultant with any business, directly or indirectly
during the term of employment and for two years thereafter:

     (a) Engage or  prepare to engage in any  business  that sells  products  or
services  competing with those sold by the Company as of the date of Executive's
termination of employment with the Company;

     (b)  Induce or attempt  to induce  any  person  who is an  employee  of the
Company to leave the employ of the Company; or

     (c) Solicit,  divert,  or accept  orders for products or services  that are
substantially competitive with the products or services sold by the Company from
any customer of the Company, or suggest,  request, or encourage any suppliers or
customers of the Company to curtail,  reduce, or cancel their business done with
the Company,  or otherwise solicit for himself or any other person or entity any
business of the Company.

     9.2  SEVERABILITY.  While  Executive  acknowledges  that  the  restrictions
contained  herein are reasonable,  if any term or condition of this Section 9 is
determined to be unenforceable because of its scope, duration, geographical area
or similar factor,  the court or arbitrator making such  determination will have
the power to reduce or limit such scope,  duration,  area, or other factor,  and
such covenant will then be enforceable in its reduced or limited form.

10.  GENERAL TERMS AND CONDITIONS

     10.1  EFFECT  ON PRIOR  AGREEMENTS.  This  Agreement  contains  the  entire
understanding  between  the  parties  concerning  the  subject  matter  of  this
Agreement  and  supersedes  any prior  agreements  (express or implied,  oral or
written) concerning the subject matter of this Agreement.

     10.2  SUCCESSORS  AND ASSIGNS.  This Agreement will inure to the benefit of
any successors or assigns of the Company.

     10.3 MODIFICATION AND WAIVER.

     (a) This Agreement may be modified or amended only by a written  instrument
signed by both parties.

     (b) No term or  condition  of this  Agreement  will be  deemed to have been
waived,  nor will there be any estoppel against the enforcement of any provision
of this Agreement,  except by a written  instrument  signed by the party charged

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with such waiver or estoppel. No such written waiver will be deemed a continuing
waiver unless  specifically  stated  therein,  and each such waiver will operate
only as to the  specific  term or  condition  waived and will not  constitute  a
waiver of such term or  condition  for the  future as to any act other than that
specifically waived.

     10.4 SEVERABILITY.  If, for any reason, any provision of this Agreement, or
any part of any provision,  is held invalid, such invalidity will not affect any
other  provision  of this  Agreement or any part of such  provision  not held so
invalid,  and each such other provision and part thereof will to the full extent
consistent with law continue in full force and effect.

     10.5  HEADINGS FOR  REFERENCE  ONLY.  The  headings of sections  herein are
included solely for convenience of reference and will not control the meaning or
interpretation of any of the provisions of this Agreement.

     10.6  GOVERNING  LAW.  This  Agreement  will be governed by the laws of the
state of Oregon.

     10.7  ARBITRATION

     (a) All claims,  disputes,  or controversies,  except for those excluded by
Section  10.7(b),  whether or not arising out of Executive's  employment (or its
termination),  that the Company may have against the Executive or that Executive
may have against the Company or against its  officers,  directors,  employees or
agents,  in their capacity as such or otherwise,  shall be resolved by mandatory
arbitration  in  accordance  with  the  then  effective   arbitration  rules  of
Arbitration  Service of Portland,  Inc.,  or American  Arbitration  Association,
whichever organization is selected by the party that first initiates arbitration
by  filing  a claim in  accordance  with the  filing  rules of the  organization
selected,  and any judgment upon the award rendered pursuant to such arbitration
may be  entered  in any court  having  jurisdiction  thereof.  Unless  otherwise
agreed,  arbitration  shall be conducted in  Portland,  Oregon,  before a single
arbitrator.

     (b) Claims arising out of Sections 8 and 9 of this Agreement or relating to
workers'  compensation or unemployment  compensation  benefits are excluded from
mandatory  arbitration  under Section 10.7(a).  Such excluded claims may include
but are not  limited  to claims  by the  Company  for  injunctive  and/or  other
equitable  relief for  unfair  competition  and/or  the use and/or  unauthorized
disclosure of trade secrets or Confidential  Information,  as to which Executive
understands  and agrees that the Company may seek and obtain relief from a court
of competent jurisdiction.

     10.8  ATTORNEY  FEES.  In the event of any suit or  action  or  arbitration
proceeding to enforce or interpret any provision of this  Agreement (or which is
based on this Agreement),  the prevailing party will be entitled to recover,  in
addition to other costs, the reasonable attorney fees incurred by the prevailing
party in connection with such suit,  action,  or arbitration,  and in any appeal
therefrom.  The  determination  of who is the prevailing party and the amount of
reasonable  attorney fees to be paid to the prevailing  party will be decided by
the arbitrator or  arbitrators  (with respect to attorney fees incurred prior to
and during the arbitration  proceedings)  and by the court or courts,  including
any appellate courts, in which the matter is tried, heard, or decided, including

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the court which hears any exceptions  made to an arbitration  award submitted to
it for  confirmation  as a judgment  (with  respect to attorney fees incurred in
such confirmation proceedings).

     10.9  INITIAL  EMPLOYMENT.  Executive  acknowledges  that  he  signed  this
agreement upon his initial employment with the Company.

     The parties have executed this  Employment  Agreement as of the date stated
above.

                                             GARDENBURGER, INC.

By: /s/ Scott C. Wallace                     By: /s/ Ronald C. Kesselman
    --------------------------------             -------------------------------
    Scott C. Wallace                             Ronald C. Kesselman
                                                 Chair of the Board of Directors

                                      -8-

<PAGE>

                                                         Option No.      _______
                                                         No. of Shares   150,000

                               GARDENBURGER, INC.
                           INCENTIVE STOCK OPTION AND

                        INCENTIVE STOCK OPTION AGREEMENT

     This  Incentive  Stock  Option is granted and this  Incentive  Stock Option
Agreement (the  "Agreement") is executed by and between  Gardenburger,  Inc., an
Oregon  corporation  (the  "Company"),   and  Scott  Wallace  (the  "Optionee"),
effective January 15, 2001.

                                    RECITALS

     A. The Company has duly adopted that certain Gardenburger, Inc., 1992 First
Amended and Restated  Combination Stock Option Plan, a copy of which is attached
hereto as Exhibit A (the "Plan").

     B. The Plan  authorizes a committee  appointed by the Board of Directors of
the Company (the "Administrative Committee") to grant incentive stock options to
officers and employees of the Company.

     C. The  Administrative  Committee  has  selected the Optionee to receive an
incentive stock option under the Plan.

NOW, THEREFORE, THE COMPANY AND THE OPTIONEE COVENANT AND AGREE AS FOLLOWS:

     1. NUMBER OF SHARES SUBJECT TO OPTION AND OPTION PRICE.  The Company hereby
grants to the Optionee an incentive stock option (the "Option") to purchase from
the Company  150,000 shares of the no par value common stock of the Company (the
"Common  Stock")  at an  exercise  price of  $______  per  share.  The Option is
exercisable upon the terms and conditions contained herein.

     2. ADDITIONAL TERMS OF THE OPTION. Subject to the provisions of Paragraph 3
below, the Option shall have the following

terms:

          2.1 The  effective  date of the grant of the Option  shall be the date
first set forth above.

                                                                       EXHIBIT A
                                                                          Page 1
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Incentive Stock Option Agreement

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          2.2 The Option shall vest as follows:

                                                    Cumulative
                     Date                           Percentage Vested
                     ----                           -----------------

               January 15, 2002                          25%

               January 15, 2003                          50%

               January 15, 2004                          75%

               January 15, 2005                         100%

          2.3 The foregoing vesting schedule notwithstanding,  this Option shall
immediately vest as to any Option shares that have not then become vested upon:

          (i)  the  termination of the employment of the Optionee by the Company
               as a result of the Optionee's  death or "Disability"  (as defined
               in Optionee's Employment Agreement dated as of January 15, 2001);
               or

          (ii) following  a "Change  in  Control"  of the  Company  (as  defined
               below),  (x) the termination of the employment of the Optionee by
               the Company  other than for  "Cause"  (as  defined in  Optionee's
               Employment  Agreement  dated as of January  15,  2001),  death or
               Disability  or (y) the  occurrence  of a material  diminution  in
               Optionee's position or  responsibilities  with or compensation by
               the Company.  For purposes  hereof,  a "Change in Control" of the
               Company shall be deemed to have occurred upon the earlier of:

               (a)  the date  that any  "person"  (as that  term is  defined  in
                    Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act
                    of 1934,  as amended (the  "Act")),  other than a trustee or
                    other fiduciary holding securities under an employee benefit
                    plan of the Company,  becomes a beneficial owner (within the
                    meaning of Rule 13d-3 promulgated  under the Act),  directly
                    or indirectly, of securities of the Company representing 25%
                    or more of the combined  voting power of the Company's  then
                    outstanding securities; or

                                                                       EXHIBIT A
                                                                          Page 2
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Incentive Stock Option Agreement

<PAGE>

               (b)  the date of any annual or special meeting of stockholders at
                    which a  majority  of the  directors  then  elected  are not
                    individuals nominated by the Company's then incumbent Board;
                    or

               (c)  the date of approval by the stockholders of the Company of a
                    plan of merger or consolidation of the Company in which such
                    stockholders  will  not hold at  least  75% of the  combined
                    voting power of the resulting entity  immediately  following
                    such  merger  or  consolidation,  or  the  approval  by  the
                    stockholders   of  the   Company  of  a  plan  of   complete
                    liquidation  of the Company or an agreement  for the sale of
                    substantially all of the Company's assets.

     2.4 The Option shall expire on January 15, 2011 (the "Expiration Date").

     2.5 To the extent  vested,  the Option may be exercised in whole or in part
at any time and from time to time prior to the Expiration Date.

     2.6 The  Option  must be  exercised,  if at all,  as to a whole  number  of
shares.

     3.  INCORPORATION BY REFERENCE OF THE TERMS AND CONDITIONS OF THE PLAN. The
terms and  conditions  of this  Option  shall be subject to all of the terms and
conditions of the Plan, which terms and conditions are expressly incorporated by
reference  into this Agreement to the same extent and with the same effect as if
such terms and conditions  were set forth herein.  In the event of a conflict or
inconsistency  between the terms and  conditions set forth in this Agreement and
the terms and conditions of the Plan, those of the Plan shall control.

     4. EXERCISE OF THE OPTION; DELIVERY OF CERTIFICATEs.

          4.1 The Option may be exercised only in accordance  with the terms and
conditions  of  Section 9 of the Plan and by (1)  delivery  to the  Company of a
Notice  of  Exercise  substantially  in the form of  Exhibit B  attached  hereto
specifying  the number of shares of Common Stock for which the exercise is to be
effective, and (2) tendering full payment of the Option Price for such shares.

          4.2  Within a  reasonable  time after its  receipt  of the  Optionee's
Notice of Exercise,  the Company shall deliver to the Optionee a certificate for
the shares of Common Stock for which exercise of the Option was effective.

                                                                       EXHIBIT A
                                                                          Page 3
--------------------------------
Incentive Stock Option Agreement

<PAGE>

     5.  TRANSFERABILITY  OF THE  OPTION.  The  Option is  transferable  only in
accordance with Section 10 of the Plan.

     6.  WARRANTIES  AND  REPRESENTATIONS  OF THE  OPTIONEE.  By executing  this
Agreement,  the Optionee accepts the Option and agrees to be bound by all of the
terms of this  Agreement  and the Plan. In addition,  the Optionee  acknowledges
that exercise of the Option and the sale of the shares of Common Stock  acquired
upon exercise  thereof may have tax  implications  for which the Optionee should
seek individual advice by his or her own tax counselor or advisor.

     7.  INDEMNIFICATION  BY THE OPTIONEE.  The Optionee agrees to indemnify and
hold the Company harmless from any loss or damage,  including attorney's fees or
other  legal  expenses,  incurred  in the  defense  or payment of any such claim
against  the  Company   resulting   from  a  breach  by  the   Optionee  of  the
representations, warranties or provisions contained in this Agreement.

     8. NO RIGHT TO CONTINUED RELATIONSHIP. Nothing herein shall confer upon the
Optionee the right to continue as an officer or employee of or with the Company,
nor affect any right which the Company may have to  terminate  its  relationship
with the Optionee.

     9.  RIGHTS  AS  SHAREHOLDERS.  The  Optionee  shall  have  no  rights  as a
shareholder  of the Company on account of the Option nor on account of shares of
Common Stock subject hereto until such time as the Company shall have issued and
delivered stock certificates to the Optionee.

     10. FURTHER ASSURANCES.  From time to time and upon request by the Company,
the  Optionee  agrees to execute  such  additional  documents as the Company may
reasonably  require  in  order  to  effect  the  purposes  of the  Plan and this
Agreement.

     11. BINDING  EFFECT.  This Agreement shall be binding upon the Optionee and
the Optionee's heirs, successors and assigns,  including the Qualified Successor
of the Optionee (as that term is defined in Section 10.2 of the Plan).

     12. WAIVERS/MODIFICATIONS. No waivers, alterations or modifications of this
Agreement  shall be valid  unless  in  writing  and duly  executed  by the party
against whom  enforcement of such waiver,  alteration or modification is sought.
The  failure of any party to enforce  any of its rights  against the other party
for breach of any of the terms of this Agreement shall not be construed a waiver
of such rights as to any continued or subsequent breach.

     13.  GOVERNING  LAW.  This  Agreement  shall be governed by the laws of the
State of Oregon.

                                                                       EXHIBIT A
                                                                          Page 4
--------------------------------
Incentive Stock Option Agreement

<PAGE>

     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
and year first above written.

GARDENBURGER, INC.:                         OPTIONEE:

By: /s/Alexander P. Coleman                 /s/ Scott C. Wallace
    --------------------------------        ------------------------------------
    Alexander P. Coleman                        Scott C. Wallace
    Administrative Committee Member

                                                                       EXHIBIT A
                                                                          Page 5
--------------------------------
Incentive Stock Option Agreement

<PAGE>

                                    Exhibit B

                     NOTICE OF EXERCISE OF INCENTIVE OPTION

                          Under the Gardenburger, Inc.,
          1992 First Amended and Restated Combination Stock Option Plan

I,  _________________,  hereby exercise the option to purchase ________shares of
no par value common stock (the "Shares"), of Gardenburger, Inc. (the "Company"),
granted to me pursuant to the terms and  conditions of the  Gardenburger,  Inc.,
1992 First Amended and Restated  Combination  Stock Option Plan (the "Plan") and
the  Incentive  Stock  Option  and  Incentive   Stock  Option   Agreement  dated
__________, 2001, bearing Option No. ___ (the "Option").

Accompanying this Notice is: [select one]

o    cash, certified or cashier's check in the amount of $________,

o    _____ shares of the Company's  Common Stock valued at $_______  (their fair
     market value as of this date), or

o    I  hereby  request  that  this  Option  be  exercised  through  a  cashless
     transaction  and have provided the name and address of my broker  below.  I
     understand that if I elect a cashless transaction, the Company will request
     and authorize its stock transfer agent to issue the  certificate(s)  in the
     name of my broker to facilitate the completion of the transaction.

         _______________________                              Date:  _________
         (Optionee's Signature)

         Optionee's Name:_____________________________
         Optionee's Address:__________________________
                            __________________________

                                         Broker's Name:_________________________
                                         Broker's Address:______________________
                                                          ______________________

                                                                       EXHIBIT A
                                                                          Page 6
--------------------------------
Incentive Stock Option Agreement - Exhibit B

<PAGE>

                          RECEIPT FOR STOCK CERTIFICATE

         I hereby  acknowledge  receipt  of Stock  Certificate  No.___  from the
Company on _________, 2001_,  representing  ___ shares of the  Company's  common
stock acquired upon exercise of the Option bearing Option No. ___.

                  _______________________                     Date:  ___________
                  Optionee Signature

                                                                       EXHIBIT A
                                                                          Page 7
--------------------------------
Incentive Stock Option Agreement - Exhibit BEXHIBIT

<PAGE>

                   STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,

                                     Seller,

                            GMAC MORTGAGE CORPORATION

                                 Master Servicer

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION

                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT

                           Dated as of January 1, 2001

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

                   Structured Asset Mortgage Investments Inc.
                       Mortgage Pass-Through Certificates

                                  Series 2001-3

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                     ARTICLE I

                                                    Definitions

                                                    ARTICLE II

                                           Conveyance of Mortgage Loans;
                                         Original Issuance of Certificates
<S>                                                                                                              <C>
         Section 2.01.     CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE...............................................29
         Section 2.02.     ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE...............................................30
         Section 2.03.     ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE AGREEMENT AND OTHER
AGREEMENTS.......................................................................................................31
         Section 2.04.     SUBSTITUTION OF MORTGAGE LOANS........................................................32
         Section 2.05.     ISSUANCE OF CERTIFICATES; CONVEYANCE OF REMIC 1 REGULAR INTERESTS.....................33
         Section 2.06.     REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.........................................33
         Section 2.07.     REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER..................................34

         Section 2.08.     REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER.................................35

                                                    ARTICLE III

                                  Administration and Servicing of Mortgage Loans

         Section 3.01.     MASTER SERVICER TO SERVICE MORTGAGE LOANS.............................................38
         Section 3.02      SUB-SERVICING; ENFORCEMENT OF THE OBLIGATIONS OF SUB-SERVICERS........................39
         Section 3.03.     MASTER SERVICER FIDELITY BOND AND MASTER SERVICER ERRORS AND OMISSIONS
INSURANCE POLICY.................................................................................................40
         Section 3.04      MASTER SERVICER'S FINANCIAL STATEMENTS AND RELATED INFORMATION........................40
         Section 3.05      POWER TO ACT; PROCEDURES..............................................................40
         Section 3.06      TERMINATION OF SUB-SERVICING AGREEMENTS; SUCCESSOR SUB-SERVICERS......................41
         Section 3.07      "DUE ON SALE" CLAUSES; ASSUMPTION AGREEMENTS..........................................41
         Section 3.08      RELEASE OF MORTGAGE FILES.............................................................42
         Section 3.09      DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER TO BE HELD
FOR TRUSTEE......................................................................................................44
         Section 3.10      [RESERVED]............................................................................44
         Section 3.11      STANDARD HAZARD AND FLOOD INSURANCE POLICIES..........................................44
         Section 3.12      PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS......................................46
         Section 3.13      MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES................................46
         Section 3.14      TRUSTEE TO RETAIN POSSESSION OF DOCUMENTS.............................................47
         Section 3.15      REALIZATION UPON DEFAULTED MORTGAGE LOANS.............................................47
         Section 3.16      COMPENSATION TO THE MASTER SERVICER...................................................49
         Section 3.17      [RESERVED]............................................................................50
         Section 3.18      ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.........................................50
         Section 3.19      ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING REPORT......................................50

                                       -i-

<PAGE>

                                                    ARTICLE IV

                                                     Accounts

         Section 4.01.     PROTECTED ACCOUNTS....................................................................52
         Section 4.02.     CERTIFICATE ACCOUNT...................................................................53
         Section 4.03.     PERMITTED WITHDRAWALS AND TRANSFERS FROM THE CERTIFICATE ACCOUNT......................54

                                                     ARTICLE V

                                                   Certificates

         Section 5.01.     CERTIFICATES..........................................................................57
         Section 5.02.     REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.................................60
         Section 5.03.     MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.....................................64
         Section 5.04.     PERSONS DEEMED OWNERS.................................................................64
         Section 5.05.     TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES........................................65
         Section 5.06.     RESTRICTIONS ON TRANSFERABILITY OF PRIVATE CERTIFICATES...............................66
         Section 5.07.     ERISA RESTRICTIONS....................................................................66
         Section 5.08.     RULE 144A INFORMATION.................................................................67

                                                    ARTICLE VI

                                          Payments to Certificateholders

         Section 6.01.     DISTRIBUTIONS ON THE CERTIFICATES.....................................................68
         Section 6.02.     ALLOCATION OF LOSSES..................................................................70
         Section 6.03.     PAYMENTS..............................................................................70
         Section 6.04.     STATEMENTS TO CERTIFICATEHOLDERS......................................................71
         Section 6.05.     MONTHLY ADVANCES......................................................................73
         Section 6.06.     COMPENSATING INTEREST PAYMENTS........................................................73
         Section 6.07.     REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED PROPERTY.........................73
         Section 6.08.     DISTRIBUTION OF REPORTS TO THE TRUSTEE................................................73

                                                    ARTICLE VII

                                                The Master Servicer
         Section 7.01.     LIABILITIES OF THE MASTER SERVICER....................................................76
         Section 7.02.     MERGER OR CONSOLIDATION OF THE MASTER SERVICER........................................76
         Section 7.03.     INDEMNIFICATION OF THE TRUSTEE........................................................76
         Section 7.04.     LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS.............................76
         Section 7.05.     MASTER SERVICER NOT TO RESIGN.........................................................77
         Section 7.06.     SUCCESSOR MASTER SERVICER.............................................................78

                                                       -ii-

<PAGE>

         Section 7.07.     SALE AND ASSIGNMENT OF MASTER SERVICING...............................................78

                                                   ARTICLE VIII

                                                      Default

         Section 8.01.     EVENTS OF DEFAULT.....................................................................79
         Section 8.02.     TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR..............................................80
         Section 8.03.     NOTIFICATION TO CERTIFICATEHOLDERS....................................................81
         Section 8.04.     WAIVER OF DEFAULTS....................................................................81
         Section 8.05.     LIST OF CERTIFICATEHOLDERS............................................................82

                                                    ARTICLE IX

                                              Concerning the Trustee

         Section 9.01.     DUTIES OF TRUSTEE.....................................................................83
         Section 9.02.     CERTAIN MATTERS AFFECTING THE TRUSTEE.................................................84
         Section 9.03.     TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.................................86
         Section 9.04.     TRUSTEE MAY OWN CERTIFICATES..........................................................87
         Section 9.05.     TRUSTEE'S FEES AND EXPENSES...........................................................87
         Section 9.06.     ELIGIBILITY REQUIREMENTS FOR TRUSTEE..................................................87
         Section 9.07.     INSURANCE.............................................................................88
         Section 9.08.     RESIGNATION AND REMOVAL OF THE TRUSTEE................................................88
         Section 9.09.     SUCCESSOR TRUSTEE.....................................................................88
         Section 9.10.     MERGER OR CONSOLIDATION OF TRUSTEE....................................................89
         Section 9.11.     APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.........................................89
         Section 9.12.     MASTER SERVICER SHALL PROVIDE INFORMATION AS REASONABLY REQUIRED......................90
         Section 9.13.     FEDERAL INFORMATION RETURNS AND REPORTS TO CERTIFICATEHOLDERS.........................90
         Section 9.14.     REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.................................91

                                                     ARTICLE X

                                                    Termination

         Section 10.01.    TERMINATION UPON REPURCHASE BY THE SELLER OR ITS DESIGNEE OR LIQUIDATION
OF THE MORTGAGE LOANS............................................................................................93
         Section 10.02.    ADDITIONAL TERMINATION REQUIREMENTS...................................................95

                                                    ARTICLE XI

                                             Miscellaneous Provisions
         Section 11.01.    INTENT OF PARTIES.....................................................................96
         Section 11.02.    AMENDMENT.............................................................................96

                                      -iii-

<PAGE>

         Section 11.03.    RECORDATION OF AGREEMENT..............................................................97
         Section 11.04.    LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS............................................97
         Section 11.05.    ACTS OF CERTIFICATEHOLDERS............................................................98
         Section 11.06.    GOVERNING LAW.........................................................................98
         Section 11.07.    NOTICES...............................................................................98
         Section 11.08.    SEVERABILITY OF PROVISIONS............................................................98
         Section 11.09.    SUCCESSORS AND ASSIGNS................................................................99
         Section 11.10.    ARTICLE AND SECTION HEADINGS..........................................................99
         Section 11.11.    COUNTERPARTS..........................................................................99
         Section 11.12.    NOTICE TO RATING AGENCIES.............................................................99
</TABLE>

<TABLE>
<CAPTION>
                                    EXHIBITS
<S>                        <C>
Exhibit A-1       -        Form of Class A Certificates
Exhibit A-2       -        Form of Class M Certificates
Exhibit A-3       -        Form of Class B Certificates
Exhibit A-4       -        Form of Class C Certificates
Exhibit A-5       -        Form of Class R Certificates
Exhibit B         -        Mortgage Loan Schedule
Exhibit C         -        Representations and Warranties of EMC Concerning
                              the Mortgage Loans
Exhibit D         -        Request for Release of Documents
Exhibit E         -        Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1       -        Form of Investment Letter
Exhibit F-2       -        Form of Rule 144A and Related Matters Certificate
Exhibit G         -        Form of Initial Certification
Exhibit H         -        Form of Final Certification
Exhibit I         -        List of Mortgage Loans for which Mortgage Notes are Lost
Exhibit J         -        Mortgage Loan Purchase Agreement
Exhibit K-1       -        Underlying Purchase Agreement dated December 18, 2000
Exhibit K-2       -        Underlying Purchase Agreement dated January 2, 2001
Exhibit K-3       -        Underlying Purchase Agreement dated January 18, 2001
Exhibit L-1       -        Underlying Assignment Agreement dated December 20, 2000
Exhibit L-2       -        Underlying Assignment Agreement dated January 5, 2001
Exhibit L-3       -        Underlying Assignment Agreement dated January 22, 2001
Exhibit M         -        Assignment Agreement
Exhibit N         -        Form of Interim Certification
Exhibit O         -        Form of ERISA Letter
Exhibit P         -        Interim Servicing Agreement between the Master Servicer and GreenPoint
</TABLE>

                                      -iv-

<PAGE>

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

     Pooling and Servicing Agreement dated as of January 1, 2001, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as the
seller (the "Seller"), GMAC Mortgage Corporation, as the master servicer (in
such capacity, the "Master Servicer") and Wells Fargo Bank Minnesota, National
Association, not in its individual capacity but solely as trustee (the
"Trustee").

                              PRELIMINARY STATEMENT

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

                                     REMIC 1

     As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC 1." The Class R-1 Interest will represent
the sole class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the Uncertificated REMIC 1 Pass-Through
Rate, the initial Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC 1 Regular Interests. None of the REMIC 1
Regular Interests will be certificated.

              Uncertificated REMIC 1  Initial Uncertificated     Assumed Final
Designation      Pass-Through Rate       Principal Balance     Maturity Date (1)
-----------   ----------------------  -----------------------  -----------------
   LT1A            Variable(2)            $ 167,665,833.30     February 25, 2031
   LT1B            Variable(2)               $  942,750.00     February 25, 2031
   LT1C            Variable(2)               $  669,740.00     February 25, 2031
   LT1D            Variable(2)                $  34,220.00     February 25, 2031
   LT1E            Variable(2)                $  29,940.00     February 25, 2031
   LT1F            Variable(2)                $  34,220.00     February 25, 2031
   LT1G            Variable(2)             $  1,710,881.70     February 25, 2031
-------------------
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date in the month following the maturity date
     for the Mortgage Loan with the latest maturity date has been designated as
     the "latest possible maturity date" for each REMIC 2 Regular Interest.

(2)  Calculated in accordance with the definition of "Uncertificated REMIC 2
     Pass-Through Rate" herein.

                                     REMIC 2

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such

                                       -1-

<PAGE>

segregated pool of assets will be designated as "REMIC 2." The Class R-2
Interest will represent the sole class of "residual interests" in REMIC 2 for
purposes of the REMIC Provisions.

         The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Current Principal Amount for each Class of
Certificates that represents one or more of the "regular interests" in REMIC 2
created hereunder:

                             Initial
                      Certificate Principal   Pass-Through       Assumed Final
Class Designation            Balance              Rate          Maturity Date(1)
Class A-1               $94,275,000.00        Variable(2)%     February 25, 2031
Class A-2               $66,974,000.00         Variable(2)     February 25, 2031
Class M-1               $ 3,422,000.00         Variable(2)     February 25, 2031
Class M-2               $ 2,994,000.00         Variable(2)     February 25, 2031
Class B                 $ 3,422,000.00         Variable(2)     February 25, 2031
Class C                   $      (3)           Variable(2)     February 25, 2031
-------------------

(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date in the month following the maturity date
     for the Mortgage Loan with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates that
     represents one or more of the "regular interests" in REMIC 2.

(2)  Calculated in accordance with the definition of "Pass-Through Rate" herein.

(3)  The Class C Certificates will accrue interest at their variable
     Pass-Through Rate on the Notional Amount of the Class C Certificates
     outstanding from time to time which shall equal the aggregate of the
     Uncertificated Principal Balances of the REMIC 1 Regular Interests. The
     Class C Certificates will not accrue interest on their Current Principal
     Amount.

     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 $171,087,585. 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 and the Trustee agree as follows:

                                       -2-

<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.

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

     ACCRUED CERTIFICATE INTEREST: For any Certificate for any Distribution
Date, the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount of such Certificate
immediately prior to such Distribution Date. In each case, Accrued Certificate
Interest on any Class of Certificates will be reduced by (i) in the case of a
Senior Certificate, such Certificate's share of any Net Interest Shortfall and
(ii) in the case of a Subordinate Certificate, such Certificate's share of any
Net Interest Shortfall. Net Interest Shortfalls will be allocated to each Class
of Certificates (other than the Class R Certificates) on a pro rata basis, based
on the amount of Accrued Certificate Interest for such Class of Certificates.
Accrued Certificate Interest for each Class of Certificates shall be calculated
on the basis of a 360-day year consisting of twelve 30-day months. The Class R
Certificates do not accrue interest.

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

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

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

     APPLICABLE STATE LAW: For purposes of Section 9.13(d), the Applicable State
Law shall be (a) the law of the State of New York, and (b) such other state law
whose applicability shall have been brought to the attention of the Trustee by
either (i) an Opinion of Counsel delivered to it or (ii) written notice from the
appropriate taxing authority as to the applicability of such state law.

     APPLIED LOSS AMOUNT: With respect to any Class of Offered Certificates and
as to any Distribution Date, the sum of the Realized Losses with respect to
Mortgage Loans which have been applied in reduction of the Current Principal
Amount of such Class.

                                       -3-

<PAGE>

     APPRAISED VALUE: With respect to any 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 AGREEMENT: The Assignment, Assumption and Recognition Agreement
dated January 30, 2001, among EMC, GreenPoint and the Trustee, as trustee,
attached hereto as Exhibit M, pursuant to which EMC's rights under the
Underlying Purchase Agreements and the Underlying Assignment Agreements were
assigned to the Trust.

     ASSUMED FINAL DISTRIBUTION DATE: February 25, 2031.

     BALLOON LOAN: Each of the Mortgage Loans having an original term to
maturity that is shorter than the related amortization term.

     BALLOON PAYMENT: With respect to any Balloon Loan, the related Scheduled
Payment payable on the stated maturity date of such Balloon Loan.

     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, a Deficient Valuation
or Debt Service Reduction, as reported by the applicable Sub-Servicer.

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

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

     CERTIFICATE: Any mortgage pass-through certificate evidencing a beneficial
ownership interest in the Trust Fund signed and countersigned by the Trustee in
substantially the forms annexed hereto as Exhibits A-1, A-2, A-3, A-4, A-5 and
A-6, with the blanks therein appropriately completed.

     CERTIFICATE ACCOUNT: The account or accounts created and maintained
pursuant to Section 4.02, which shall be denominated "Wells Fargo Bank
Minnesota, National Association, as Trustee f/b/o holders of Structured Asset
Mortgage Investments Inc., Mortgage Pass-Through Certificates, Series 2001-3 -
Certificate Account."

     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.

                                       -4-

<PAGE>

     CERTIFICATES: The Senior Certificates and the Subordinate Certificates.

     CLASS: With respect to the Certificates, A-1, A-2, M-1, M-2, B, C, and R.

     CLASS A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an amount
equal to the excess (if any) of (x) the Current Principal Amount of the Class A
Certificates immediately prior to such Distribution Date over (y) the difference
between (a) the aggregate Scheduled Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (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) and (b) the aggregate Scheduled Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(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) multiplied by the
sum of (A) approximately 11.50% and (B) the Current Specified
Overcollateralization Percentage.

     CLASS B PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an amount
equal to the excess (if any) of (x) the Current Principal Amount of the Class B
Certificates immediately prior to such Distribution Date over (y) the difference
between (a) the aggregate Scheduled Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (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) and (b) the sum of (1) the Current
Principal Amount of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(2) the Current Principal Amount of the Class M-1 Certificates (after taking
into account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (3) the Current Principal Amount of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), and (4) the aggregate Scheduled
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (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) multiplied by the Current Specified Overcollateralization Percentage.

     CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the excess (if any) of (x) the Current Principal Amount of the
Class M-1 Certificates immediately prior to such Distribution Date over (y) the
difference between (a) the aggregate Scheduled Principal Balance of the Mortgage
Loans as of the last day of the related Due Period (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) and (b) the sum of (1) the Current
Principal Amount of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date)
and (2) the

                                       -5-

<PAGE>

aggregate Scheduled Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (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) multiplied by the sum of (A) approximately 7.50% and (B) the
Current Specified Overcollateralization Percentage.

     CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the excess (if any) of (x) the Current Principal Amount of the
Class M-2 Certificates immediately prior to such Distribution Date over (y) the
difference between (a) the aggregate Scheduled Principal Balance of the Mortgage
Loans as of the last day of the related Due Period (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), and (b) the sum of (1) the Current
Principal Amount of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(2) the Current Principal Amount of the Class M-1 Certificates (after taking
into account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), and (3) the aggregate Scheduled Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (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) multiplied by the sum of (A)
approximately 4.00% and (B) the Current Specified Overcollateralization
Percentage.

     CLASS R-1 INTEREST: The uncertificated Residual Interest in REMIC 1.

     CLASS R-2 INTEREST: The uncertificated Residual Interest in REMIC 2.

     CLOSING DATE: January 30, 2001.

     CODE: The Internal Revenue Code of 1986.

     COMPENSATING INTEREST PAYMENTS: As defined in Section 6.06.

     CORPORATE TRUST OFFICE: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55749, and for certificate transfer
purposes: 11000 Broken Land Parkway, Columbia, MD 21044 Attention: SAMI 2001-3.

     CORRESPONDING CERTIFICATE: With respect to REMIC 1 Regular Interest LT1B,
REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular
Interest LT1E and REMIC 1 Regular Interest LT1F, the Class A-1 Certificates,
Class A-2 Certificates, Class M-1 Certificates, Class M-2 Certificates and Class
B Certificates, respectively.

                                       -6-

<PAGE>

     CURRENT INTEREST With respect to each Class of the Offered Certificates and
each Distribution Date is the interest accrued at the applicable Pass-Through
Rate for the applicable Accrual Period on the Current Principal Amount of such
Class plus any amount previously distributed with respect to interest for such
Class that is recovered as a voidable preference by a trustee in bankruptcy.

     CURRENT PRINCIPAL AMOUNT: With respect to any Certificate as of any
Distribution Date (other than a Class R Certificate or Class C Certificate), the
initial principal amount of such Certificate, as reduced by (i) all amounts
distributed on previous Distribution Dates on such Certificate with respect to
principal, less (ii) the principal portion of all Applied Realized Loss Amounts
allocated prior to such Distribution Date to such Certificate. With respect to
any Class of Certificates, the Current Principal Amount thereof will equal the
sum of the Current Principal Amounts of all Certificates in such Class. With
respect to the Class C Certificates as of any date of determination, an amount
equal to the excess, if any, of (A) the then aggregate Uncertificated Principal
Balances of the REMIC 1 Regular Interests over (B) the then aggregate Current
Principal Amount of the Senior and the Subordinate Certificates then
outstanding. The Class R Certificates will not have a Current Principal Amount.

     CURRENT SPECIFIED OVERCOLLATERALIZATION PERCENTAGE: With respect to any
Distribution Date, a percentage equal to (a) the Specified Overcollateralization
Amount divided by (b) the aggregate Scheduled Principal Balance of the Mortgage
Loans as of the last day of the related Due Period (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).

     CUT-OFF DATE: January 1, 2001.

     CUT-OFF DATE BALANCE: $171,087,585.

     DEBTOR RELIEF LAWS: Any applicable liquidation, conservatorship,
receivership, bankruptcy, insolvency, rearrangement, moratorium, reorganization,
or similar debtor relief laws affecting the rights of creditors generally from
time to time in effect.

     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.

     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 and the Master Servicer), the
deposits of which are fully insured by the FDIC, BIF or SAIF to the extent
provided by law.

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

     DISQUALIFIED ORGANIZATION: Any of the following: (i) the United States, any
State or 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 upon an Opinion of Counsel which shall not be at the
expense of the Trustee that the holding of an ownership interest in a Residual
Certificate by such Person may cause REMIC 1 or REMIC 2 or any Person having an
ownership interest in any Class of Certificates (other than such Person) to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the transfer of an ownership interest in a Residual
Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.

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

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

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

     DUE PERIOD: With respect to any Distribution Date, 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.

                                       -8-

<PAGE>

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

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

     EVENT OF DEFAULT: An event described in Section 8.01.

     EXCESS CASHFLOW: With respect to any Distribution Date, the sum of (a) the
Excess Overcollateralization Amount and (b) the Remaining Excess Spread, in each
case for such Distribution Date.

     EXCESS OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date,
the excess, if any, of (a) the Overcollateralization Amount over (b) the
Specified Overcollateralization Amount, in each case for such Distribution Date.

     EXCESS SPREAD: With respect to any Distribution Date, the excess, if any,
of the Interest Funds for such Distribution Date over required distributions of
interest on the Offered Certificates on such Distribution Date.

     EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date,
the lesser of (a) the excess, if any, of the Specified Overcollateralization
Amount and for such Distribution Date over the Overcollateralization Amount
(after giving effect to distributions of principal on the Certificates other
than any Extra Principal Distribution Amount) and for such Distribution Date and
(b) the Excess Spread for such Distribution Date.

     FANNIE MAE: Fannie Mae (formerly the Federal National Mortgage Association)
or any successor thereto.

     FDIC: Federal Deposit Insurance Corporation or any successor thereto.

     FHA: The Federal Housing Authority, or any successor thereto.

     FINANCIAL INTERMEDIARY: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.

     FRACTIONAL UNDIVIDED INTEREST: With respect to any Certificate (other than
a Class R Certificate), the fractional undivided interest evidenced by such
Certificate in the related Class of Certificates, the numerator of which is the
Current Principal Amount of such Certificate and the denominator of which is the
Current Principal Amount of such Class. With respect to a Class R Certificate,
the Percentage Interest therein as stated on the face thereof. With respect to
the Certificates in the aggregate, the fractional undivided interest evidenced
by (i) a Class R Certificate will be deemed to equal 1.00% multiplied by a the
Percentage Interest therein as state on the face thereof and (ii) a Certificate
of any other Class will be deemed to equal 99.00% multiplied by a fraction, the
numerator of which is the Current Principal Amount of such Certificate and the
denominator of which is the Current Principal Amount of all the Certificates
(other than the Class R Certificates).

                                       -9-

<PAGE>

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

     FUNDS TRANSFER DATE: As to any Distribution Date, the second Business Day
immediately preceding such Distribution Date.

     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).

     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, and their respective officers, directors,
agents and employees, and any separate co-trustee and its officers, directors,
agents and employees.

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

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

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

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

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

     INSURED EXPENSES: Expenses covered by any Insurance Policy.

                                      -10-

<PAGE>

     INSURER: Any issuer of an Insurance Policy.

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

     INTEREST CARRY FORWARD AMOUNT: With respect to each Class of the Offered
Certificates and each Distribution Date, the sum of (1) the excess of (A)
Current Interest for such Class with respect to prior Distribution Dates over
(B) the amount actually distributed to such Class with respect to interest on
such prior Distribution Dates and (2) interest on such excess (to the extent
permitted by applicable law) at the applicable Pass-Through Rate.

     INTEREST FUNDS: With respect to any Distribution Date, an amount equal to
the aggregate of the following amounts with respect to the Mortgage Loans: (a)
all previously undistributed payments on account of interest received after the
Cut-off Date and on or prior to the related Determination Date (including the
interest portion of Scheduled Payments and the interest portion of Net
Liquidation Proceeds), less the Master Servicing Fee and (b) the interest
portion of any Monthly Advances and Compensating Interest Payments by the Master
Servicer or the applicable Sub- Servicers with respect to such Distribution
Date, except:

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

          (ii) the interest portion of all Liquidation Proceeds received after
     the applicable Prepayment Period;

          (iii) the interest portion of all payments 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
     interest and respecting which, and to the extent that, there are any
     unreimbursed Monthly Advances;

          (v) the interest portion of amounts representing Monthly Advances
     determined to be Nonrecoverable Advances;

          (vi) amounts in respect of interest permitted to be withdrawn from the
     Certificate Account pursuant to Subsection 4.03(a); and

          (vii) the Trustee Fee for such Distribution Date.

     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: The difference between (i) one
     month's interest at the applicable Net Rate on the amount of such
     prepayment and (ii) the amount of

                                      -11-

<PAGE>

     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.

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

     LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
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 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 Sub-Servicer and not recovered by the Master Servicer or
the related Sub-Servicer under any Primary Mortgage Insurance Policy for reasons
other than the Master Servicer's or the related Sub-Servicer's failure to ensure
the maintenance of or compliance with a Primary Mortgage Insurance Policy, 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-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.

                                      -12-

<PAGE>

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

     MARKER RATE: With respect to the Class C Certificates and any Distribution
Date, a per annum rate equal to two (2) times the weighted average of the
Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interest LT1B,
REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular
Interest LT1E, REMIC 1 Regular Interest LT1F and REMIC 1 Regular Interest LT1G:

     (i)  with the rate on REMIC 1 Regular Interest LT1B subject to a cap equal
          to (A) in the case of any Distribution Date up to and including the
          Optional Termination Date, the lesser of (x) 7.75% per annum and (y)
          the Net WAC Cap Rate and (B) in the case of any Distribution Date
          after the Optional Termination Date, the lesser of (x) 8.25% per annum
          and (y) the Net WAC Cap Rate for the purpose of this calculation;

     (ii) with the rate on REMIC 1 Regular Interest LT1C subject to a cap equal
          to (A) in the case of any Distribution Date up to and including the
          Optional Termination Date, the lesser of (x) 7.625% per annum and (y)
          the Net WAC Cap Rate and (B) in the case of any Distribution Date
          after the Optional Termination Date, the lesser of (x) 8.125% per
          annum and (y) the Net WAC Cap Rate for the purpose of this
          calculation;

     (iii) with the rate on REMIC 1 Regular Interest LT1D subject to a cap equal
          to (A) in the case of any Distribution Date up to and including the
          Optional Termination Date, the lesser of (x) 7.070% per annum and (y)
          the Net WAC Cap Rate and (B) in the case of any Distribution Date
          after the Optional Termination Date, the lesser of (x) 7.570% per
          annum and (y) the Net WAC Cap Rate for the purpose of this
          calculation;

     (iv) with the rate on REMIC 1 Regular Interest LT1E subject to a cap equal
          to (A) in the case of any Distribution Date up to and including the
          Optional Termination Date, the lesser of (x) 7.520% per annum and (y)
          the Net WAC Cap Rate and (B) in the case of any Distribution Date
          after the Optional Termination Date, the lesser of (x) 8.020% per
          annum and (y) the Net WAC Cap Rate for the purpose of this
          calculation;

     (v)  with the rate on REMIC 1 Regular Interest LT1F subject to a cap equal
          to (A) in the case of any Distribution Date up to and including the
          Optional Termination Date, the lesser of (x) 8.060% per annum and (y)
          the Net WAC Cap Rate and (B) in the case of any Distribution Date
          after the Optional Termination Date, the lesser of (x) 8.560% per
          annum and (y) the Net WAC Cap Rate for the purpose of this
          calculation; and

     (v)  with the rate on REMIC 1 Regular Interest LT1G subject to a cap of
          zero for the purpose of this calculation.

                                      -13-

<PAGE>

     MASTER SERVICER: As of the Closing Date, GMAC Mortgage Corporation, and,
thereafter, its respective successors in interest who meet the qualifications
pursuant to this Agreement.

     MASTER SERVICING FEE: As to any Mortgage Loan and date of determination, an
amount equal to the product of (i) the Scheduled Principal Balance of such
Mortgage Loan as of the beginning of the related Due Period and (ii) the Master
Servicing Fee Rate.

     MASTER SERVICING FEE RATE: As to any Mortgage Loan, a per annum rate equal
to 0.50%.

     MAXIMUM LT1G UNCERTIFICATED ACCRUED INTEREST DEFERRAL AMOUNT: With respect
to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LT1G for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1G minus the REMIC 1
Overcollateralized Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1B with the rate
on REMIC 1 Regular Interest LT1B subject to a cap equal to (A) in the case of
any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) 7.75% per annum and (y) the Net WAC Cap Rate and (B) in the case
of any Distribution Date after the Optional Termination Date, the lesser of (x)
8.25% per annum and (y) the Net WAC Cap Rate for the purpose of this
calculation, Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1C,
with the rate on REMIC 1 Regular Interest LT1C subject to a cap equal to (A) in
the case of any Distribution Date up to and including the Optional Termination
Date, the lesser of (x) 7.625% per annum and (y) the Net WAC Cap Rate and (B) in
the case of any Distribution Date after the Optional Termination Date, the
lesser of (x) 8.125% per annum and (y) the Net WAC Cap Rate for the purpose of
this calculation, Uncertificated Accrued Interest on REMIC 1 Regular Interest
LT1D with the rate on REMIC 1 Regular Interest LT1D subject to a cap equal to
(A) in the case of any Distribution Date up to and including the Optional
Termination Date, the lesser of (x) 7.070% per annum and (y) the Net WAC Cap
Rate and (B) in the case of any Distribution Date after the Optional Termination
Date, the lesser of (x) 7.570% per annum and (y) the Net WAC Cap Rate for the
purpose of this calculation, Uncertificated Accrued Interest on REMIC 1 Regular
Interest LT1E with the rate on REMIC 1 Regular Interest LT1E subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 7.520% per annum and (y) the Net
WAC Cap Rate and (B) in the case of any Distribution Date after the Optional
Termination Date, the lesser of (x) 8.020% per annum and (y) the Net WAC Cap
Rate for the purpose of this calculation and Uncertificated Accrued Interest on
REMIC 1 Regular Interest LT1F with the rate on REMIC 1 Regular Interest LT1F
subject to a cap equal to (A) in the case of any Distribution Date up to and
including the Optional Termination Date, the lesser of (x) 8.060% per annum and
(y) the Net WAC Cap Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 8.560% per annum and (y) the Net
WAC Cap Rate for the purpose of this calculation.

     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.

                                      -14-

<PAGE>

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

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

     MOODY'S: Moody's Investors Service, Inc.

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

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

     MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of January 30, 2001, between EMC Mortgage Corporation, as seller, and
Structured Asset Mortgage Investments Inc., as purchaser, and all amendments
thereof and supplements thereto, attached hereto as Exhibit J.

     MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B, and as
amended from time to time to reflect the repurchase or substitution of Mortgage
Loans pursuant to this Agreement, such schedule setting forth the following
information with respect to each Mortgage Loan: (1) the Seller's Mortgage Loan
identifying number; (2) the Mortgagor's name; (3) the street address of the
Mortgaged Property including the city and the state code; (4) a code indicating
whether the Mortgaged Property is a single family residence, condominium, shares
in a cooperative corporation, or a 2-4 family residence; (5) the original months
to maturity or the remaining months to maturity from the Cut-off Date, in any
case based on the original amortization schedule, and if different, the maturity
expressed in the same manner but based on the actual amortization schedule; (6)
the Loan- to-Value Ratio at origination; (7) the Mortgage Interest Rate as of
the origination and Cut-off Dates; (8) the date on which the Mortgage Loan was
originated; (9) the stated maturity date; (10) the amount of the Scheduled
Payment; (11) the last payment date on which a payment was actually applied to
the outstanding principal balance; (12) the original principal amount of the
Mortgage Loan; (13) the principal balance of the Mortgage Loan as of the close
of business on the Cut-off

                                      -15-

<PAGE>

Date, after deduction of the payments of principal due on or before the Cut-off
Date, whether or not collected; (15) the date on which the first Scheduled
Payment was due; (16) a code indicating whether the Mortgaged Property is
owner-occupied, a second home or an investment property; and (17) a code
indicating the purpose of the loan. With respect to the Mortgage Loans in the
aggregate, the Mortgage Loan Schedule shall set forth the following information,
as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; and (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans.

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

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

     MORTGAGOR: The obligor on a Mortgage Note.

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

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

     NET RATE: With respect to each Mortgage Loan, the Mortgage Interest Rate in
effect from time to time less the sum of (i) the Master Servicing Fee Rate, and
(ii) the Trustee Fee Rate.

     NET WAC CAP RATE: With respect to any Distribution Date, the weighted
average of the Net Rates of the Mortgage Loans, weighted on the basis of the
Scheduled Principal Balances thereof as of the beginning of the related Due
Period.

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

     OFFERED CERTIFICATE: Any of the Class A-1, Class A-2, Class M-1, Class M-2
and Class B Certificates.

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

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

                                      -16-

<PAGE>

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

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

     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.

     OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Scheduled Principal Balance of the Mortgage
Loans as of the last day of the related Due Period over (b) the Current
Principal Amounts of the Offered Certificates as of such date (after taking into
account the payment of principal other than any Extra Principal Distribution
Amount on such Certificates on such Distribution Date).

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

     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) 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;

          (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

                                      -17-

<PAGE>

     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 rating available and rated AAAm or AAAm-G
     by Standard & Poor's, including any such funds for which Wells Fargo Bank
     Minnesota, National Association, or any affiliate thereof serves as an
     investment advisor, manager, administrator, shareholder, servicing agent,
     and/or custodian or sub-custodian;

          (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 Certificates by such Rating Agency below
     the lower of the then-current rating or the rating assigned to such
     Certificates as of the Closing Date by such Rating Agency, as evidenced in
     writing; and

          (vii) GMAC Variable Denomination Adjustable Rate Demand Notes
     constituting unsecured, senior debt obligations of General Motors
     Acceptance Corporation as outlined in the prospectus dated June 17, 1998
     and rated by each Rating Agency in its highest short- term rating category
     available;

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

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

                                      -18-

<PAGE>

     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: Initially, the Residual Certificates and the Private
Certificates.

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

     PRIMARY MORTGAGE INSURANCE POLICY: With respect to any Mortgage Loan, any
primary mortgage guaranty insurance policy issued in connection with a Mortgage
Loan which provides compensation to a Mortgage Note holder in the event of
default by the obligor under such Mortgage Note or the related Security
Instrument, or any replacement policy therefor.

     PRINCIPAL DISTRIBUTION AMOUNT: With respect to each Distribution Date, the
sum of (x) the Principal Funds for such Distribution Date plus (y) any Extra
Principal Distribution Amount for such Distribution Date less (z) any Excess
Overcollateralization Amount for such Distribution Date.

     PRINCIPAL FUNDS: With respect to any Distribution Date, an amount equal to
the aggregate of the following amounts with respect to the Mortgage Loans: (a)
all previously undistributed payments on account of principal (including the
principal portion of Scheduled Payments, Principal Prepayments and the principal
portion of Net Liquidation Proceeds), and (b) the principal portion of any
Monthly Advances and Compensating Interest Payments by the Master Servicer or
the applicable Sub-Servicers with respect to such Distribution Date, except:

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

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

          (iii) all payments of principal, 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 and respecting which, and to the extent that, there are any
     unreimbursed Monthly Advances;

          (v) the principal portion of amounts representing Monthly Advances
     determined to be Nonrecoverable Advances; and

          (vi) amounts in respect of principal permitted to be withdrawn from
     the Certificate Account pursuant to Subsection 4.03(a).

     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

                                      -19-

<PAGE>

the purchase price in connection with any purchase of a Mortgage Loan, any cash
deposit in connection with the substitution of a Mortgage Loan, and the
principal portion of Net Liquidation Proceeds.

     PRIVATE CERTIFICATES: Any of the Class C and Class R Certificates.

     PROSPECTUS SUPPLEMENT: That certain Prospectus Supplement dated January 25,
2001 relating to the public offering of the Senior Certificates and the Offered
Subordinate Certificates.

     PROTECTED ACCOUNT: An account established and maintained in the name of the
Trustee for the benefit of Certificateholders by the Master Servicer or any
Sub-Servicer with respect to the Mortgage Loans and with respect to REO Property
in a Designated Depository Institution or Rating Agency Eligible Account for
receipt of principal and interest and other amounts as described in Section
4.01.

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

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

     RATING AGENCIES: S&P and Moody's.

     RATING AGENCY ELIGIBLE ACCOUNT: An account, including one maintained with
the Trustee or the Master Servicer, which is either (i) an account or accounts
maintained with a federal or state chartered depository institution the accounts
of which are insured by the FDIC (to the limits established by the FDIC) and the
short-term debt ratings of which are rated in the highest rating categories by
the Rating Agencies or (ii) a trust account or accounts maintained with a
federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity or (iii) an account or accounts of a
depository institution acceptable to the Rating Agencies (as evidenced in
writing by the Rating Agencies that use of any such account as a Protected
Account will not have an adverse effect on the then-current ratings assigned to
the Classes of the Certificates then rated by the Rating Agencies). Rating
Agency Eligible Accounts may bear interest.

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

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

                                      -20-

<PAGE>

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

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

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

     REMAINING EXCESS SPREAD: With respect to any Distribution Date, the Excess
Spread less any Extra Principal Distribution Amount, in each case for such
Distribution Date.

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

     REMIC 1: The corpus of the trust created by this Agreement, consisting of
the Mortgage Loans and the other assets described in Section 2.01(a).

     REMIC 1 INTEREST LOSS ALLOCATION AMOUNT: With respect to any Distribution
Date, an amount equal to (a) the product of (i) the aggregate Principal Balance
of the Mortgage Loans and related REO Properties then outstanding and (ii) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest LT1A minus
the Marker Rate, divided by (b) 12.

     REMIC 1 SPECIFIED OVERCOLLATERALIZATION AMOUNT: 1% of the Specified Target
Amount.

     REMIC 1 OVERCOLLATERALIZED AMOUNT: With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 1 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest
LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest LT1E and REMIC 1
Regular Interest LT1F in each case as of such date of determination.

     REMIC 1 PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any Distribution
Date, an amount equal to (a) the product of (i) the aggregate Principal Balance
of the Mortgage Loans and related REO Properties then outstanding and (ii) 1
minus a fraction, the numerator of which is two times the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1B, REMIC 1
Regular Interest LT1C, REMIC 1 Regular Interest LT1D and REMIC 1 Regular
Interest LT1E and REMIC 1 Regular Interest LT1F and the denominator of which is
the aggregate of the Uncertificated Principal Balances of REMIC 1 Regular
Interests.

     REMIC 1 REGULAR INTEREST LT1A: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1. REMIC 1 Regular Interest LT1A shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1B: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC

                                      -21-

<PAGE>

1 Regular Interest LT1B shall accrue interest at the related Uncertificated
REMIC 1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

     REMIC 1 REGULAR INTEREST LT1C: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1C shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1D: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1D shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1E: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1E shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1F: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1F shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1G: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1G shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTERESTS: REMIC 1 Regular Interest LT1A, REMIC 1 Regular
Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D,
REMIC 1 Regular Interest LT1E, REMIC 1 Regular Interest LT1F and REMIC 1 Regular
Interest LT1G.

     REMIC 2: The segregated pool of assets consisting of all of the REMIC 1
Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the

                                      -22-

<PAGE>

Holders of the Class R Certificates (as holders of the Class R-2 Interest),
pursuant to Article II hereunder, and all amounts deposited therein, with
respect to which a separate REMIC election is to be made.

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

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

     REMIC OPINION: An Opinion of Independent Counsel, to the effect that the
proposed action described therein would not, under the REMIC Provisions, (i)
cause REMIC 1 or REMIC 2 to fail to qualify as a REMIC while any regular
interest in REMIC 1 or REMIC 2 is outstanding, (ii) result in a tax on
prohibited transactions with respect to REMIC 2 or REMIC 2 or (iii) constitute a
taxable contribution to REMIC 1 or REMIC 2 after the Startup Day.

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

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

     REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased pursuant to Article II
an amount equal to the sum of (i) 100% of the Outstanding Principal Balance of
such Mortgage Loan as of the date of repurchase (or if the related Mortgaged
Property was acquired with respect thereto, 100% of the Outstanding Principal
Balance at the date of the acquisition), (ii) accrued but unpaid interest on the
Outstanding Principal Balance at the related Mortgage Interest Rate, through and
including the last day of the month of repurchase and reduced by (iii) any
portion of the related Master Servicing Fees, Monthly Advances and advances
payable to the purchaser of the Mortgage Loan.

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

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

     RESIDUAL CERTIFICATES: The Class R Certificates.

     RESIDUAL INTEREST: The sole class of "residual interests" in a REMIC within
the meaning of Section 860G(a)(2) of the Code.

     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

                                      -23-

<PAGE>

for the administration of this Agreement or any other officer of the Trustee to
whom matters under this Agreement may be referred.

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

     S&P: Standard and Poor's Ratings Services 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) less (ii) any Principal Prepayments (including the principal portion of
Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.

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

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

                                      -24-

<PAGE>

DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR
ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE SERVICING,
MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN
ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS
PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED
TRANSACTION EXEMPTION ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23
AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY DUTIES ON THE PART OF
THE SELLER, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED
BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE
EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON
BEHALF OF A HOLDER OF A PRIVATE CERTIFICATE."

     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: Any of the Class A-1 Certificates and the Class A-2
Certificates.

     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 Trustee by the Master Servicer as such list may be amended from time to
time.

     SPECIFIED OVERCOLLATERALIZATION AMOUNT: An amount equal to $855,437.92.

     STARTUP DAY: January 30, 2001.

     STEPDOWN DATE: The Distribution Date which is the earlier to occur of (i)
the distribution date on which the aggregate Current Principal Amount of the
Senior Certificates has been reduced to zero and (ii) the later to occur of (x)
the Distribution Date occurring in February 2004 and (y) the first Distribution
Date for which the aggregate Current Principal Amount of the Offered Subordinate

                                      -25-

<PAGE>

Certificates divided by the aggregate Scheduled Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (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) is greater than or equal to
11.50%.

     SUBORDINATE CERTIFICATE: A Class M-1, Class M-2, Class B or Class C
Certificate.

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

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

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

     TAX ADMINISTRATION AND TAX MATTERS PERSON: The Master Servicer or any
successor thereto or assignee thereof shall serve as tax administrator hereunder
and as agent for each Tax Matters Person. The Holder of each Class of Residual
Certificates shall be the Tax Matters Person for each of REMIC 1 and REMIC 2, as
more particularly set forth in Section 9.13 hereof.

     TRIGGER EVENT: A Trigger Event is in effect with respect to any
Distribution Date if either:

     (1) the aggregate Scheduled Principal Balance of Mortgage Loans that are 60
or more days delinquent as of the close of business on the last day of the
preceding calendar month exceeds 2.25% (in the case of the 36th Distribution
Date through the 60th Distribution Date) or 3.25% (in the case of any
Distribution Date thereafter) of the aggregate Scheduled Principal Balance of
the Mortgage Loans as of such Distribution Date (prior to 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); or

     (2) in the case of any Distribution Date after the 36th Distribution Date,
the cumulative amount of Realized Losses incurred on the Mortgage Loans from the
Cut-off Date through the end of the calendar month immediately preceding such
Distribution Date exceeds 10.00% of the sum of (x) the aggregate Current
Principal Amount of the Offered Subordinate Certificates (or, if the Current
Principal Amounts of the Class A Certificates have been reduced to zero, the
aggregate

                                      -26-

<PAGE>

Current Principal Amount of the Offered Subordinate Certificates other than the
class of Offered Subordinate Certificates with the highest payment priority)
after giving effect to distributions that would be made on such Distribution
Date if no Trigger Event were in effect and (y) the Overcollateralization
Amount.

For purposes of the foregoing calculation, 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.

     TRUSTEE FEE: As to any Mortgage Loans and Distribution Date, an amount
equal to the product of (i) the Scheduled Principal Balance of such Mortgage
Loan as of the beginning of the related Due Period and (ii) the Trustee Fee
Rate.

     TRUSTEE FEE RATE: As to any Mortgage Loan, a per annum rate equal to
0.0115%.

     TRUST FUND or TRUST: REMIC 1 and REMIC 2.

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

     UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC 1 Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass-Through Rate on the Uncertificated Principal
Balance of such REMIC Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Net Interest Shortfalls and the interest portion
of any Realized Losses (allocated to such REMIC Regular Interests as set forth
in Section 6.09(b).

     UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC 1 Regular
Interest, the principal amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 6.09(a)
and, if and to the extent necessary and appropriate, shall be further reduced on
such Distribution Date by Realized Losses as provided in Section 6.09(b). The
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1G shall be
increased by interest deferrals as provided in Section 6.09(a)(i). The
Uncertificated Principal Balance of each REMIC 1 Regular Interest shall never be
less than zero.

     UNCERTIFICATED REMIC 1 PASS-THROUGH RATE: With respect to REMIC 1 Regular
Interest LT1A, REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest LT1C,
REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular
Interest LT1F and REMIC 1 Regular Interest LT1G and any Distribution Date other
than the first Distribution Date, a per annum rate equal to the Net WAC Cap
Rate.

     UNDERLYING ASSIGNMENT AGREEMENTS: The following agreements, attached hereto
as Exhibits L-1, L-2, and L-3: (i) the Assignment, Assumption and Recognition
Agreement, dated December

                                      -27-

<PAGE>

20, 2000, among EMC, GMAC Mortgage Corporation and GreenPoint, (ii) the
Assignment, Assumption and Recognition Agreement, dated January January 5, 2001,
among EMC, GMAC Mortgage Corporation and GreenPoint and (iii) the Assignment,
Assumption and Recognition Agreement, dated January 18, 2001, among EMC, GMAC
Mortgage Corporation and GreenPoint.

     UNDERLYING PURCHASE AGREEMENTS: The following agreements, attached hereto
as Exhibits K- 1, K-2, and K-3: (i) the Mortgage Loan Purchase and Interim
Servicing Agreement, dated as of December 18, 2000, between GMAC Mortgage
Corporation and GreenPoint, (ii) the Mortgage Loan Purchase and Interim
Servicing Agreement, dated as of January 2, 2001, between GMAC Mortgage
Corporation and GreenPoint and (iii) the Mortgage Loan Purchase and Interim
Servicing Agreement, dated as of January 18, 2001, between GMAC Mortgage
Corporation and GreenPoint.

     UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or REO
Property such that the complete restoration of such Mortgaged Property or REO
Property is not fully reimbursable by the hazard insurance policies required to
be maintained pursuant to Section 3.11, without regard to whether or not such
policy is maintained.

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

     UNPAID REALIZED LOSS AMOUNT: With respect to any Class of the Offered
Certificates and as to any Distribution Date, is the excess of (i) Applied
Realized Loss Amounts with respect to such Class over (ii) the sum of all
distributions in reduction of the Applied Realized Loss Amounts on all previous
Distribution Dates. Any amounts distributed to a Class of Offered Certificates
in respect of any Unpaid Realized Loss Amount will not be applied to reduce the
Current Principal Amount of such Class.

                                      -28-

<PAGE>

                                   ARTICLE II

                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates

      Section 2.01. CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE. (a) The Seller
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date, but excluding any payments of principal and interest due
on or prior to the Cut-off Date; (ii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Certificate Account (subject to the right of the Master Servicer to receive all
income from Permitted Investments under Section 4.02(c)), (iii) such assets
relating to the Mortgage Loans as from time to time may be held by the Master
Servicer or the Sub-Servicers in servicing accounts or Protected Accounts for
the benefit of the holder of the Mortgage Loans, (iv) any REO Property, (v) the
Required Insurance Policies and any amounts paid or payable by the insurer under
any Insurance Policy (to the extent the mortgagee has a claim thereto), (vi) the
Mortgage Loan Purchase Agreement to the extent provided in Subsection 2.03(a),
(vii) the rights with respect to the Underlying Purchase Agreements and the
Underlying Assignment Agreements, as conveyed to the Trustee as trustee pursuant
to the Assignment Agreement, and (ix) any proceeds of the foregoing.

     (b) In connection with the above transfer and assignment, the Seller hereby
deposits or causes to be deposited with the Trustee, with respect to each
Mortgage Loan, the items listed in (a) through (i) of Subsection 6.03 of each
Underlying Purchase Agreement.

     (c) In connection with the assignment of any Mortgage Loan registered on
the MERS(R) System, the Seller agrees that it will cause, at the Seller's
expense, within 30 days of the Closing Date, the MERS(R) System to indicate that
such Mortgage Loans have been assigned by the Seller to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders. The
Trustee shall include in any certifications made pursuant to this Article II
whether or not the Mortgage Loans have been transferred to the MERS(R) System
but shall not have any ongoing responsibility to check the status of the
Mortgage Loans in the MERS(R) System.

     (d) It is intended that the conveyance of the Mortgage Loans by the Seller
to the Trustee as provided in this Section be, and be construed as, a sale of
the Mortgage Loans and the REMIC 1 Regular Interests as provided for in this
Section 2.01 by the Seller to the Trustee for the benefit of the
Certificateholders. It is, further, not intended that such conveyance be deemed
a pledge of the Mortgage Loans and the REMIC 1 Regular Interests by the Seller
to the Trustee to secure a debt or other obligation of the Seller. However, in
the event that the Mortgage Loans and the REMIC 1 Regular Interests are held to
be property of the Seller, or if for any reason this Agreement is held or deemed
to create a security interest in the Mortgage Loans and the REMIC 1 Regular
Interests, then it is intended that, (a) this Agreement shall also be deemed to
be a security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in this Section shall be deemed to
be (1) a grant by the Seller to the Trustee of a security interest in all of

                                      -29-

<PAGE>

the Seller's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to (A) the Mortgage
Loans, including the Mortgage Notes, the Mortgages, any related Insurance
Policies and all other documents in the related Mortgage Files, (B) all amounts
payable to the holders of the Mortgage Loans in accordance with the terms
thereof, (C) the REMIC 1 Regular Interests and (D) all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, including without limitation all amounts from time
to time held or invested in the Certificate Account or the Protected Accounts,
whether in the form of cash, instruments, securities or other property and (2)
an assignment by the Seller to the Trustee of any security interest in any and
all of the Seller's right (including the power to convey title thereto), title
and interest, whether now owned or hereafter acquired, in and to the property
described in the foregoing clauses (1)(A) through (D); (c) the possession by the
Trustee or any other agent of the Trustee of Mortgage Notes and such other items
of property as constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" or possession by a
purchaser or a person designated by such secured party, for purposes of
perfecting the security interest pursuant to the New York Uniform Commercial
Code and the Uniform Commercial Code of any other applicable jurisdiction
(including, without limitation, Sections 9-115, 9-305, 8-102, 8-301, 8-501 and
8-503 thereof); and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law. The
Seller and the Trustee shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the Mortgage Loans and the REMIC 1 Regular
Interests, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such
throughout the term of the Agreement.

     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 declares that it will hold all the documents (or certified copies
thereof) delivered to it pursuant to Section 2.01 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 Trustee shall
acknowledge with respect to each Mortgage Loan by an Initial Certification
substantially in the form of Exhibit G attached hereto, 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 45
days after the Closing Date (or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee), the Trustee agrees,
for the benefit of the Certificateholders, to review each Mortgage File
delivered to it. In conducting such review, the Trustee will ascertain whether
all required documents have been executed and received and whether those
documents relate, determined on the basis of the Mortgagor name, original
principal balance and loan number, to the Mortgage Loans it has received, as
identified in Exhibits B to this Agreement, as supplemented (PROVIDED, HOWEVER,
that with respect to those documents described in subclauses (f), (g) and (j) of
Subsection 6.03 of each Underlying Purchase Agreement, the Trustee's obligations
shall extend only to documents actually delivered pursuant to such subsections).
In performing any such review, the Trustee may conclusively rely on the
purported due execution and genuineness of any such document and on the
purported genuineness of any signature thereon. If the Trustee finds any
document constituting part of the

                                      -30-

<PAGE>

Mortgage File not to have been executed or received, or to be unrelated to the
Mortgage Loans identified in Exhibit B or to appear to be defective on its face,
the Trustee shall promptly provide GreenPoint with an Interim Certification in
the form of Exhibit N attached hereto. The Trustee shall enforce the obligation
of GreenPoint to correct or cure any such defect within 60 days from the date of
notice from the Trustee of the defect in accordance with Subsection 7.03 of each
Underlying Purchase Agreement.

     (b) No later than 180 days after the Closing Date, the Trustee will review,
for the benefit of the Certificateholders, the Mortgage Files delivered to it
and will execute and deliver or cause to be executed and delivered to
GreenPoint, the Seller and the Master Servicer, a Final Certification
substantially in the form annexed hereto as Exhibit H. In conducting such
review, the Trustee will ascertain whether an original of each document required
to be recorded has been returned from the recording office with evidence of
recording thereon or a certified copy has been obtained from the recording
office. If the Trustee finds any document constituting part of the Mortgage File
has not been received, or to be unrelated, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in Exhibit B or to appear defective on its face, the Trustee
shall promptly notify GreenPoint (PROVIDED, HOWEVER, that with respect to those
documents described in subsection (f) and (g) of Subsection 6.03 of each
Underlying Purchase Agreement, the Trustee's obligations shall extend only to
the documents actually delivered pursuant to such subsections). The Trustee
shall enforce GreenPoint's obligation to correct or cure any such defect within
60 days from the date of notice from the Trustee of the defect in accordance
with Subsection 7.03 of each Underlying Purchase Agreement; provided, that
notwithstanding the terms of the Underlying Purchase Agreement, the delivery of
a lost note affidavit will satisfy any requirement by GreenPoint to deliver a
Mortgage Note.

     (c) In the event that a Mortgage Loan is purchased by GreenPoint in
accordance with Subsections 2.02(a) or (b) above, the Trustee shall deposit the
Repurchase Price in the Certificate Account. Upon deposit of the Repurchase
Price in the Certificate Account, the Trustee shall release to the applicable
entity the related Mortgage File and shall execute and deliver all instruments
of transfer or assignment, without recourse, furnished to it by such entity as
are necessary to vest in such entity title to and rights under the Mortgage
Loan. Such purchase shall be deemed to have occurred on the date on which the
Repurchase Price in available funds is received by the Trustee. The Trustee
shall amend the Mortgage Loan Schedule, which was previously delivered to it by
Seller in a form agreed to between the Seller and the Trustee, to reflect such
repurchase and shall promptly notify the Master Servicer and the Rating Agencies
of such amendment. The obligation of GreenPoint 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 AND OTHER AGREEMENTS. (a) The Seller hereby assigns to the Trustee all
of its right, title and interest in (i) the Mortgage Loan Purchase Agreement
(but none of its obligations) insofar as such contract relates to the
representations and warranties set forth in Exhibit C hereto regarding the
Mortgage Loans (including the substitution and repurchase obligations of EMC),
and (ii) in the Underlying Purchase Agreements and the Assignment Agreement;
provided that the obligations of EMC or GreenPoint

                                      -31-

<PAGE>

to substitute or repurchase 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 or the Master Servicer 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 Master Servicer, Seller or Trustee discovers a breach of any of
the representations and warranties set forth in Exhibit C or Subsection 7.02 of
the Underlying Purchase Agreements and such breach existed on the date the
representation and warranty was made, which breach materially and adversely
affects the value of the interests of Certificateholders or the Trustee in the
related Mortgage Loan, the party discovering the breach shall give prompt
written notice of the breach to the other parties. The Trustee shall enforce the
obligation of EMC or GreenPoint to cure, repurchase or substitute for the
related Mortgage Loan. The Trustee shall deposit any amounts received in
connection with the repurchase of a Mortgage Loan in the Certificate Account and
the Trustee, upon deposit of the Repurchase Price in the Certificate Account,
shall release to EMC or GreenPoint, as applicable, the related Mortgage File and
shall execute and deliver all instruments of transfer or assignment furnished to
it by EMC or GreenPoint, without recourse, as are necessary to vest in the
applicable entity title to and rights under the Mortgage Loan or any property
acquired with respect thereto. Such purchase shall be deemed to have occurred on
the date on which the Repurchase Price in available funds is received by the
Trustee. The Trustee shall amend the Mortgage Loan Schedule to reflect such
repurchase and shall promptly notify the Master Servicer and the Rating Agencies
of such amendment. Enforcement of the obligation of EMC or GreenPoint, to
purchase (or substitute a Substitute Mortgage Loan for) any Mortgage Loan or any
property acquired with respect thereto (or pay the Repurchase Price as set forth
in the above proviso) as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.

     Section 2.04. SUBSTITUTION OF MORTGAGE LOANS. In the event EMC provides a
Substitute Mortgage Loan to the Trustee, the Trustee shall examine the Mortgage
File for any Substitute Mortgage Loan in the manner set forth in Section 2.02(a)
and shall notify EMC and the Master Servicer in writing, within five Business
Days after receipt, whether or not the documents relating to the Substitute
Mortgage Loan satisfy the requirements of the third sentence of Subsection
2.02(a). Within two Business Days after such notification, EMC shall provide to
the Trustee for deposit in the Certificate Account the amount, if any, by which
the Outstanding Principal Balance as of the next preceding Due Date of the
Mortgage Loan for which substitution is being made, after giving effect to
Scheduled Principal due on such date, exceeds the Outstanding Principal Balance
as of such date of the Substitute Mortgage Loan, after giving effect to
Scheduled Principal due on such date, which amount shall be treated for the
purposes of this Agreement as if it were the payment by EMC of the Repurchase
Price for the purchase of a Mortgage Loan by such entity. After such
notification to EMC and, if any such excess exists, upon receipt of such
deposit, the Trustee shall accept such Substitute Mortgage Loan which shall
thereafter be deemed to be a Mortgage Loan hereunder. In the event of such a
substitution, accrued interest on the Substitute Mortgage Loan for the month in
which the substitution occurs and any Principal Prepayments made thereon during
such month shall be the property of the Trust Fund and accrued interest for such
month on the Mortgage Loan for which the substitution is made and any Principal
Prepayments made thereon during such month shall be the property of the
applicable entity. The Scheduled Principal on a Substitute Mortgage Loan due on

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<PAGE>

the Due Date in the month of substitution shall be the property of EMC, and the
Scheduled Principal on the Mortgage Loan for which the substitution is made due
on such Due Date shall be the property of the Trust Fund. Upon acceptance of the
Substitute Mortgage Loan, the Trustee shall release to the applicable entity the
related Mortgage File related to any Mortgage Loan released pursuant to this
Section 2.04 and shall execute and deliver all instruments of transfer or
assignment, without recourse, in form as provided to it as are necessary to vest
in the applicable entity title to and rights under any Mortgage Loan released
pursuant to this Section 2.04. The representations and warranties set forth in
Exhibit C shall be deemed to have been made by EMC with respect to each
Substitute Mortgage Loan as of the date of acceptance of such Mortgage Loan by
the Trustee. The Trustee shall amend the Mortgage Loan Schedule to reflect such
substitution and shall provide a copy of such amended Mortgage Loan Schedule to
the Master Servicer and the Rating Agencies.

     Section 2.05. ISSUANCE OF CERTIFICATES; CONVEYANCE OF REMIC 1 REGULAR
INTERESTS. (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 1 Regular Interests for the benefit of the Holders of the Certificates.
The Trustee acknowledges receipt of the REMIC 1 Regular Interests (which are
uncertificated) and declares that it holds and will hold the same in trust for
the exclusive use and benefit of the holders of the Certificates. The interests
evidenced by the Class R-1 Interest, together with the Regular Certificates,
constitute the entire beneficial ownership interest in REMIC 1.

     (c) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 (including the Residual Interest therein represented by the Class R-1
Interest) and the acceptance by the Trustee thereof, the Trustee, pursuant to
the written request of the Seller executed by an officer of the Seller, has
executed, authenticated and delivered to or upon the order of the Seller, the
Class R Certificates in authorized denominations evidencing the Class R-1
Interest and the Class R-2 Interest.

     Section 2.06. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The Trustee
hereby represents and warrants to the Seller and the Master Servicer as of the
Closing Date (and in the case of paragraphs (iv) and (v) below throughout the
term of the Agreement), that:

          (i) The Trustee is a national banking association duly organized,
     validly existing and in good standing under the laws of the United States
     with a principal place of business in Minneapolis, Minnesota.

          (ii) Subject to the right of the Trustee to appoint a co-trustee or
     separate trustee under Section 9.11 hereof in order to meet the legal
     requirements of FHA or a particular jurisdiction, the Trustee has full
     power, authority and legal right to execute and deliver this

                                      -33-

<PAGE>

     Agreement and to perform its obligations under this Agreement and has taken
     all necessary action to authorize the execution, delivery and performance
     by it of this Agreement and the Certificates;

          (iii) To the best of the Trustee's knowledge, after reasonable
     investigation, the execution and delivery by the Trustee of this Agreement
     and the Certificates and the performance by the Trustee of its obligations
     under this Agreement and the Certificates will not violate any provision of
     the Trustee's Articles of Association or By-Laws or any law or regulation
     governing the Trustee or any order, writ, judgment or decree of any court,
     arbitrator or governmental authority or agency applicable to the Trustee or
     any of its assets. To the best of the Trustee's knowledge, after reasonable
     investigation, such execution, delivery and performance will not require
     the authorization, consent or approval of, the giving of notice to, the
     filing or registration with, or the taking of any other action with respect
     to, any governmental authority or agency regulating the fiduciary
     activities of a national bank. To the best of the Trustee's knowledge,
     after reasonable investigation, such execution, delivery and performance
     will not conflict with, or result in a breach or violation of, any material
     indenture, mortgage, deed of trust, lease or other agreement or instrument
     to which the Trustee is a party or by which it or its properties is bound;

          (iv) This Agreement has been duly executed and delivered by the
     Trustee. This Agreement, when executed and delivered by the other parties
     hereto, will constitute the valid, legal and binding obligation of the
     Trustee, enforceable against the Trustee in accordance with its terms,
     except as the enforcement thereof may be limited by applicable Debtor
     Relief Laws and that certain equitable remedies may not be available
     regardless of whether enforcement is sought in equity or at law; and

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

     Section 2.07. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER. The
Seller hereby represents and warrants to the Trustee and the Master Servicer as
follows:

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

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

          (iii) the execution and delivery by the Seller of this Agreement have
     been duly authorized by all necessary corporate action on the part of the
     Seller; and neither the execution and delivery of this Agreement, nor the
     consummation of the transactions herein

                                      -34-

<PAGE>

     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.

     Section 2.08. REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER. (a)
The Master Servicer hereby represents and warrants to the Seller and the
Trustee, for the benefit of the Certificateholders, as of the Closing Date that:

          (i) it is validly existing and in good standing under the laws of the
     United States of America as a Pennsylvania corporation, and as Master
     Servicer has full power and authority to transact any and all business
     contemplated by this Agreement and to execute, deliver and comply with its
     obligations under the terms of this Agreement, the execution, delivery and
     performance of which have been duly authorized by all necessary corporate
     action on the part of the Master Servicer;

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          (ii) the execution and delivery of this Agreement by the Master
     Servicer and its performance and compliance with the terms of this
     Agreement will not (A) violate the Master Servicer's articles of
     incorporation or bylaws, (B) violate any law or regulation or any
     administrative decree or order to which it is subject or (C) constitute a
     default (or an event which, with notice or lapse of time, or both, would
     constitute a default) under, or result in the breach of, any material
     contract, agreement or other instrument to which the Master Servicer is a
     party or by which it is bound or to which any of its assets are subject,
     which violation, default or breach would materially and adversely affect
     the Master Servicer's ability to perform its obligations under this
     Agreement;

          (iii) this Agreement constitutes, assuming due authorization,
     execution and delivery hereof by the other respective parties hereto, a
     legal, valid and binding obligation of the Master Servicer, enforceable
     against it in accordance with the terms hereof, except as such enforcement
     may be limited by bankruptcy, insolvency, reorganization, moratorium and
     other laws affecting the enforcement of creditors' rights in general, and
     by general equity principles (regardless of whether such enforcement is
     considered in a proceeding in equity or at law);

          (iv) the Master Servicer is not in default with respect to any order
     or decree of any court or any order or regulation of any federal, state,
     municipal or governmental agency to the extent that any such default would
     materially and adversely affect its performance hereunder;

          (v) the Master Servicer is not a party to or bound by any agreement or
     instrument or subject to any charter provision, bylaw or any other
     corporate restriction or any judgment, order, writ, injunction, decree, law
     or regulation that may materially and adversely affect its ability as
     Master Servicer to perform its obligations under this Agreement or that
     requires the consent of any third person to the execution of this Agreement
     or the performance by the Master Servicer of its obligations under this
     Agreement;

          (vi) no litigation is pending or, to the best of the Master Servicer's
     knowledge, threatened against the Master Servicer which would prohibit its
     entering into this Agreement or performing its obligations under this
     Agreement;

          (vii) the Master Servicer, or an affiliate thereof, is a Fannie Mae
     and Freddie Mac approved seller/servicer;

          (viii) no consent, approval, authorization or order of any court or
     governmental agency or body is required for the execution, delivery and
     performance by the Master Servicer of or compliance by the Master Servicer
     with this Agreement or the consummation of the transactions contemplated by
     this Agreement, except for such consents, approvals, authorizations and
     orders (if any) as have been obtained;

          (ix) the consummation of the transactions contemplated by this
     Agreement are in the ordinary course of business of the Master Servicer;

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<PAGE>

          (x) the Master Servicer has obtained an errors and omissions insurance
     policy and a fidelity bond, each of which is in full force and effect, and
     each of which provides at least such coverage as is required hereunder; and

          (xi) the Master Servicer will use its reasonable efforts to maintain
     its membership in MERS in good standing, and will comply in all material
     respects with the rules and procedures of MERS in connection with the
     servicing of the Mortgage Loans that are registered with MERS.

          (b) It is understood and agreed that the representations and
warranties set forth in this Section 2.08 shall survive the execution and
delivery of this Agreement, and shall inure to the benefit of the Seller, the
Trustee and the Certificateholders. Upon discovery by the Seller, the Trustee or
the Master Servicer of a breach of any of the foregoing representations,
warranties and covenants that materially and adversely affects the interests of
the Seller or the Trustee, the party discovering such breach shall give prompt
written notice to the other parties.

     Any cause of action against the Master Servicer relating to or arising out
of the breach of any representations and warranties made in this Section shall
accrue upon discovery of such breach by either the Seller, the Master Servicer
or the Trustee or notice thereof by any one of such parties to the other
parties.

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                                   ARTICLE III

                 Administration and Servicing of Mortgage Loans

     Section 3.01. MASTER SERVICER TO SERVICE MORTGAGE LOANS. For and on behalf
of the Certificateholders, the Master Servicer shall service and administer the
Mortgage Loans in accordance with the terms of this Agreement and shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities. In
connection with such servicing and administration, the Master Servicer shall
have full power and authority, acting alone and/or through Sub-Servicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (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 (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that the Master Servicer shall not take any action that
is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Seller, the Trustee and the Certificateholders under this Agreement. The Master
Servicer shall represent and protect the interests of the Trust Fund in the same
manner as it protects its own interests in mortgage loans in its own portfolio
in any claim, proceeding or litigation regarding a Mortgage Loan, and shall not
make or permit any modification, waiver or amendment of any Mortgage Loan which
would cause REMIC 1 or REMIC 2 to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860F(a) or Section 860G(d) of the Code. The
Master Servicer further is hereby authorized and empowered in its own name or in
the name of a Sub-Servicer, when the Master Servicer or the Sub-Servicer, as the
case may be, believes it is appropriate in its best judgment to register any
Mortgage Loan on the MERS(R) System, or cause the removal from the registration
of any Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of
the Trustee and the Certificateholders or any of them, any and all instruments
of assignment and other comparable instruments with respect to such assignment
or re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns. Any expenses incurred in connection with
the actions described in the preceding sentence shall be borne by the Master
Servicer in accordance with Section 3.16, with no right of reimbursement;
provided, that if, as a result of MERS discontinuing or becoming unable to
continue operations in connection with the MERS(R) System, it becomes necessary
to remove any Mortgage Loan from registration on the MERS(R) System and to
arrange for the assignment of the related Mortgages to the Trustee, then any
related expenses shall be reimbursable to the Master Servicer from the Protected
Accounts. Without limiting the generality of the foregoing, the Master Servicer,
in its own name or in the name of the Seller and the Trustee, is hereby
authorized and empowered by the Seller and the Trustee, when the Master Servicer
believes it appropriate in its reasonable judgment, to execute and deliver, on
behalf of the Trustee, the Seller, the Certificateholders or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Master Servicer shall prepare and deliver
to the Seller and/or the Trustee such documents

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<PAGE>

requiring execution and delivery by either or both of them as are necessary or
appropriate to enable the Master Servicer to service and administer the Mortgage
Loans to the extent that the Master Servicer is not permitted to execute and
deliver such documents pursuant to the preceding sentence.
Upon receipt of such documents, the Seller and/or the Trustee shall execute such
documents and deliver them to the Master Servicer.

     In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the related
Mortgaged Properties, which advances shall be reimbursable in the first instance
from related collections from the related Mortgagors pursuant to Section 3.15,
and further as provided in Section 4.03. The costs incurred by the Master
Servicer, if any, in effecting the timely payments of taxes and assessments on
related Mortgaged Properties and related insurance premiums shall not, for the
purpose of calculating monthly distributions to the Certificateholders, be added
to the Stated Principal Balances of the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.

     The Master Servicer shall follow such practices and procedures as it shall
deem necessary or advisable and as shall be normal and usual in its general
mortgage servicing activities to collect all payments called for under the terms
and provisions of the related Mortgage Loans to the extent such procedures shall
be consistent with this Agreement and the terms and provisions of any related
Insurance Policy. Consistent with the foregoing, the Master Servicer may in its
discretion extend the due dates for payments due on a Mortgage Note for a period
not greater than 180 days; provided, however, that the Master Servicer cannot
extend the maturity of any such Mortgage Loan past the date on which the final
payment is due on the latest maturing Mortgage Loan as of the Cut-off Date. In
the event of any such arrangement, the Master Servicer shall make Monthly
Advances on the related Mortgage Loan in accordance with the provisions of
Section 6.05 during the scheduled period in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements. The Master Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.

     Section 3.02 SUB-SERVICING; ENFORCEMENT OF THE OBLIGATIONS OF
SUB-SERVICERS.

     (a) The Master Servicer may arrange for the subservicing of any Mortgage
Loan by a Sub-Servicer pursuant to a Sub-Servicing Agreement; provided, however,
that such subservicing arrangement and the terms of the related Sub-Servicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder. Unless the
context otherwise requires, references in this Agreement to actions taken or to
be taken by the Master Servicer in servicing the Mortgage Loans include actions
taken or to be taken by a Sub-Servicer on behalf of the Master Servicer.
Notwithstanding the provisions of any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and liable
to the Seller, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in

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<PAGE>

accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the Sub-Servicer and to the
same extent and under the same terms and conditions as if the Master Servicer
alone were servicing and administering the Mortgage Loans. All actions of each
Sub- Servicer performed pursuant to the related Sub-Servicing Agreement shall be
performed as an agent of the Master Servicer with the same force and effect as
if performed directly by the Master Servicer.

     (b) For purposes of this Agreement, the Master Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a related Sub-Servicer regardless of whether
such payments are remitted by the Sub-Servicer to the Master Servicer.

     (c) The Mortgage Loans will initially be subserviced by GreenPoint pursuant
to the Interim Subservicing Agreement attached hereto as Exhibit P. The Seller,
the Trustee and the Master Servicer shall cooperate and use their best efforts
to transfer the primary servicing of the Mortgage Loans from GreenPoint to the
Master Servicer by March 1, 2001.

     Section 3.03. MASTER SERVICER FIDELITY BOND AND MASTER SERVICER ERRORS AND
OMISSIONS INSURANCE POLICY. The Master Servicer shall for so long as it acts as
Master Servicer under this Agreement, obtain and maintain in force (a) a policy
or policies of insurance covering errors and omissions in the performance of its
obligations as the Master Servicer hereunder and (b) a fidelity bond in respect
of its officers, employees and agents. Each such policy or policies and bond
shall, together, comply with the requirements from time to time of Fannie Mae or
Freddie Mac for persons performing servicing for mortgage loans purchased by
Fannie Mae or Freddie Mac. In the event that any such policy or bond ceases to
be in effect, the Master Servicer shall obtain a comparable replacement policy
or bond from an insurer or issuer, meeting the requirements set forth above as
of the date of such replacement.

     Section 3.04 MASTER SERVICER'S FINANCIAL STATEMENTS AND RELATED
INFORMATION. For each year this Agreement is in effect, the Master Servicer
shall submit to the Trustee, each Rating Agency and the Seller a copy of the
Master Servicer's annual unaudited financial statements on or prior to May 31 of
each year, which may be in the form of the consolidated financial statements of
the Master Servicer's corporate parent. Such financial statements shall include
a balance sheet, income statement and statement of retained earnings.

     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 Sub-Servicing Agreement, as applicable. The
Trustee shall furnish the Master Servicer, upon request, with any

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<PAGE>

powers of attorney empowering the Master 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 Sub-
Servicing Agreement and this Agreement, and the Trustee shall execute and
deliver such other documents, as the Master Servicer may request, necessary or
appropriate 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 the servicing standard set forth herein (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
any Sub-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, then upon request of the Trustee, 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 TERMINATION OF SUB-SERVICING AGREEMENTS; SUCCESSOR
SUB-SERVICERS. (a) The Master Servicer shall be entitled to terminate the rights
and obligations of any Sub-Servicer under the applicable Sub-Servicing Agreement
in accordance with the terms and conditions of such Servicing Agreement and
without any limitation by virtue of this Agreement. In such event, the Master
Servicer shall appoint a successor servicer or shall itself (or through an
Affiliate) act as servicer of the related Mortgage Loans. It is understood and
acknowledged by the parties that there will be a period of transition (not to
exceed 90 days) before the servicing transfer is fully effected.

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

     Section 3.07 "DUE ON SALE" CLAUSES; ASSUMPTION AGREEMENTS.

     (a) Except as otherwise provided in this Section, when any property subject
to a Mortgage has been conveyed by the Mortgagor, the Master Servicer shall, to
the extent that it has knowledge of such conveyance, enforce any due-on-sale
clause contained in the related Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any required Primary Mortgage Insurance Policy. Notwithstanding the
foregoing, the Master Servicer is not required to exercise such rights with
respect to a Mortgage Loan if the Person to whom the related Mortgaged Property
has been conveyed or is proposed to be conveyed satisfies the terms and
conditions contained in the Mortgage Note and Mortgage related thereto and the
consent of the mortgagee under such Mortgage Note or Mortgage is not otherwise
so required under such Mortgage Note or Mortgage as a condition to such
transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.07(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be

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<PAGE>

conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, unless prohibited by applicable state law, the Mortgagor remains liable
thereon, provided that the Mortgage Loan shall continue to be covered (if so
covered before the Master Servicer enters such agreement) by the applicable
required Insurance Policies. The Master Servicer, subject to Section 3.07(b), is
also authorized with the prior approval of the insurers under any required
Insurance Policies to enter into a substitution of liability agreement with such
Person, pursuant to which the original Mortgagor is released from liability and
such Person is substituted as Mortgagor and becomes liable under the Mortgage
Note. Notwithstanding the foregoing, the Master Servicer shall not be deemed to
be in default under this Section by reason of any transfer or assumption which
the Master Servicer reasonably believes it is restricted by law from preventing,
for any reason whatsoever.

     (b) Subject to the Master Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.07(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Master Servicer shall prepare
and deliver or cause to be prepared and delivered to the Trustee for signature
and shall direct, in writing, the Trustee to execute the assumption agreement
with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
may be changed. In addition, the substitute Mortgagor and the Mortgaged Property
must be acceptable to the Master Servicer in accordance with its underwriting
standards as then in effect. Together with each such substitution, assumption or
other agreement or instrument delivered to the Trustee for execution by it, the
Master Servicer shall deliver an Officer's Certificate signed by a Servicing
Officer stating that the requirements of this subsection have been met in
connection therewith. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by the Master Servicer for entering into an assumption or substitution
of liability agreement will be retained by the Master Servicer as additional
servicing compensation.

     Section 3.08 RELEASE OF MORTGAGE FILES. (a) Upon payment in full of any
Mortgage Loan or the receipt by the Master Servicer or any Sub-Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Master Servicer or the related Sub- Servicer will immediately
notify the Trustee by delivering two copies (one of which will be returned to
the Master Servicer with the Mortgage File) of a certification signed by a
Servicing Officer 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 (which certification shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Certificate Account have been or will
be so deposited), and shall request delivery to the Master Servicer or a
Servicer, as the case may be, of the Mortgage File. Upon receipt of such

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<PAGE>

certification and request, the Trustee shall promptly, but in no event later
than five Business Days, release the related Mortgage File to the Master
Servicer or a Servicer and execute and deliver to the Master Servicer, without
recourse, the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Security
Instrument (furnished by the Master Servicer), together with the Mortgage Note
with written evidence of cancellation thereon. The Master Servicer is authorized
to cause the removal from the registration on the MERS(R) System of such
Mortgage, if applicable, and to execute and deliver, on behalf of the Trustee
and the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation or of partial or full release. The Master Servicer
is authorized to cause the removal from the registration on the MERS System of
such Mortgage and to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Certificate Account.

     (b) From time to time as is appropriate for the servicing or foreclosure of
any Mortgage Loan or collection under a Required Insurance Policy, the Master
Servicer shall deliver to the Trustee two copies (one of which will be returned
to the Master Servicer with the Mortgage File) of a Request for Release signed
by a Servicing Officer on behalf of the Master Servicer in substantially the
form attached as Exhibit D hereto, or in a mutually agreeable electronic format
which will, in lieu of a signature on its face, originate from a Servicing
Officer. Upon receipt of the Request for Release, the Trustee shall deliver the
Mortgage File to the Master Servicer or Sub-Servicer, as the case may be.

     (c) The Master Servicer shall cause each Mortgage File or any document
therein released pursuant to Subsection 3.08(b) to be returned to the Trustee
when the need therefor no longer exists, unless the related Mortgage Loan has
become a Liquidated Mortgage Loan and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Certificate Account or such Mortgage
File is being used to pursue foreclosure or other legal proceedings. Prior to
return of a Mortgage File or any document to the Trustee, the Master Servicer,
the related Insurer or Sub- Servicer to whom such file or document was delivered
shall retain such file or document in its respective control unless 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, to initiate or pursue legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. If a related Mortgage Loan becomes
a Liquidated Mortgage Loan, the Master Servicer shall deliver the Request for
Release with respect thereto to the Trustee upon deposit of the related
Liquidation Proceeds in the Certificate Account.

     (d) The Trustee shall execute and deliver to the Master Servicer and the
Master Servicer shall forward to the related Sub-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. Together
with such documents or pleadings the Master Servicer or related

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Servicer shall deliver to the Trustee a certificate of a Servicing Officer in
which it requests the Trustee to execute the pleadings or documents. The
certificate shall certify and explain the reasons for which the pleadings or
documents are required. It shall further certify that the Trustee's execution
and delivery of the pleadings or documents will not invalidate any insurance
coverage under the Required Insurance Policies or invalidate or otherwise affect
the lien of the Security Instrument, except for the termination of such a lien
upon completion of the foreclosure or trustee's sale.

     Section 3.09 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER
TO BE HELD FOR TRUSTEE. (a) The Master Servicer shall transmit and each
Sub-Servicer (to the extent required by the related Sub-Servicing Agreement)
shall transmit to the Trustee such documents and instruments coming into the
possession of the Master Servicer or such Sub-Servicer from time to time as are
required by the terms hereof, or in the case of the Sub-Servicers, the
applicable Sub- Servicing Agreement, to be delivered to the Trustee. Any funds
received by the Master Servicer or by a Sub-Servicer in respect of any Mortgage
Loan or which otherwise are collected by the Master Servicer or by a
Sub-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 Protected Account the Master Servicing Fee and other amounts provided
in this Agreement. The Master Servicer shall, (to the extent provided in the
applicable Sub-Servicing Agreement) cause each Sub-Servicer to, provide access
to information and documentation regarding the Mortgage Loans to the Trustee,
its agents and accountants at any time upon reasonable request and during normal
business hours, and to Certificateholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and Corporation
or examiners of any other federal or state banking or insurance regulatory
authority if so required by applicable regulations of the Office of Thrift
Supervision or other regulatory authority, such access to be afforded without
charge but only upon reasonable request in writing and during normal business
hours at the offices of the Master Servicer designated by it. In fulfilling such
a request the Master Servicer shall not be responsible for determining the
sufficiency of such information.

     (b) All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; PROVIDED, HOWEVER, that the Master Servicer
and each Sub- 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 Sub-Servicer under this Agreement or the applicable Sub-Servicing
Agreement.

     Section 3.10 [RESERVED].

     Section 3.11 STANDARD HAZARD AND FLOOD INSURANCE POLICIES. (a) The Master
Servicer shall cause to be maintained for each Mortgage Loan fire and hazard
insurance with extended coverage as is customary in the area where the Mortgaged
Property is located in an amount which is equal to the lesser of (i) the maximum
insurable value of the improvements securing such Mortgage Loan or

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(ii) the greater of (a) the outstanding principal balance of the Mortgage Loan,
and (b) the percentage such that the proceeds thereof shall be sufficient to
prevent the Mortgagor and/or the Mortgagee from becoming a co-insurer. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as being a special flood hazard area that
has federally-mandated flood insurance requirements, the Master Servicer will
cause to be maintained a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration with a generally
acceptable insurance carrier, in an amount representing coverage not less than
the least of (i) the outstanding principal balance of the Mortgage Loan, (ii)
the maximum insurable value of the improvements securing such Mortgage Loan or
(iii) the maximum amount of insurance which is available under the Flood
Disaster Protection Act of 1973, as amended. The Master Servicer shall also
maintain on the REO Property, fire and hazard insurance with extended coverage
in an amount which is at least equal to the maximum insurable value of the
improvements which are a part of such property, liability insurance and, to the
extent required and available under the Flood Disaster Protection Act of 1973,
as amended, flood insurance in an amount as provided above. Any amounts
collected by the Master Servicer under any such policies other than amounts to
be deposited in the Escrow Account and applied to the restoration or repair of
the Mortgaged Property or REO Property, or released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures, shall be
deposited in the Certificate Account, subject to withdrawal pursuant to Section
4.03. It is understood and agreed that no other additional insurance need be
required by the Master Servicer or the Mortgagor or maintained on property
acquired in respect of the Mortgage Loans, other than pursuant to the Fannie Mae
Guide or such applicable state or federal laws and regulations as shall at any
time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee clauses with loss payable to
the Master Servicer and its successors and/or assigns and shall provide for at
least thirty days prior written notice of any cancellation, reduction in the
amount or material change in coverage to the Master Servicer. The Master
Servicer shall not interfere with the Mortgagor's freedom of choice in selecting
either his insurance carrier or agent, provided, however, that the Master
Servicer shall not accept any such insurance policies from insurance companies
unless such companies currently reflect a General Policy Rating in Best's Key
Rating Guide currently acceptable to Fannie Mae and are licensed to do business
in the state wherein the property subject to the policy is located.

     (b) In the event that the Master Servicer shall obtain and maintain a
blanket policy insuring against hazard losses on all of the related Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first sentence of this Section, it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Master Servicer shall, in the event
that there shall not have been maintained on the related Mortgaged Property a
policy complying with the first sentence of this Section, and there shall have
been a loss that would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as Master
Servicer of the Mortgage Loans, the Master Servicer agrees to present, on behalf
of itself, the Seller, and the Trustee for the benefit of the
Certificateholders, claims under any such blanket policy.

     (c) Pursuant to Section 4.01, any amounts collected by the Master Servicer,
or by any Sub-Servicer, under any insurance policies (other than amounts to be
applied to the restoration or

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<PAGE>

repair of the property subject to the related Mortgage or released to the
Mortgagor in accordance with the applicable Sub-Servicing Agreement) shall be
deposited into the Protected Account, subject to withdrawal pursuant to Sections
4.02 and 4.03. Any cost incurred by the Master Servicer or any Sub-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 Sub-Servicer pursuant to Sections 4.02 and 4.03.

     Section 3.12 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The Master
Servicer shall (to the extent provided in the applicable Sub-Servicing
Agreement) cause the related Sub-Servicer to, prepare and present on behalf of
the Trustee and the Certificateholders all claims under the Insurance Policies
and claims for FHA contracts of insurance with respect to the Mortgage Loans,
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 Sub-Servicer and remitted to the Master Servicer) in respect of such
policies, bonds or contracts shall be promptly deposited in the Protected
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).

     Section 3.13 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES. (a)
The Master Servicer shall not take, or permit any Sub-Servicer (to the extent
such action is prohibited under the applicable Sub-Servicing Agreement) to take,
any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of such Master
Servicer or Sub-Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause each Sub-Servicer (to
the extent required under the related Sub- 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
Sub-Servicing Agreement, as applicable. The Master Servicer shall not, and shall
not permit any Sub-Servicer (to the extent required under the related
Sub-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 Sub-Servicing Agreement,
as applicable. The Master Servicer will follow Fannie Mae guidelines with
respect to the waiver of primary mortgage insurance.

     (b) The Master Servicer agrees to present, or to cause each Sub-Servicer
(to the extent required under the related Sub-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, any amounts collected by the Master Servicer or any Sub-Servicer
under any Primary Mortgage Insurance Policies shall be deposited in the
Protected Account, subject to withdrawal pursuant to Sections 4.02 and 4.03.

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<PAGE>

     Section 3.14 TRUSTEE TO RETAIN POSSESSION OF DOCUMENTS. 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 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, such other documents or instruments that constitute portions of
the Mortgage File that come into the possession of the Master Servicer from time
to time.

     Section 3.15 REALIZATION UPON DEFAULTED MORTGAGE LOANS. With respect to any
REO Property, the deed or certificate of sale shall be taken in the name of the
Trustee for the benefit of the Certificateholders, or its nominee, on behalf of
the Certificateholders. The Trustee's name shall be placed on the title to such
REO Property solely as the Trustee hereunder and not in its individual capacity.
The Master Servicer shall ensure that the title to such REO Property references
this Agreement and the Trustee's capacity thereunder.

     The Master Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
related Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
meet the requirements of the insurer under any required Insurance Policy;
provided, however, that the Master Servicer shall not be required to expend its
own funds in connection with any foreclosure or towards the restoration of any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the related Protected Account). The
Master Servicer shall be responsible for all other costs and expenses incurred
by it in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the liquidation proceeds with respect to the related
Mortgaged Property, as provided in the definition of Liquidation Proceeds. If
the Master Servicer has knowledge that a Mortgaged Property which the Master
Servicer is contemplating acquiring in foreclosure or by deed in lieu of
foreclosure is located within a one (1) mile radius of any site listed in the
Expenditure Plan for the Hazardous Substance Clean Up Bond Act of 1984 or other
site with environmental or hazardous waste risks known to the Master Servicer,
the Master Servicer will, prior to acquiring the Mortgaged Property, consider
such risks and only take action in accordance with its established environmental
review procedures.

     The Master Servicer shall, either itself or through an agent selected by
the Master Servicer, and in accordance with the Fannie Mae guidelines, manage,
conserve, protect and operate each REO Property in the same manner that it
manages, conserves, protects and operates other foreclosed property for its own
account, and in the same manner that similar property in the same locality as
the REO Property is managed. Each disposition of REO Property shall be carried
out by the Master Servicer at such price and upon such terms and conditions as
the Master Servicer deems to be in the best interest of the Certificateholders.
Each Disposition of REO Property shall be carried out by the Master Servicer at
such price and upon such terms and conditions as the Master Servicer deems to

                                      -47-

<PAGE>

be in the best interest of the Owner. The proceeds from the sale of the REO
Property shall be promptly deposited in the related Protected Account. As soon
as practical thereafter, the expenses of such sale shall be paid and the Master
Servicer shall reimburse itself for any related Servicing Advances, or Monthly
Advances made pursuant to Section 6.05. The Master Servicer shall cause each REO
Property to be inspected promptly upon the acquisition of title thereto and
shall cause each REO Property to be inspected at least monthly thereafter or
more frequently as may be required by the circumstances. The Master Servicer
shall make or cause the inspector to make a written report of each such
inspection.

     The Master Servicer shall prepare for and deliver to the Trustee a
statement with respect to each related REO Property that has been rented showing
the aggregate rental income received and all expenses incurred in connection
with the management and maintenance of such REO Property at such times as is
necessary to enable the Trustee to comply with the reporting requirements of the
REMIC Provisions. The net monthly rental income, if any, from such REO Property
shall be deposited in the related Protected Account no later than the close of
business on each Determination Date. The Master Servicer shall perform the tax
reporting and withholding required by Sections 1445 and 6050J of the Code with
respect to foreclosures and abandonments, the tax reporting required by Section
6050H of the Code with respect to the receipt of mortgage interest from
individuals and any tax reporting required by Section 6050P of the Code with
respect to the cancellation of indebtedness by certain financial entities, by
preparing such tax and information returns as may be required, in the form
required, and filing the same.

     In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property
prior to three (3) years after its acquisition by the Trust Fund unless the
Trustee shall have been supplied with an Opinion of Counsel to the effect that
the holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of any REMIC hereunder as defined in section 860F of the Code or
cause any REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel). Notwithstanding any other provision of this Agreement, no Mortgaged
Property acquired by the Trust Fund shall be rented (or allowed to continue to
be rented) or otherwise used for the production of income by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or (ii) subject any REMIC hereunder to
the imposition of any federal, state or local income taxes on the income earned
from such Mortgaged Property under Section 860G(c) of the Code or otherwise,
unless the Master Servicer has agreed to indemnify and hold harmless the Trust
Fund with respect to the imposition of any such taxes.

     In the event of default on a Mortgage Loan one or more obligors of which
are not United States Persons, as that term is defined in Section 7701(a)(30) of
the Code, in connection with any foreclosure or acquisition of a deed in lieu of
foreclosure (together, "foreclosure") in respect of such Mortgage Loan, the
Master Servicer will cause compliance with the provisions of Treasury Regulation
Section 1.1445-2(d)(3) (or any successor thereto) necessary to assure that no
withholding

                                      -48-

<PAGE>

tax obligation arises with respect to the proceeds of such foreclosure except to
the extent, if any, that proceeds of such foreclosure are required to be
remitted to the obligors on such Mortgage Loan.

     The decision of the Master Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Master Servicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any REO Properties,
net of reimbursement to the Master Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
applicable unreimbursed Servicing Fees, Monthly Advances and Servicing Advances,
shall be applied to the payment of principal of and interest on the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the related Protected
Account. To the extent the net income received during any calendar month is in
excess of the amount attributable to amortizing principal and accrued interest
at the related Mortgage Rate on the related Mortgage Loan for such calendar
month, such excess shall be considered to be a partial prepayment of principal
Partial Principal Prepayment of the related Mortgage Loan.

     The proceeds from any liquidation of a Mortgage Loan, as well as any income
from an REO Property, will be applied in the following order of priority: first,
to reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees; second, to reimburse the Master Servicer for any
unreimbursed Monthly Advances; third, to accrued and unpaid interest (to the
extent no Monthly Advance has been made for such amount or any such Monthly
Advance has been reimbursed) on the Mortgage Loan or related REO Property, at
the Net Rate to the Due Date occurring in the month in which such amounts are
required to be distributed; and fourth, as a recovery of principal of the
Mortgage Loan.

     Section 3.16 COMPENSATION TO THE MASTER SERVICER. The Master Servicer shall
be entitled either (a) to pay itself the Master Servicing Fee, as reduced
pursuant to Section 6.06, in respect of remittances from the Sub-Servicers prior
to the deposit of such payment in the Protected Account or (b) to withdraw from
the Protected Account, subject to Section 4.02, the Master Servicing Fee, in
each case from amounts on deposit in the Certificate Account as described below.
Servicing compensation in the form of assumption fees, if any, late payment
charges, as collected, if any, or otherwise, shall be retained by the Master
Servicer (or the applicable Sub-Servicer) and shall not be deposited in the
Protected Account. In addition, the Master Servicer will be entitled to retain,
as additional compensation, any interest remitted by a Servicer in connection
with a Principal Prepayment in Full or otherwise in excess of amounts required
to be remitted to the Certificate Account. If the Master Servicer does not
retain or withdraw the Master Servicing Fee from the Protected Account as
provided herein, the Master Servicer shall be entitled to direct the Trustee to
pay the Master Servicing Fee to the Master Servicer by withdrawal from the
Certificate Account to the extent that payments have been received with respect
to the applicable Mortgage Loan. 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. Pursuant to Article IV all income and gain realized from any
investment of funds in the Protected Account and the Certificate Account shall
be for the benefit of the Master Servicer as additional compensation.

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<PAGE>

     The amount of the aggregate Master Servicing Fees payable to the Master
Servicer in respect of any Distribution Date shall be reduced in accordance with
Section 6.06.

     Section 3.17 [RESERVED].

     Section 3.18 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE. (a) The Master
Servicer shall deliver to the Trustee and the Rating Agencies on or before May
31 of each year, commencing on May 31, 2001, 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 Sub-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 3.19 ANNUAL INDEPENDENT ACCOUNTANTS' 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, and if the Master Servicer did
not directly service such Mortgage Loans, the Master Servicer shall cause the
related Sub-Servicer, at their expense shall cause a nationally recognized firm
of independent certified public accountants to furnish a statement to the
Trustee, the Rating Agencies and the Seller on or before May 31 of each year,
commencing on May 31, 2001 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

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<PAGE>

the expense of the Master Servicer if the Master Servicer shall fail to provide
such copies. If such report discloses exceptions that are material, the Master
Servicer shall advise the Trustee whether such exceptions have been or are
susceptible of cure, and will take prompt action to do so.

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<PAGE>

                                   ARTICLE IV

                                    Accounts

     Section 4.01. PROTECTED ACCOUNTS. (a) The Master Servicer shall establish
and maintain a Protected Account and shall enforce the obligation of each
Sub-Servicer to establish and maintain a separate servicing account in
accordance with the applicable Sub-Servicing Agreement complying with the
requirements set forth in this Section 4.01, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within 2 days of receipt all collections of principal and
interest on any Mortgage Loan and with respect to any REO Property received by
the Master Servicer, or a Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, and advances made from the Sub-Servicer's own
funds (less servicing compensation as permitted by Section 3.16, in the case of
the Master Servicer, and by the applicable Sub-Servicing Agreement in the case
of any Sub-Servicer) and all other amounts to be deposited in the related
Protected Account. The Master Servicer is hereby authorized to make withdrawals
from and deposits to the related Protected Account for purposes required or
permitted by this Agreement. All Protected Accounts shall be held in a
Designated Depository Institution and segregated on the books of such
institution or a Rating Agency Eligible Account in the name of the Trustee for
the benefit of Certificateholders.

     Amounts on deposit in a Protected Account may not be commingled with any
other funds. Amounts on deposit in a Protected Account may be invested in
Permitted Investments in the name of the Trustee for the benefit of
Certificateholders, such Permitted Investments to mature, or to be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit into the Certificate 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 Master
Servicer as additional compensation as provided in Section 3.16 of this
Agreement or by the related Sub-Servicer under the applicable Sub-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 Master Servicer or the related Sub-Servicer. The Master Servicer
shall itself, or shall cause the related Sub-Servicer (to the extent provided in
the Sub-Servicing Agreement) to, deposit the amount of any such loss in the
related 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.

     (b) Subject to this Article IV, on or before each Funds Transfer Date, the
Master Servicer shall withdraw from the Protected Accounts and shall immediately
deposit in the Certificate 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):

          (i) Scheduled Payments on the Mortgage Loans received or any related
     portion thereof advanced by the Master Servicer or Sub-Servicers which were
     due on or before the related Due Date, net of the amount thereof comprising
     the Master Servicing Fee;

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<PAGE>

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

          (iii) Partial prepayments of principal received by the Master Servicer
     or related Sub-Servicers for such Mortgage Loans in the related Prepayment
     Period.

     (c) Withdrawals may be made from a Protected Account only to make
remittances as provided in Subsections 4.01(b) or 4.03(c); to reimburse the
Master Servicer or a Sub-Servicer for Monthly Advances which have been recovered
by subsequent collection from the related Mortgagor; to remove amounts deposited
in error; to remove fees, charges or other such amounts deposited on a temporary
basis; to withdraw investment earnings on amounts in the Protected Account as
described in Section 3.16; or to clear and terminate the account at the
termination of this Agreement in accordance with Section 10.01. As provided in
Section 4.02(b) certain amounts otherwise due to the Master Servicer and the
Sub-Servicers may be retained by them and need not be deposited in the
Certificate Account.

     (d) The Master Servicer shall promptly deliver to the Trustee, upon
request, a statement from the institution at which each Protected Account is
maintained showing deposits and withdrawals during the prior month.

     Section 4.02. CERTIFICATE ACCOUNT. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Certificate Account as a segregated trust account or accounts. The Trustee
will deposit in the Certificate Account, as received, the following amounts:

          (i) Any amounts withdrawn from a Protected Account pursuant to
     Subsection 4.01(b);

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

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

          (iv) The Repurchase Price with respect to any Mortgage Loans purchased
     by EMC or GreenPoint pursuant to Sections 2.02 or 2.03, any amounts which
     are to be treated pursuant to Section 2.05 as the payment of such a
     Repurchase Price, 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; and

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

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

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<PAGE>

provisions of this Agreement, subject to the right of the Master Servicer to
require the Trustee to make withdrawals therefrom as provided herein. The
foregoing requirements for crediting the Certificate 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 4.03(a)(i), (ii), (iii), (iv), (vi), (vii), (ix) and
(xiv) need not be credited by the Master Servicer or the related Sub-Servicer to
the Certificate Account and may be retained by the Master Servicer or the
related Sub-Servicer as servicing compensation. In the event that the Master
Servicer shall deposit or cause to be deposited to the Certificate 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 Certificate Account shall constitute a trust account of the Trust
Fund segregated on the books of the Trustee and held by the Trustee in trust in
its Corporate Trust Office and the Certificate Account and the funds deposited
therein shall not be subject to, and shall be protected from, all claims, liens,
and encumbrances of any creditors or depositors of the Trustee or the Master
Servicer (whether made directly, or indirectly through a liquidator or receiver
of the Trustee or the Master Servicer). The amount at any time credited to the
Certificate Account shall be (i) fully insured by the FDIC, BIF or SAIF to the
maximum coverage provided thereby, (ii) invested, in the name of the Trustee, or
its nominee, for the benefit of the Certificateholders, in Permitted
Investments, or (iii) from the maturity of any Permitted Investment on the
Business Day prior to a Distribution Date through the distribution of such funds
on such Distribution Date or at such other time and in such amount as, in the
judgment of the Trustee, cannot reasonably be invested in accordance with items
(i) or (ii) of this sentence, held by the Trustee uninvested in such Certificate
Account. All Permitted Investments shall be payable on demand or 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 (except that any investment in the institution
with which the Certificate Account is maintained may mature on such Distribution
Date). The Trustee shall be entitled to all investment earnings on amounts in
the Certificate Account. With respect to the Certificate Account and the funds
deposited therein, the Trustee shall take such action as may be necessary to
ensure that the Certificateholders shall be entitled to the priorities afforded
to such a trust account (in addition to a claim against the estate of the
Trustee) as provided by 12 U.S.C. ss. 92a(e), if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.

     Section 4.03. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE CERTIFICATE
ACCOUNT. (a) The Trustee will, from time to time on demand of the Master
Servicer, make or cause to be made such withdrawals or transfers from the
Certificate Account as the Master Servicer has designated for such transfer or
withdrawal as specified in a certificate signed by a Servicing Officer (upon
which the Trustee may conclusively rely) for the following purposes (limited in
the case of amounts due the Master Servicer to those not withdrawn from the
Protected Account in accordance with the terms of this Agreement):

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<PAGE>

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

          (ii) to reimburse the Master Servicer or any Sub-Servicer from
     Insurance Proceeds or Liquidation Proceeds relating to a particular
     Mortgage Loan for amounts expended by the Master Servicer or such
     Sub-Servicer pursuant to Section 3.15 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 Sub-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 Sub-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 Sub-Servicer (payment to any
     Sub-Servicer to be subject to prior payment to the Master Servicer of an
     amount equal to the Master Servicing Fee), as appropriate, from Liquidation
     Proceeds or Insurance Proceeds received in connection with the liquidation
     of any Mortgage Loan, the amount which it or such Sub- 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 Sub-Servicer (payment to any
     Sub-Servicer to be subject to prior payment to the Master Servicer of the
     portion of the Master Servicing Fee which the Master Servicer is entitled
     to retain) from the Repurchase Price for any Mortgage Loan, the amount
     which it or such Sub-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 Sub-Servicer for advances
     of funds pursuant to Sections 3.15, the right to reimbursement pursuant to
     this subclause being limited to amounts received on the related Mortgage
     Loan (including, for this purpose, the Repurchase Price therefor, Insurance
     Proceeds and Liquidation Proceeds) which represent late recoveries of the
     payments for which such advances were made;

                                      -55-

<PAGE>

          (vii) to reimburse the Master Servicer or any Sub-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 3.16;

          (ix) to reimburse the Master Servicer for expenses, costs and
     liabilities incurred by and reimbursable to it pursuant to Sections 7.04(c)
     and (d) and 11.03;

          (x) to pay to the Master Servicer, as additional servicing
     compensation, any Excess Liquidation Proceeds;

          (xi) to clear and terminate the Certificate Account pursuant to
     Section 10.01;

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

          (xiii) to remove amounts deposited in error; and

          (xiv) to withdraw investment earnings on amounts in the Certificate
     Account as described in Section 4.02(c).

     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 Certificate 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 Certificate Account under Section
4.02(b).

     (b) On each Distribution Date, the Trustee shall pay the amount
distributable to the Holders of the Certificates payable in accordance with
Section 6.01 from the funds in the Certificate Account.

     (c) Notwithstanding the provisions of this Section 4.03, the Master
Servicer may, but is not required to, allow the Sub-Servicers to deduct from
amounts received by them or from the related Protected Account, prior to deposit
in the Certificate Account, any portion to which such Sub- Servicers are
entitled as servicing compensation (including income on Permitted Investments)
or reimbursement of any reimbursable advances made by such Sub-Servicers.

     (d) On an ongoing basis, the Trustee shall withdraw from the Certificate
Account any expenses reimbursable to the Trustee pursuant to Sections 8.01 and
9.05.

                                      -56-

<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 January 29, 2001 (the
"Depository Agreement"). Except for the Residual Certificates, the Private
Certificates and the Individual Certificates and as provided in Subsection
5.01(b), the Certificates shall at all times remain registered in the name of
the Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to a successor to the
Depository; (ii) ownership and transfers of registration of such Certificates on
the books of the Depository shall be governed by applicable rules established by
the Depository; (iii) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (iv) the Trustee shall
deal with the Depository as representative of such Certificate Owners of the
respective Class of Certificates for purposes of exercising the rights of
Certificateholders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (v) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.

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

     All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.

     (b) If (i)(A) the Seller advises the Trustee in writing that the Depository
is no longer willing or able to properly discharge its responsibilities as
Depository and (B) the Trustee or the Seller is unable to locate a qualified
successor within 30 days or (ii) the Seller at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall request that the Depository notify all Certificate
Owners of the occurrence of any such event and of the availability of
definitive, fully registered Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. None of the Master
Servicer, 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) REMIC 1 and REMIC 2 will be evidenced by the Certificates (other than
the Class R Certificates) ("REMIC Regular Certificates") which are hereby
designated as the "regular interests" in REMIC 1 and REMIC 2 and the Class R-1
Interest which is hereby designated as the

                                      -57-

<PAGE>

single "residual interest" in REMIC 1 and the Class R-2 Interest which is hereby
designated as the single "residual interest" in REMIC 2. Any amounts with
respect to the Mortgage Loans payable to the Certificates other than the
Residual Certificates shall be payable to the REMIC Regular Certificates.

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

     DESIGNATION        INITIAL PRINCIPAL AMOUNT       PASS-THROUGH RATE
     -----------        ------------------------       -----------------
         A-1              $  94,275,000.00                7.750%(1)
         A-2              $  66,974,000.00                7.625%(1)
         M-1              $  3,422,000.00                 7.070%(1)
         M-2              $  2,994,000.00                 7.520%(1)
           B              $  3,422,000.00                 8.060%(1)
           C                 N/A                            N/A(2)
           R                 N/A                             N/A

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

(1)  Subject to (i) the Net WAC Cap Rate and (ii) an increase of 0.50% per annum
     on each Distribution Date after the first possible Optional Termination
     Date.
(2)  A per annum rate equal to the percentage equivalent of a fraction, the
     numerator of which is (x) the sum of the amounts calculated pursuant to
     clauses (A) through (G) below, and the denominator of which is (y) the
     aggregate of the Uncertificated Principal Balances of REMIC 1 Regular
     Interest LT1A, REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest
     LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest LT1E, REMIC 1
     Regular Interest LT1F and REMIC 1 Regular Interest LT1G. For purposes of
     calculating the Pass-Through Rate for the Class C Certificates, the
     numerator is equal to the sum of the following components:

          (A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A;

          (B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B;

          (C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1C minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1C;

          (D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1D minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1D;

                                      -58-

<PAGE>

          (E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1E minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1E;

          (F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1F minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1F; and

          (G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1G minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1G.

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

     (f) The Certificates shall be substantially in the forms set forth in
Exhibits A-1, A-2, A-3, A-4, A-5 and A-6. 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. The Class C Certificates will be issued in minimum
denominations of $10,000 Initial Current Principal Amount and integral multiples
of $1 in excess thereof, except that one Certificate of each such Class may be
issued in a different amount so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Current Principal Amount
of such Class on the Closing Date. The Class R Certificates will each be
issuable in minimum denominations of any Percentage Interest representing 20.00%
and multiples of 0.01% in excess thereof. Each Class of

                                      -59-

<PAGE>

Global Certificates, if any, shall be issued in fully registered form in minimum
dollar denominations of $50,000 and integral multiples of $1.00 in excess
thereof, except that one Certificate of each Class may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign (i) in the case of each Class of Offered Certificates, the
Certificate in the entire Current Principal Amount of the respective Class and
(ii) in the case of each Class of Private Certificates, Individual Certificates
all in an aggregate principal amount that shall equal the Current Principal
Amount of each such respective Class on the Closing Date. The Certificates
referred to in clause (i) and if at any time there are to be Global
Certificates, the Global Certificates shall be delivered by the Seller to the
Depository or pursuant to the Depository's instructions, shall be delivered by
the Seller on behalf of the Depository to and deposited with the DTC Custodian.
The Trustee shall sign the Certificates by facsimile or manual signature and
countersign them by manual signature on behalf of the Trustee by one or more
authorized signatories, each of whom shall be Responsible Officers of the
Trustee or its agent. A Certificate bearing the manual and facsimile signatures
of individuals who were the authorized signatories of the Trustee or its agent
at the time of issuance shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.

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

     (i) The Closing Date is hereby designated as the "startup" day of REMIC 1
and REMIC 2 within the meaning of Section 860G(a)(9) of the Code.

     (j) For federal income tax purposes, REMIC 1 and REMIC 2 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 REMIC 1 and REMIC 2 to
elect to be treated as a real estate mortgage investment conduit 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 Assumed Final Distribution Date for distributions is February 25,
2031. The Assumed Final Distribution Date in the case of all Classes of
Certificates is the Distribution Date in the month following the latest
scheduled maturity of all the Mortgage Loans.

     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.

                                      -60-

<PAGE>

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

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

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

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

                                      -61-

<PAGE>

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

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

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

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

          (ii) A holder of an Individual Certificate or Certificates of a Class
     may exchange such Certificate or Certificates for a beneficial interest in
     the Global Certificate of such Class 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 issue a comparable Global Certificate.

          (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 cancel the Global Certificate
     and issue a comparable Individual Certificate.

     (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.

                                      -62-

<PAGE>

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

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

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

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

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

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

                                      -63-

<PAGE>

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

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

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

     Section 5.04. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Seller, the Master Servicer or the
Trustee and any agent of the Seller, the Master Servicer 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. None of the Master Servicer, the
Seller, the Trustee nor any agent of the Master Servicer, 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 fifth Business Day preceding such Record Date.

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<PAGE>

     Section 5.05. TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES.(a) Residual
Certificates, or interests therein, may not be transferred without the prior
express written consent of the Tax Matters Person and the Seller obtained by the
proposed transferee. 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 as provided in
Subsection 5.05(b).

     (b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Seller an affidavit in the form attached
hereto as Exhibit E stating, among other things, that as of the date of such
transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any
person who is not a Permitted Transferee. The Tax Matters Person shall not
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made in the affidavit issued pursuant to the preceding sentence is
not true. Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer, sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Tax Matters Person or the Seller shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Subsection 5.05(b) or for making payments due on such
Residual Certificate to the purported Holder thereof or taking any other action
with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, the Trustee and the Seller, as
applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that was
in fact not a permitted transferee under this Subsection 5.05(b) at the time it
became a Holder all payments made on such Residual Certificate. Each Holder of a
Residual Certificate, by acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this Subsection 5.05(b) and to any amendment
of this Agreement deemed necessary (whether as a result of new legislation or
otherwise) by counsel of the Tax Matters Person or the Seller to ensure that the
Residual Certificates are not transferred to any Person who is not a Permitted
Transferee and that any transfer of such Residual Certificates will not cause
the imposition of a tax upon the Trust or cause REMIC 1 or REMIC 2 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 Trustee to act as its agent with respect
to all matters concerning the tax

                                      -65-

<PAGE>

obligations of the Trust, other than those matters regarding transfer
restrictions contained in this Section 5.05.

     Section 5.06. RESTRICTIONS ON TRANSFERABILITY OF PRIVATE CERTIFICATES. (a)
No offer, sale, transfer or other disposition (including pledge) of a Private
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-1 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 a Physical
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
a Private Certificate to a transferee other than a QIB, the Trustee may require
an Opinion of Counsel that such transaction is exempt from the registration
requirements of the Securities Act. The cost of such opinion shall not be an
expense of the Trustee or the Trust Fund.

     (b) Each Class of Private Certificates shall bear a Securities Legend.

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

                                      -66-

<PAGE>

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

     (c) 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 from and against
any and all liabilities, claims, costs or expenses incurred by the Trustee as a
result of such attempted or purported transfer.

     Section 5.08. RULE 144A INFORMATION. For so long as any Private
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. The Master
Servicer shall cooperate with the Seller and furnish the Seller such information
in the Master Servicer's possession as the Seller may reasonably request.

                                      -67-

<PAGE>

                                   ARTICLE VI

                         Payments to Certificateholders

     Section 6.01. DISTRIBUTIONS ON THE CERTIFICATES. (a) On each Distribution
Date, the Trustee will withdraw from the Certificate Account and pay to itself
the Trustee Fee for that Distribution Date. In addition, the Trustee will
withdraw from the Certificate Account the Interest Funds and Principal Funds for
such Distribution Date and apply such amounts as follows:

     FIRST, to pay accrued and unpaid interest on the Offered Certificates, in
the following order of priority:

     (i)  From Interest Funds, to the Class A-1 Certificates and Class A-2
          Certificates, pro rata, the Current Interest and any Interest Carry
          Forward Amount for such Class;

     (ii) From remaining Interest Funds, to the Class M-1 Certificates, the
          Class M-2 Certificates and the Class B Certificates, sequentially, in
          that order, the Current Interest and any Interest Carry Forward Amount
          for each such Class;

     (iii) Any Excess Spread to the extent necessary to meet a level of
          overcollateralization equal to the Specified Overcollateralization
          Amount will be the Extra Principal Distribution Amount and will be
          included as part of the Principal Distribution Amount; and

     (iv) Any Remaining Excess Spread will be added to any Excess
          Overcollateralization Amount and will be applied as Excess Cashflow
          pursuant to clauses THIRD through EIGHTH below.

     SECOND, to pay as principal on the Offered Certificates, in the following
order of priority:

     (A)  For each Distribution Date (i) prior to the Stepdown Date or (ii) on
          which a Trigger Event is in effect:

          (1)  To the Class A-1 Certificates and Class A-2 Certificates, pro
               rata, based on the Current Principal Amounts thereof, the
               Principal Distribution Amount, until the Current Principal
               Amounts of the Class A-1 Certificates and Class A-2 Certificates
               have been reduced to zero; and

          (2)  To the Class M-1, Class M-2 and Class B Certificates, in that
               order, any remaining Principal Distribution Amount, in each case
               until the Current Principal Amount thereof is reduced to zero;

     (B) For each Distribution Date on or after the Stepdown Date, so long as a
Trigger Event is not in effect:

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<PAGE>

          (1)  To the Class A-1 Certificates and Class A-2 Certificates, pro
               rata, based on the Current Principal Amounts thereof, from the
               Principal Distribution Amount, the Class A Principal Distribution
               Amount, until the Current Principal Amounts of the Class A-1
               Certificates and Class A-2 Certificates have been reduced to
               zero;

          (2)  To the Class M-1 Certificates, from any remaining Principal
               Distribution Amount, the Class M-1 Principal Distribution Amount,
               until the Current Principal Amount thereof is reduced to zero;

          (3)  To the Class M-2 Certificates, from any remaining Principal
               Distribution Amount, the Class M-2 Principal Distribution Amount,
               until the Current Principal Amount thereof is reduced to zero;

          (4)  To the Class B Certificates, from any remaining Principal
               Distribution Amount, the Class B Principal Distribution Amount,
               until the Current Principal Amount thereof is reduced to zero;

     THIRD, to the Class A-1 Certificates and Class A-2 Certificates as follows:
from any remaining Excess Cashflow, pro rata, an amount equal to any Unpaid
Realized Losses for such Classes for such Distribution Date;

     FOURTH, from any remaining Excess Cashflow, to the Class M-1 Certificates
an amount equal to any Unpaid Realized Losses for such Class for such
Distribution Date;

     FIFTH, from any remaining Excess Cashflow, to the Class M-2 Certificates
any amount equal to Unpaid Realized Losses for such Class for such Distribution
Date;

     SIXTH, from any remaining Excess Cashflow, to the Class B Certificates any
amount equal to Unpaid Realized Losses for such Class for such Distribution
Date;

     SEVENTH, from any remaining Excess Cashflow, to the Holders of the Class C
Certificates, interest equal to the Monthly Interest Distributable Amount for
such Class and principal equal to any remaining Overcollateralization Release
Amount for such Distribution Date; and

     EIGHTH, any remaining amounts to the Class R Certificates (in respect of
the appropriate Residual Interest).

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

     (c) 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.

                                      -69-

<PAGE>

     (d) The expenses and fees of the Trust shall be paid by REMIC 1 and REMIC
2, to the extent that such expenses relate to the assets of REMIC 1 and REMIC 2.

     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) On each Distribution Date, the principal portion of Realized Losses on
the Mortgage Loans which suffered Realized Losses during the related Prepayment
Period will be allocated as follows: first, to the overcollateralization, in
reduction of the amount thereof, until the aggregate Scheduled Principal Balance
of the Mortgage Loans is equal to the aggregate Current Principal Amount of the
Offered Certificates, second to the Class B, Class M-2 and Class M-1
Certificates, in that order, in each case until the Current Principal Amount
thereof has been reduced to zero; and third, to the Class A-1 Certificates and
Class A-2 Certificates on a pro rata basis, until the Current Principal Amounts
of such Classes have been reduced to zero.

     (c) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class on a pro rata basis 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.

     (d) 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.

     (e) The interest portion of any Realized Losses with respect to the
Mortgage Loans will not be allocated among any Certificates, but will reduce the
amount of Interest Funds on the related Distribution Date. As a result of the
subordination of the Subordinate Certificates, in right of distribution, such
Realized Losses, to the extent not covered by the Net Monthly Excess Cash Flow,
will be borne first by the Subordinate Certificates in reverse order of their
seniority.

     Section 6.03. PAYMENTS. (a) On each Distribution Date, other than the final
Distribution Date, the Trustee shall distribute to each Certificateholder of
record on the directly preceding Record Date the Certificateholder's PRO RATA
share of its Class (based on the aggregate Fractional Undivided Interest
represented by such Holder's Certificates) of all amounts required to be
distributed on such Distribution Date to such Class. The Trustee shall calculate
the amount to be distributed to each Class and, based on such amounts, the
Trustee shall determine the amount to be distributed to each Certificateholder.
All of the Trustee's calculations of payments shall be based solely on
information provided to the Trustee by the Master Servicer as set forth in
Section 6.08. The Trustee shall not be required to confirm, verify or recompute
any such information but shall be entitled to rely conclusively on such
information.

     (b) Payment of the above amounts to each Certificateholder shall be made
(i) by check mailed to each Certificateholder entitled thereto at the address
appearing in the Certificate Register or (ii) upon receipt by the Trustee on or
before the fifth Business Day preceding the Record Date of written instructions
from a Certificateholder by wire transfer to a United States dollar account

                                      -70-

<PAGE>

maintained by the payee at any United States depository institution with
appropriate facilities for receiving such a wire transfer; PROVIDED, HOWEVER,
that the final payment in respect of each Class of Certificates will be made
only upon presentation and surrender of such respective Certificates at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final payment.

     Section 6.04. STATEMENTS TO CERTIFICATEHOLDERS. (a) Concurrently with each
distribution to Certificateholders, the Trustee shall make available to each
Certificateholder, the Seller and the Rating Agencies, a statement setting forth
the following information, expressed with respect to clauses (i) through (vi) in
the aggregate and as a Fractional Undivided Interest representing an initial
Current Principal Amount of $1,000:

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

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

          (iii) the aggregate amount of interest accrued at the related
     Pass-Through Rate with respect to each Class of Certificates 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 (other than
     the Class R Certificates) with respect to such Distribution Date and the
     Net WAC Cap Rate for such Distribution Date;

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

          (viii) the amount of any Monthly Advances, Compensating Interest
     Payments and outstanding unreimbursed advances by the Master Servicer or
     the related Sub-Servicers included in such distribution;

          (ix) the amount of any Realized Losses during the related Prepayment
     Period and cumulatively since the Cut-off Date;

          (x) 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

                                      -71-

<PAGE>

     number and principal balance of Mortgage Loans purchased or substituted for
     during the relevant period and cumulatively since the Cut-off Date;

          (xi) the number of Mortgage Loans remaining in the Trust Fund as of
     the end of the related Due Period;

          (xii) information regarding any Mortgage Loan delinquencies as of the
     end of the related Due Period, including the aggregate number, aggregate
     Outstanding Principal Balance delinquent one month, two months and three
     months or more;

          (xiii) 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;

          (xiv) 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;

          (xv) 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; PROVIDED THAT, in the
     event that such information is not available to the Master Servicer and the
     Trustee on the Distribution Date, such information shall be furnished
     promptly after it becomes available;

          (xvi) 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;

          (xvii) the Interest Funds and Principal Funds for such Distribution
     Date;

          (xviii) the Excess Spread for such Distribution Date; and

          (xix) if such Distribution Date is after the Stepdown Date, whether or
     not a Trigger Event is in effect.

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

     The Trustee may make available each month, to any interested party, the
monthly statement to Certificateholders via the Trustee's website located at
"www.ctslink.com." Assistance in using the website can be obtained by calling
the Trustee's customer service desk at (301) 815-6600. Parties that are unable
to use the above distribution option are entitled to have a paper copy mailed to
them via first class mail by calling the customer service desk and indicating
such. The Trustee shall have the right to change the way such reports are
distributed in order to make such distribution more convenient and/or more
accessible to the parties, and the Trustee shall provide timely and adequate
notification to all parties regarding any such change.

                                      -72-

<PAGE>

     (b) By April 30 of each year beginning in 2002, the Trustee will furnish to
the extent required by law or upon request a report to each Holder of the
Certificates of record at any time during the prior calendar year as to the
aggregate of amounts reported pursuant to subclauses (a)(ii) and (a)(v) above
with respect to the Certificates, plus information with respect to the amount of
servicing compensation and such other customary information as the Trustee may
determine to be necessary and/or to be required by the Internal Revenue Service
or by a federal or state law or rules or regulations to enable such Holders to
prepare their tax returns for such calendar year. Such obligations shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to the requirements of the
Code.

     The Master Servicer shall supply to the Trustee in a timely manner the
information required for the reports described above.

     Section 6.05. MONTHLY ADVANCES. If the Scheduled Payment on an Outstanding
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 no required advance has
been made by the related Sub-Servicer), the Master Servicer will deposit in the
Certificate Account not later than the Funds Transfer Date immediately preceding
the related Distribution Date an amount equal to such deficiency, net of the
Master Servicing Fee for such Mortgage Loan except to the extent the Master
Servicer determines any such advance to be nonrecoverable from Liquidation
Proceeds, Insurance Proceeds or future payments on the Mortgage Loan for which
such Monthly Advance was made. The Master Servicer's obligation to make the
Monthly Advances with respect to unpaid Balloon Payments for which no required
advance is made by the related Sub-Servicer is limited to the amount of the
related Scheduled Payment due immediately prior to such Balloon Payment. If
applicable, on the fifth Business Day preceding each Distribution Date, the
Master Servicer shall present an Officer's Certificate to the Trustee (i)
stating that the Master Servicer elects not to make a Monthly Advance in a
stated amount and (ii) detailing the reason it deems the advance to be
nonrecoverable.

     Section 6.06. COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Certificate Account not later than each Funds Transfer Date an
amount equal to the lesser of (i) the aggregate amounts determined pursuant to
subclauses (a) and (b) of the definition of Interest Shortfall as calculated
with respect to Mortgage Loans for the related Distribution Date and (ii) the
Master Servicing Fee for such Distribution Date (such amount, the "Compensating
Interest Payment"), but only to the extent a Compensating Interest Payment was
required to be made, and was not so made, by the related Sub-Servicer pursuant
to the related Sub-Servicing Agreement. The Master Servicer shall not be
entitled to any reimbursement of any Compensating Interest Payment.

     Section 6.07. REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED
PROPERTY. Each year the Master Servicer shall report or cause to be reported by
the related Sub-Servicer to the Internal Revenue Service foreclosures and
abandonments of any Mortgaged Property as required by Section 6050J of the Code.

     Section 6.08. DISTRIBUTION OF REPORTS TO THE TRUSTEE. Prior to the close of
business on the Business Day next succeeding each Determination Date, the
Servicer shall furnish a report (the "Remittance Report") to the Trustee in a
mutually agreed upon form of an electromagnetic tape or disk and hard copy. The
Remittance Report and any information supplemental thereto shall include

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<PAGE>

such information with respect to the Mortgage Loans that is required by the
Trustee for purposes of making the calculations described in Section 6.01 and
preparing the statement described in Section 6.04.

     Section 6.09. DISTRIBUTIONS ON THE REMIC REGULAR INTERESTS.

     (a) On each Distribution Date, the Trustee shall cause the following
amounts, in the following order of priority, to be distributed by REMIC 1 to
REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Certificate Account and distributed to the Holders of the Class R Certificates
(in respect of the Class R-1 Interest), as the case may be:

          (i) first, to the extent of Interest Funds, to the Holders of REMIC 1
     Regular Interest LT1A, REMIC 1 Regular Interest LT1B, REMIC 1 Regular
     Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest
     LT1E, REMIC 1 Regular Interest LT1F, and REMIC 1 Regular Interest LT1G, PRO
     RATA, in an amount equal to (A) the Uncertificated Accrued Interest for
     such Distribution Date, plus (B) any amounts in respect thereof remaining
     unpaid from previous Distribution Dates. Amounts payable as Uncertificated
     Accrued Interest in respect of REMIC 1 Regular Interest LT1G shall be
     reduced when the REMIC 1 Overcollateralized Amount is less than the REMIC 1
     Specified Overcollateralization Amount, by the lesser of (x) the amount of
     such difference and (y) the Maximum LT1G Uncertificated Accrued Interest
     Deferral Amount, and such amount will be payable to the Holders of REMIC 1
     Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular
     Interest LT1D, REMIC 1 Regular Interest LT1E and REMIC 1 Regular Interest
     LT1F in the same proportion as the Extra Principal Distribution Amount is
     allocated to the Corresponding Certificates;

          (ii) second, to the Holders of REMIC 1 Regular Interests, in an amount
     equal to the Principal Funds for such Distribution Date, allocated as
     follows:

               (a) to the Holders of REMIC 1 Regular Interest LT1A, 98.00% of
          such remainder, until the Uncertificated Principal Balance of such
          Uncertificated REMIC 1 Regular Interest is reduced to zero;

               (b) to the Holders of REMIC 1 Regular Interest LT1B, REMIC 1
          Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular
          Interest LT1E, REMIC 1 Regular Interest LT1F and REMIC 1 Regular
          Interest LT1G, 1.00% of such remainder, in the same proportion as
          principal payments are allocated to the Corresponding Certificates,
          until the Uncertificated Principal Balances of such REMIC 1 Regular
          Interests are reduced to zero;

               (c) to the Holders of REMIC 1 Regular Interest LT1G, 1.00% of
          such remainder, until the Uncertificated Principal Balance of such
          REMIC 1 Regular Interest is reduced to zero; then

               (d) any remaining amount to the Holders of the Class R
          Certificates (in respect of the Class R-1 Interest);

                                      -74-

<PAGE>

provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to an Overcollateralization Release Amount shall be allocated to
Holders of REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1G,
respectively.

     (b) All Net Interest Shortfalls and the interest portion of Realized Losses
shall each be allocated by the Trustee on each Distribution Date to the
following REMIC 1 Regular Interests in the specified percentages, as follows: to
Uncertificated Accrued Interest payable to the REMIC 1 Regular Interest LT1A and
REMIC 1 Regular Interest LT1G up to an aggregate amount equal to the REMIC 1
Interest Loss Allocation Amount, 98% and 2%, respectively. The principal portion
of Realized Losses shall be allocated by the Trustee on each Distribution Date
to the following REMIC 1 Regular Interests in the specified percentages, as
follows: first, to the Uncertificated Principal Balances of the REMIC 1 Regular
Interest LT1A and REMIC 1 Regular Interest LT1G up to an aggregate amount equal
to the REMIC 1 Principal Loss Allocation Amount, 98% and 2%, respectively;
second, to the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1A, REMIC 1 Regular Interest LT1F and REMIC 1 Regular Interest LT1G up to an
aggregate amount equal to the REMIC 1 Principal Loss Allocation Amount, 98%, 1%
and 1% respectively; third, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1A, REMIC 1 Regular Interest LT1E and REMIC 1 Regular
Interest LT1G up to an aggregate amount equal to the REMIC 1 Principal Loss
Allocation Amount, 98%, 1% and 1%, respectively; fourth, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest
LT1D and REMIC 1 Regular Interest LT1G up to an aggregate amount equal to the
REMIC 1 Principal Loss Allocation Amount, 98%, 1% and 1%, respectively; fifth,
to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1A, REMIC
1 Regular Interest LT1C and REMIC 1 Regular Interest LT1G up to an aggregate
amount equal to the REMIC 1 Principal Loss Allocation Amount, 98%, 1% and 1%,
respectively and sixth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1A, REMIC 1 Regular Interest LT1B and REMIC 1 Regular
Interest LT1G up to an aggregate amount equal to the REMIC 1 Principal Loss
Allocation Amount, 98%, 1% and 1%, respectively.

                                      -75-

<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. (a) The Master Servicer
agrees to indemnify the Indemnified Persons for, and to hold them harmless
against, any loss, liability or expense incurred on their part, arising out of,
or in connection with, this Agreement, including the costs and expenses
(including reasonable legal fees and expenses) of defending themselves against
(i) any 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)
and (ii) any loss, liability or expense 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 that with respect to any such claim, 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 knowledge thereof.

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

     Section 7.04. LIMITATION 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

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<PAGE>

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 and any director, officer, employee or agent
of the Master Servicer shall be indemnified by the Trust and held harmless
thereby against any loss, liability or expense incurred in connection with any
legal proceedings relating to this Agreement or the Certificates (including
reasonable legal fees and disbursements of counsel), other than (i) any 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) and (ii) any
loss, liability or expense 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.

          (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 Certificate Account as provided
by Subsection 4.03(a). Any such indemnification or reimbursement to the Master
Servicer which is not specifically related to a Loan Group shall be charged
against the sub-accounts of the Certificate Account PRO RATA based upon the
respective outstanding principal amounts of the Mortgage Loans in each of the
Loan Groups. Nothing in this Subsection 7.04(d) shall affect the Master
Servicer's obligation to supervise, or to take such actions as are necessary to
ensure, the servicing and administration of the Mortgage Loans pursuant to
Subsection 3.01(a).

          (e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.

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

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<PAGE>

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, the Trustee may make such arrangements for the compensation of such
successor master servicer out of payments on the Mortgage Loans as the Trustee
and such successor master servicer shall agree.

     In connection with the termination or resignation of the Master Servicer,
either (i) the successor Master Servicer, including the Trustee if the Trustee
is acting as successor Master Servicer, shall represent and warrant that it is a
member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, in which case the
predecessor Master Servicer shall cooperate with the successor Master Servicer
in causing MERS to revise its records to reflect the transfer of servicing to
the successor Master Servicer as necessary under MERS' rules and regulations, or
(ii) the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Trustee and to execute
and deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor Master Servicer.
The predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The predecessor Master Servicer
shall bear any and all fees of MERS, costs of preparing any assignments of
Mortgage, and fees and costs of filing any assignments of Mortgage that may be
required under this subsection.

     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 their
entirety as Master Servicer under this Agreement; 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); (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; and
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee an Officer's Certificate and an Opinion of Independent
Counsel, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.

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<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
     Certificate Account any amount so required to be deposited pursuant to this
     Agreement, and such failure continues unremedied for a period of two
     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 covenants and agreements set forth in the Certificates or
     this Agreement to be performed by it, which covenants and agreements
     materially affect the rights of Certificateholders, and such failure
     continues unremedied for a period of 60 days after the date on which
     written notice of such failure, properly requiring the same to be remedied,
     shall have been given to the Master Servicer by the Trustee or to the
     Master Servicer and the Trustee by the Holders of Certificates evidencing
     Fractional Undivided Interests aggregating not less than 25% of the Trust
     Fund; or

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

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

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

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<PAGE>

In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, 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 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 Trustee shall be
entitled to be reimbursed from the Master Servicer (or by the Trust Fund if the
Master Servicer is unable to fulfill its obligations hereunder) for all costs
associated with the transfer of master servicing from the predecessor master
servicer, including, without limitation, any costs or expenses associated with
the complete transfer of all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the Trustee to correct
any errors or insufficiencies in the servicing data or otherwise to enable the
Trustee to service the Mortgage Loans properly and effectively. 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 REO Property, that portion of such payments which it would have
received as reimbursement under this Agreement if notice of termination had not
been given. The termination of the rights and obligations of the Master Servicer
shall not affect any obligations incurred by the Master Servicer prior to such
termination.

     Section 8.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; PROVIDED, HOWEVER, it is understood and agreed by
the parties that there will be a period of transition (not to exceed 90 days)
before the servicing transfer is fully effected and that the Trustee (i) shall
be under no obligation to purchase any Mortgage Loan pursuant to Section 10.01;
and (ii) shall have no obligation whatsoever with respect to any liability
(other than

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<PAGE>

advances deemed recoverable and not previously made) incurred by the Master
Servicer at or prior to the time a successor master servicer has accepted
appointment. Notwithstanding the foregoing, the parties hereto agree that the
Trustee, in its capacity as successor Master Servicer, immediately will assume
all of the obligations of the Master Servicer to make Monthly Advances and the
Trustee will assume the other duties of the Master Servicer as soon as
practicable, but in no event later than 90 days after the Trustee becomes
successor Master Servicer pursuant to the preceding sentence. Notwithstanding
the foregoing, the Trustee, in its capacity as successor Master Servicer, shall
not be responsible for the lack of information and/or documents that it cannot
obtain through reasonable efforts. As compensation therefor, but subject to
Section 7.06, the Trustee shall be entitled to all funds relating to the
Mortgage Loans which the Master Servicer would have been entitled to retain if
the Master Servicer had continued to act hereunder, except for those amounts due
the Master Servicer as reimbursement permitted under this Agreement for advances
previously made or expenses previously incurred. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act, appoint or petition a 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.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on the Mortgage Loans as it and
such successor shall agree; PROVIDED, HOWEVER, that the provisions of Section
7.06 shall apply, no such compensation shall be in excess of that permitted the
Trustee under this Subsection 8.02(a), and that such successor shall undertake
and assume the obligations of the Trustee to pay compensation to any third
Person acting as an agent or independent contractor in the performance of master
servicing responsibilities hereunder. The Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession.

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

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

     Section 8.04. WAIVER OF DEFAULTS. The Trustee shall transmit by mail to all
Certificateholders, within 60 days after the occurrence of any Event of Default
known to the Trustee, unless such Event of Default shall have been cured, notice
of each such Event of Default hereunder known to the Trustee. The Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund may, on behalf of all Certificateholders, waive any

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<PAGE>

default by the Master Servicer in the performance of its obligations hereunder
and the consequences thereof, except a default in the making of or the causing
to be made any required distribution on the Certificates. Upon any such waiver
of a past default, such default shall be deemed to cease to exist, and any Event
of Default arising therefrom shall be deemed to have been timely remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived. The Trustee shall give notice of any such waiver to the
Rating Agencies.

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

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<PAGE>

                                   ARTICLE IX

                             Concerning the Trustee

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

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

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

     (d) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; PROVIDED, HOWEVER, that:

          (i) Prior to the occurrence of an Event of Default, and after the
     curing or waiver of all such Events of Default which may have occurred, the
     duties and obligations of the Trustee shall be determined solely by the
     express provisions of this Agreement, the Trustee shall not be liable
     except for the performance of such duties and obligations as are
     specifically set forth in this Agreement, no implied covenants or
     obligations shall be read into this Agreement against the Trustee and, in
     the absence of bad faith on the part of the Trustee, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon any certificates or opinions furnished
     to the Trustee and conforming to the requirements of this Agreement;

          (ii) The Trustee shall not be liable in its individual capacity for an
     error of judgment made in good faith by a Responsible Officer or
     Responsible Officers of the Trustee, unless it shall be proved that the
     Trustee was negligent in ascertaining the pertinent facts;

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<PAGE>

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

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

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

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

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

     (e) All funds received by the Trustee and required to be deposited in the
Certificate Account pursuant to this Agreement will be promptly so deposited by
the Trustee. The Trustee shall not be liable for interest or other compensation
on uninvested funds held under this Agreement.

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

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

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

                                      -84-

<PAGE>

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

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

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

          (iv) Prior to the occurrence of an Event of Default hereunder and
     after the curing or waiver of all Events of Default which may have
     occurred, the Trustee shall not be liable in its individual capacity for
     any action taken, suffered or omitted by it in good faith and believed by
     it to be authorized or within the discretion or rights or powers conferred
     upon it by this Agreement;

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

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

                                      -85-

<PAGE>

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

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

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

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

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

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

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

     Section 9.05. TRUSTEE'S FEES AND EXPENSES. (a) The Trustee shall be paid
the Trustee Fee in accordance with the provisions of this Agreement. The Trust
Fund will be liable for the Trustee's expenses, including all reasonable
out-of-pocket expenses, disbursements and advances incurred or made by the
Trustee in the administration of the trusts hereunder (including the reasonable
compensation, expenses and disbursements of its counsel) except any such
expense, disbursement or advance as may arise from its negligence or intentional
misconduct or which is the responsibility of the Certificateholders or the
Master Servicer hereunder, and to the extent that the funds in the Certificate
Account are not sufficient to pay the Trustee's Fees. 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.

     (b) To the extent not otherwise indemnified against by the Master Servicer
or the Seller hereunder, the Trust shall indemnify the Indemnified Persons for,
and will hold them harmless against, any loss, liability or expense incurred on
their part, arising out of, or in connection with, this Agreement and the
Certificates, including the costs and expenses (including reasonable legal fees
and expenses) of defending themselves against any such claim other than (i) any
loss, liability or expense related to such Indemnified Person's failure to
perform such Indemnified Person's duties in strict compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and (ii) any loss, liability or expense
incurred by reason of such Indemnified Person's willful misfeasance, bad faith
or negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. This indemnity shall survive the
resignation or removal of the Trustee and the termination of this Agreement.

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

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

     Section 9.08. RESIGNATION AND REMOVAL OF THE TRUSTEE. (a) The Trustee may
at any time resign and be discharged from the Trust hereby created by giving
written notice thereof to the Seller and the Master Servicer, with a copy to the
Rating Agencies. Upon receiving such notice of resignation, the Seller shall
promptly appoint a successor Trustee by written instrument, in triplicate, one
copy of which instrument shall be delivered to each of the resigning Trustee and
the successor Trustee. If no successor Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

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

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

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

     Section 9.09. SUCCESSOR TRUSTEE. (a) Any successor Trustee appointed as
provided in Section 9.08 shall execute, acknowledge and deliver to the Master
Servicer, the Seller and to its predecessor Trustee an instrument accepting such
appointment hereunder. The resignation or removal of the predecessor Trustee
shall then become effective and such successor Trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee herein. The predecessor Trustee shall after payment
of its outstanding fees and expenses promptly deliver to the successor Trustee
all assets and records of the Trust held by it hereunder, and the predecessor
Trustee

                                      -88-

<PAGE>

shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor Trustee all such rights, powers, duties and obligations.

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

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

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

     Section 9.11. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the Master
Servicer 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 Master Servicer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section 9.11, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable.

     (b) If the Master Servicer shall not have joined in such appointment within
15 days after the receipt by it of a written request so to do, or in case an
Event of Default with respect to the Master Servicer shall have occurred and be
continuing, the Trustee shall have the power to make such appointment without
the Master Servicer.

     (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

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performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor to the
Master Servicer hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion thereof
in any such jurisdiction) shall be exercised and performed by such separate
trustee or co-trustee at the direction of the Trustee.

     (e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision 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 Master Servicer
and the Trustee acting jointly may at any time accept the resignation of or
remove any separate trustee or co-trustee, except that following the occurrence
of any Event of Default which has not been cured, the Trustee acting alone may
accept the resignation of or remove any separate trustee or co-trustee.

     Section 9.12. MASTER SERVICER SHALL PROVIDE INFORMATION AS REASONABLY
REQUIRED. The Master Servicer shall furnish to the Trustee, during the term of
this Agreement, such periodic, special, or other reports or information (and in
such electronic format or other means acceptable to the Trustee) as may
reasonably be requested by the Trustee in order to fulfill its duties and
obligations under this Agreement.

     Section 9.13. FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS. (a) For federal income tax purposes, the taxable year of
REMIC 1 and REMIC 2 shall be a calendar year and the Trustee shall maintain or
cause the maintenance of the books of REMIC 1 and REMIC 2 on the accrual method
of accounting.

     (b) The Trustee shall prepare, sign and file or cause to be filed with the
Internal Revenue Service Federal tax information returns or elections required
to be made hereunder with respect to REMIC 1 and REMIC 2 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

                                      -90-

<PAGE>

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. In connection with the foregoing, the
Trustee 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 REMIC 1 and REMIC 2 (the "REMIC Reporting Agent") as required by IRS Form
8811. The Trustee will apply for an Employee Identification Number from the IRS
under Form SS-4 or any other acceptable method for all tax entities and will
also file the IRS Form 8811 The Trustee shall make the elections to treat REMIC
1 and REMIC 2 as a REMIC (which elections shall apply to the taxable period
ending December 31, 2001 and each calendar year thereafter) in such manner as
the Code or applicable Treasury regulations may prescribe. 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 Certificate is
hereby designated as the "Tax Matters Person" (within the meaning of Treas. Reg.
ss.ss. 1.860F-4(d)) for REMIC 1 and REMIC 2. The Trustee is hereby designated
and appointed as the agent of each such Tax Matters Person. Any Holder of a
Residual Certificate will by acceptance thereof appoint the Trustee as agent and
attorney-in-fact for the purpose of acting as Tax Matters Person for REMIC 1 and
REMIC 2 during such time as the Trustee does not own any such Residual
Certificate. In the event that the Code or applicable Treasury regulations
prohibit the Trustee from signing tax or information returns or other
statements, or the Trustee from acting as Tax Matters Person (as an agent or
otherwise), the Trustee shall take whatever action that in its sole good faith
judgment is necessary for the proper filing of such information returns or for
the provision of a tax matters person, including designation of the Holder of a
Residual Certificate to sign such returns or act as tax matters person. Each
Holder of a Residual Certificate shall be bound by this Section.

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

     (d) The Trustee shall prepare and file or cause to be filed any state
income tax returns required under Applicable State Law with respect to each of
REMIC 1 and REMIC 2 or the Trust Fund.

     Section 9.14. REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION. Within
15 days after each Distribution Date, the Trustee shall, in accordance with
industry standards, file with the Commission via the Electronic Data Gathering
and Retrieval System ("EDGAR"), a Form 8-K with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30, 2002, the Trustee shall, in accordance with industry standards and
only if instructed by the Seller, file a Form 15 Suspension Notice with respect
to the Trust Fund, if applicable. Prior to March 30, 2002, the Trustee shall
file a Form 10-K, in substance conforming to industry standards, with respect to
the Trust Fund. The Seller hereby grants to the Trustee a limited power of
attorney to execute and file each such document on behalf of the Seller. Such

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<PAGE>

power of attorney shall continue until either the earlier of (i) receipt by the
Trustee from the Seller of written termination of such power of attorney and
(ii) the termination of the Trust Fund. The Seller agrees to promptly furnish to
the Trustee, from time to time upon request, such further information, reports
and financial statements within its control related to this Agreement and the
Mortgage Loans as the Trustee reasonably deems appropriate to prepare and file
all necessary reports with the Commission. The Trustee shall have no
responsibility to file any items other than those specified in this Section
9.14; provided, however, the Trustee will cooperate with the Seller in
connection with any additional filings with respect to the Trust Fund as the
Seller deems necessary under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Copies of all reports filed by the Trustee under the
Exchange Act shall be sent to: the Seller c/o Bear, Stearns & Co. Inc., Attn:
Managing Director-Analysis and Control, One Metrotech Center North, Brooklyn,
New York 11202-3859. Fees and expenses incurred by the Trustee in connection
with this Section 9.14 shall not be reimbursable from the Trust Fund.

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                                    ARTICLE X

                                   Termination

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

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

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

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

     (c) The right of the Seller or its designee to repurchase all Mortgage
Loans pursuant to Subsection 10.01(a)(i) above shall be exercisable only if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than 10% of the Cut-off Date Balance, or (ii) the
Seller, based upon an Opinion of Counsel, has determined that the REMIC status
of REMIC 1 or REMIC 2 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 1 and REMIC 2 at any time, and upon such election, the Seller or its
designee, shall repurchase all the Mortgage Loans.

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<PAGE>

     (d) The Trustee shall give notice of any termination to the applicable
Certificateholders, as applicable, with a copy to the Rating Agencies, upon
which such 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 15th 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 such
Certificates will be made upon presentation and surrender of such 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 such Certificates at the office of the Trustee therein
specified.

     (e) If the option of the Seller to repurchase or cause the repurchase of
all Mortgage Loans under Subsection 10.01(a)(i) above is exercised, the Seller
and/or its designee shall deliver to the Trustee for deposit in the Certificate
Account, by the Business Day prior to the applicable Distribution Date, an
amount equal to the repurchase price for the related Mortgage Loans being
purchased by it and all property acquired with respect to such Mortgage Loans
remaining in REMIC 1 and REMIC 2. Upon presentation and surrender of the
Certificates by the Certificateholders, the Trustee shall distribute to the
Certificateholders an amount determined as follows: with respect to each
Certificate (other than the Class R Certificates), the outstanding Current
Principal Amount, plus with respect to each Certificate (other than the Class R
Certificates), one month's interest thereon at the applicable Pass-Through Rate;
and with respect to the Class R Certificates, the Percentage Interest evidenced
thereby multiplied by the difference, if any, between the above described
repurchase price and the aggregate amount to be distributed to the Holders of
the Certificates (other than the Class R Certificates). If the proceeds are not
sufficient to pay all of the Certificates in full, any such deficiency will be
allocated first, to the Class C Certificates, second to the Class B
Certificates, third to the Class M-2 Certificates, fourth to the Class M-1
Certificates, and then to the Class A-1 and Class A-2 Certificates on a PRO RATA
basis. Upon deposit of the required repurchase price and following such final
Distribution Date, the Trustee shall release promptly to the Seller and/or its
designee the Mortgage Files for the remaining applicable Mortgage Loans, and the
Accounts with respect thereto shall terminate, subject to the Trustee's
obligation to hold any amounts payable to Certificateholders in trust without
interest pending final distributions pursuant to Subsection 10.01(g). Any other
amounts remaining in the Accounts will belong to the Seller.

     (f) In the event that this Agreement is terminated by reason of the payment
or liquidation of all Mortgage Loans or the disposition of all property acquired
with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above, the
Master Servicer shall deliver to the Trustee for deposit in the Certificate
Account all distributable amounts remaining in the Protected Account, and shall
cause any Sub-Servicers to, deliver to the Trustee for deposit in the
Certificate Account all distributable amounts remaining in their Protected
Accounts. Upon the presentation and surrender of the Certificates, the Trustee
shall distribute to the remaining Certificateholders, in accordance with their
respective interests, all distributable amounts remaining in the Certificate
Account. Upon deposit by any Sub-Servicers of such distributable amounts and
delivery to the Trustee of an Officer's Certificate from the Master Servicer
certifying that such deposit has been made, 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 Accounts
shall terminate, subject to the Trustee's

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<PAGE>

obligation to hold any amounts payable to the Certificateholders in trust
without interest pending final distributions pursuant to 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, REMIC 1 and REMIC 2 shall be terminated in accordance with
the following additional requirements, unless the Trustee has been furnished
with an Opinion of Counsel to the effect that the failure of the Trust to comply
with the requirements of this Section 10.02 will not (i) result in the
imposition of taxes on "prohibited transactions" as defined in Section 860F of
the Code on REMIC 1 or REMIC 2 or (ii) cause REMIC 2 or REMIC 2 to fail to
qualify as a REMIC at any time that any Regular Certificates are outstanding:

          (i) within 90 days prior to the final Distribution Date, at the
     written direction of the Seller, the Trustee, as agent for the respective
     Tax Matters Persons, shall adopt a plan of complete liquidation of REMIC 1
     and REMIC 2 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 1 and REMIC 2 and at or prior to the final
     Distribution Date, the Trustee shall sell for cash all of the assets of the
     Trust to or at the direction of the Seller, and REMIC 1 and REMIC 2 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 REMIC 1 and
REMIC 2 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 REMIC 1 and REMIC 2.

                                      -95-

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                                      -96-

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                                   ARTICLE XI

                            Miscellaneous Provisions

     Section 11.01. INTENT OF PARTIES. The parties intend that REMIC 1 and REMIC
2 shall each be treated as a REMIC for federal income tax purposes and that the
provisions of this Agreement should be construed in furtherance of this intent.

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

     (b) This Agreement may also be amended from time to time by the Seller, the
Trustee and the Master Servicer, 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 1 or REMIC 2
to fail to qualify as a REMIC for federal income tax purposes, as evidenced by
an Opinion of Independent Counsel which shall be provided to the Trustee other
than at the Trustee's expense. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
Section 11.02(b), Certificates registered in the name of or held for the benefit
of the Seller, the Master Servicer, a Servicer or the Trustee or any Affiliate
thereof shall be entitled to vote their Undivided Fractional 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 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.

                                      -97-

<PAGE>

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

     (f) Notwithstanding any provision of this Agreement to the contrary, this
Agreement may not be amended, modified or waived in any manner than would be
adverse to any interest of the Master Servicer, without the Master Servicer's
prior written consent.

     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 Master
Servicer shall effect such recordation, at the Trust's expense upon the request
in writing of a Certificateholder, but only if such direction is accompanied by
an Opinion of Counsel (provided at the expense of the Certificateholder
requesting recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.

     Section 11.04. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (a) The death or
incapacity of any Certificateholder shall not terminate this Agreement or the
Trust, nor entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.

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

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

     (d) No one or more Certificateholders shall have any right by virtue of any
provision of this Agreement to affect the rights of any other Certificateholders
or to obtain or seek to obtain

                                      -98-

<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. 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.

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

     Section 11.07. NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at, mailed by registered mail,
return receipt requested, postage prepaid, or by recognized overnight courier,
to or transmitted by facsimile to (i) in the case of the Seller, 245 Park
Avenue, New York, New York 10167, Attention: Vice President-Servicing,
telecopier number: (212) 272-5591, or to such other address as may hereafter be
furnished to the other parties hereto in writing; (ii) in the case of the
Trustee, at its Corporate Trust Office and with a copy to 11000 Broken Land
Parkway, Columbia, Maryland 21044 (Attention: SAMI 2001-3), telecopier number:
(410) 884-2360, or such other address as may hereafter be furnished to the other
parties hereto in writing; (iii) in the case of the Master Servicer, GMAC
Mortgage Corporation, 100 Witmer Road, Horsham, Pennsylvania, 19044, Attention:
President; or (iv) in the case of the Rating Agencies, Moody's Investors
Service, 99 Church Street, New York, New York 10007, Attention: Mortgage-Backed
Securities Rating Group; and Standard & Poor's Rating Services, 55 Water Street,
New York, New York, Attention: Residential Mortgages. Any notice delivered to
the Seller, the Master Servicer or the Trustee under this Agreement shall be
effective only upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, 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

                                      -99-

<PAGE>

enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.

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

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

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

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

     1. Any material change or amendment to this Agreement or any Sub-Servicing
Agreement (as reported to it by the Master Servicer);

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

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

     4. The repurchase or substitution of Mortgage Loans;

     5. The final payment to Certificateholders; and

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

     In addition, in accordance with Section 3.19, the Master Servicer shall
promptly furnish to each Rating Agency copies of each annual independent public
accountants' servicing report.

                                      -100-

<PAGE>

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

                                   STRUCTURED ASSET MORTGAGE
                                   INVESTMENTS INC., as Seller

                                   By:______________________________________
                                         Name:
                                         Title:

                                   WELLS FARGO BANK MINNESOTA,
                                   NATIONAL
                                   ASSOCIATION, as Trustee

                                   By:______________________________________
                                         Name:
                                         Title:

                                   GMAC MORTGAGE CORPORATION, as
                                   Master Servicer

                                   By:______________________________________
                                   Name:
                                   Title:

Accepted and Agreed:

EMC MORTGAGE CORPORATION

By:_______________________________
      Name:
      Title:

<PAGE>

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

     On the 30th day of January, 2001 before me, a notary public in and for said
State, personally appeared [_____________], known to me to be a [_________] of
Structured Asset Mortgage Investments Inc., the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

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

                                      __________________________________________
                                                        Notary Public
[Notarial Seal]

<PAGE>

STATE OF                       )
                               ) ss.:
COUNTY OF                      )

     On the 30th day of January, 2001 before me, a notary public in and for said
State, personally appeared [______], known to me to be a [__________] of Wells
Fargo Bank Minnesota, National Association, the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

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

                                      _________________________________________
                                                       Notary Public

[Notarial Seal]

<PAGE>

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

     On the 30th day of January, 2001 before me, a notary public in and for said
State, personally appeared ____________, known to me to be an [Assistant Vice
President] of GMAC 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 NEW YORK               )
                                ) ss.:
COUNTY OF NEW YORK              )

         On the 30th day of January, 2001 before me, a notary public in and for
said State, personally appeared [__________], known to me to be a of EMC
Mortgage Corporation, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.

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

                                      __________________________________________
                                                      Notary Public
[Notarial Seal]

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