Document:

STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,

                                     Seller,

                  NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,

                                 Master Servicer

                                       and

                              BANKERS TRUST COMPANY

                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT

                           Dated as of January 1, 2000

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

                   Structured Asset Mortgage Investments Inc.
                       Mortgage Pass-Through Certificates

                                  Series 2000-1

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                                             TABLE OF CONTENTS

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                                                 ARTICLE I

                                                Definitions

                                                ARTICLE II

                                       Conveyance of Mortgage Loans;
                                     Original Issuance of Certificates

Section 2.01.     Conveyance of Mortgage Loans to Trustee...............................................38
Section 2.02.     Acceptance of Mortgage Loans by Trustee...............................................40
Section 2.03.     Assignment of Interest in the Mortgage Loan Purchase Agreement and other
                  agreements; Assignment of Interest in Additional Collateral...........................42
Section 2.04.     Substitution of Mortgage Loans........................................................44
Section 2.05.     Issuance of Certificates..............................................................46
Section 2.06.     Representations and Warranties of the Trustee.........................................46
Section 2.07.     Representations and Warranties Concerning the Seller..................................47

Section 2.08.     Representations and Warranties of the Master Servicer.................................48

                                                ARTICLE III

                              Administration and Servicing of Mortgage Loans

Section 3.01.     Duties of the Master Servicer.........................................................50
Section 3.02      Monitoring of Servicers' Performance..................................................50
Section 3.03.     Master Servicer Fidelity Bond and Master Servicer Errors and Omissions Insurance
                  Policy................................................................................51
Section 3.04      Master Servicer's Financial Statements and Related Information........................51
Section 3.05      Power to Act; Procedures..............................................................52
Section 3.06      [Reserved]............................................................................52
Section 3.07      "Due on Sale" Clauses; Assumption Agreements..........................................52
Section 3.08      Release of Mortgage Files.............................................................52
Section 3.09      Documents, Records and Funds in Possession of Master Servicer To Be Held for
                  Trustee...............................................................................53
Section 3.10      [Reserved]............................................................................54
Section 3.11      Standard Hazard and Flood Insurance Policies..........................................54
Section 3.12      Presentment of Claims and Collection of Proceeds......................................54
Section 3.13      Maintenance of the Primary Mortgage Insurance Policies................................55
Section 3.14      Trustee To Retain Possession of Certain Insurance Policies and Documents..............55
Section 3.15      Realization Upon Defaulted Mortgage Loans.............................................56

                                                    -i-

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Section 3.16      Compensation to the Master Servicer...................................................56
Section 3.17      REO Property..........................................................................57
Section 3.18      Annual Officer's Certificate as to Compliance.........................................57
Section 3.19      Annual Independent Accountants' Servicing Report......................................58

                                                ARTICLE IV

                                                 Accounts

Section 4.01.     Protected Accounts....................................................................59
Section 4.02.     Certificate Account...................................................................60
Section 4.03.     Permitted Withdrawals and Transfers from the Certificate Account......................62

                                                 ARTICLE V

                                               Certificates

Section 5.01.     Certificates..........................................................................64
Section 5.02.     Registration of Transfer and Exchange of Certificates.................................68
Section 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates.....................................72
Section 5.04.     Persons Deemed Owners.................................................................72
Section 5.05.     Transfer Restrictions on Residual Certificates........................................72
Section 5.06.     Restrictions on Transferability of Certificates.......................................73
Section 5.07.     ERISA Restrictions....................................................................74
Section 5.08.     Rule 144A Information.................................................................75

                                                ARTICLE VI

                                      Payments to Certificateholders

Section 6.01.     Distributions on the Certificates.....................................................76
Section 6.02.     Allocation of Deferred Interest.......................................................79
Section 6.03.     Allocation of Losses..................................................................79
Section 6.04.     Payments..............................................................................83
Section 6.05.     Statements to Certificateholders......................................................83
Section 6.06.     Reserved..............................................................................85
Section 6.07.     Monthly Advances......................................................................85
Section 6.08.     Compensating Interest Payments........................................................86
Section 6.09.     Reports of Foreclosures and Abandonment of Mortgaged Property.........................86
Section 6.10.     Surety Bond...........................................................................86

                                                ARTICLE VII

                                            The Master Servicer

                                                   -ii-

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Section 7.01.     Liabilities of the Master Servicer....................................................88
Section 7.02.     Merger or Consolidation of the Master Servicer........................................88
Section 7.03.     Indemnification of the Trustee........................................................88
Section 7.04.     Limitation on Liability of the Master Servicer and Others.............................88
Section 7.05.     Master Servicer Not to Resign.........................................................90
Section 7.06.     Successor Master Servicer.............................................................90
Section 7.07.     Sale and Assignment of Master Servicing...............................................90

                                               ARTICLE VIII

                                                  Default

Section 8.01.     Events of Default.....................................................................91
Section 8.02.     Trustee to Act; Appointment of Successor..............................................92
Section 8.03.     Notification to Certificateholders....................................................93
Section 8.04.     Waiver of Defaults....................................................................93
Section 8.05.     List of Certificateholders............................................................93

                                                ARTICLE IX

                                          Concerning the Trustee

Section 9.01.     Duties of Trustee.....................................................................95
Section 9.02.     Certain Matters Affecting the Trustee.................................................96
Section 9.03.     Trustee Not Liable for Certificates or Mortgage Loans.................................98
Section 9.04.     Trustee May Own Certificates..........................................................98
Section 9.05.     Trustee's Fees and Expenses...........................................................98
Section 9.06.     Eligibility Requirements for Trustee..................................................99
Section 9.07.     Insurance.............................................................................99
Section 9.08.     Resignation and Removal of the Trustee...............................................100
Section 9.09.     Successor Trustee....................................................................100
Section 9.10.     Merger or Consolidation of Trustee...................................................101
Section 9.11.     Appointment of Co-Trustee or Separate Trustee........................................101
Section 9.12.     Master Servicer Shall Provide Information as Reasonably Required.....................102
Section 9.13.     Federal Information Returns and Reports to Certificateholders; REMIC
                  Administration.......................................................................102
Section 9.14.     Appointment of Custodians............................................................105

                                                 ARTICLE X

                                                Termination

Section 10.01.    Termination Upon Repurchase by the Seller or its Designee or Liquidation of the
Mortgage Loans.........................................................................................106
Section 10.02.    Additional Termination Requirements..................................................108

                                                   -iii-

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                                                ARTICLE XI

                                         Miscellaneous Provisions

Section 11.01.    Intent of Parties....................................................................109
Section 11.02.    Amendment............................................................................109
Section 11.03.    Recordation of Agreement.............................................................110
Section 11.04.    Limitation on Rights of Certificateholders...........................................110
Section 11.05.    Acts of Certificateholders...........................................................111
Section 11.06.    Governing Law........................................................................111
Section 11.07.    Notices..............................................................................111
Section 11.08.    Severability of Provisions...........................................................112
Section 11.09.    Successors and Assigns...............................................................112
Section 11.10.    Article and Section Headings.........................................................112
Section 11.11.    Counterparts.........................................................................112
Section 11.12.    Notice to Rating Agencies............................................................112
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                                    EXHIBITS

Exhibit A-1     -      Form of Class [I-A-__][II-A-__] [III-A-__] Certificates
Exhibit A-2     -      Form of Class [I-B-__][II-B-__] [III-B-__] Certificates
Exhibit A-3     -      Form of Class [R-_] Certificates
Exhibit B-1     -      Group 1 Mortgage Loan Schedule
Exhibit B-2     -      Group 2 Mortgage Loan Schedule
Exhibit B-3     -      Group 3 Mortgage Loan Schedule
Exhibit C       -      Representations and Warranties 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 Custodial Agreement
Exhibit H       -      Thornburg Report
Exhibit I       -      [Reserved]
Exhibit J       -      [Reserved]
Exhibit K       -      List of Mortgage Loans for which Mortgage Notes are Lost
Exhibit L       -      [Reserved]
Exhibit M       -      [Reserved]
Exhibit N-1     -      Chase Servicing Agreement
Exhibit N-2     -      EMC Servicing Agreement
Exhibit N-3     -      Alliance Servicing Agreement
Exhibit N-4     -      Countrywide Servicing Agreement
Exhibit N-5     -      First Union Servicing Agreement
Exhibit N-6     -      SouthTrust Servicing Agreement

                                      -iv-

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Exhibit N-7     -      Cendant Servicing Agreement
Exhibit N-8     -      Citicorp Servicing Agreement
Exhibit N-9     -      Merrill Lynch Servicing Agreement
Exhibit N-10    -      GMAC Servicing Agreement
Exhibit O       -      Assignment Agreements

                                       -v-

<PAGE>

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

         Pooling and Servicing Agreement dated as of January 1, 2000, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as the
seller (the "Seller"), Norwest Bank Minnesota, National Association, a national
banking association, as the master servicer (in such capacity, the "Master
Servicer") and Bankers Trust Company, not in its individual capacity but solely
as trustee (the "Trustee").

                              PRELIMINARY STATEMENT

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

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

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

         The Group 1 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 $175,580,588.66. The Group 2 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
$121,847,207.15. The Group 3 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 $150,219,388.93. The initial
principal amount of the Group 1, Group 2 and Group 3 Certificates will not
exceed the Outstanding Principal Balance of the related Mortgage Loans.

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

                                       -1-

<PAGE>

                                    ARTICLE I

                                   Definitions

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

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

         ACCOUNT: The 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 (or in the case of
the Class I-A-IO Certificates, the Notional Amount) of such Certificate
immediately prior to such Distribution Date, calculated on the basis of a
360-day year consisting of twelve 30-day months, less (i) in the case of a
Senior Certificate, such Certificate's share of any Net Interest Shortfall, and,
after the applicable Cross-Over Date, the interest portion of any Realized
Losses and (ii) in the case of a Subordinate Certificate, such Certificate's
share of any Net Interest Shortfall and the interest portion of any Realized
Losses.

         ADDITIONAL COLLATERAL: As defined in the Merrill Lynch Servicing
Agreement attached hereto as Exhibit N-9.

         ADDITIONAL COLLATERAL MORTGAGE LOAN: As defined in the Merrill Lynch
Servicing Agreement attached hereto as Exhibit N-9.

         ADVANCING DATE: The Business Day preceding the related Distribution
Date.

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

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

         ALLOCABLE SHARE: With respect to each Class of Group 1 Subordinate
Certificates:

                                       -2-

<PAGE>

                  (a) as to any Distribution Date and amounts distributable
         pursuant to clauses (i) and (iii) of the definition of Group 1
         Subordinate Optimal Principal Amount, the fraction, expressed as a
         percentage, the numerator of which is the Current Principal Amount of
         such Class and the denominator of which is the aggregate Current
         Principal Amount of all Classes of the Group 1 Subordinate
         Certificates; and

                  (b) as to any Distribution Date and amounts distributable
         pursuant to clauses (ii), (iv) and (v) of the definition of Group 1
         Subordinate Optimal Principal Amount, and as to each Class of Group 1
         Subordinate Certificates (other than the Class of Group 1 Subordinate
         Certificates having the lowest numerical designation as to which the
         Class Prepayment Distribution Trigger shall not be applicable) for
         which (x) the related Class Prepayment Distribution Trigger has been
         satisfied on such Distribution Date, the fraction, expressed as a
         percentage, the numerator of which is the Current Principal Amount of
         such Class and the denominator of which is the aggregate Current
         Principal Amount of all such Classes of Group 1 Subordinate
         Certificates and (y) the related Class Prepayment Distribution Trigger
         has not been satisfied on such Distribution Date, 0%; provided that if
         on a Distribution Date, the Current Principal Amount of any Class of
         Group 1 Subordinate Certificates for which the related Class Prepayment
         Distribution Trigger was satisfied on such Distribution Date is reduced
         to zero, any amounts distributed pursuant to this clause (b), to the
         extent of such Class's remaining Allocable Share, shall be distributed
         to the remaining Classes of Group 1 Subordinate Certificates which
         satisfy the related Class Prepayment Distribution Trigger and to the
         Class of Group 1 Subordinate Certificates having the lowest numerical
         designation in reduction of their respective Current Principal Amounts
         in the order of their numerical Class designations.

With respect to each Class of Group 2 Subordinate Certificates:

                  (a) as to any Distribution Date and amounts distributable
         pursuant to clauses (i) and (iii) of the definition of Group 2
         Subordinate Optimal Principal Amount, the fraction, expressed as a
         percentage, the numerator of which is the Current Principal Amount of
         such Class and the denominator of which is the aggregate Current
         Principal Amount of all Classes of the Group 2 Subordinate
         Certificates; and

                  (b) as to any Distribution Date and amounts distributable
         pursuant to clauses (ii), (iv) and (v) of the definition of Group 2
         Subordinate Optimal Principal Amount, and as to each Class of Group 2
         Subordinate Certificates (other than the Class of Group 2 Subordinate
         Certificates having the lowest numerical designation as to which the
         Class Prepayment Distribution Trigger shall not be applicable) for
         which (x) the related Class Prepayment Distribution Trigger has been
         satisfied on such Distribution Date, the fraction, expressed as a
         percentage, the numerator of which is the Current Principal Amount of
         such Class and the denominator of which is the aggregate Current
         Principal Amount of all such Classes of Group 2 Subordinate
         Certificates and (y) the related Class Prepayment Distribution Trigger
         has not been satisfied on such Distribution Date, 0%; provided that if
         on a Distribution Date, the Current Principal Amount of any Class of
         Group 2 Subordinate Certificates for which the related Class Prepayment
         Distribution Trigger was satisfied on such Distribution Date is reduced
         to zero, any amounts distributed pursuant to this clause (b), to the
         extent of such

                                       -3-

<PAGE>

         Class's remaining Allocable Share, shall be distributed to the
         remaining Classes of Group 2 Subordinate Certificates which satisfy the
         related Class Prepayment Distribution Trigger and to the Class of Group
         2 Subordinate Certificates having the lowest numerical designation in
         reduction of their respective Current Principal Amounts in the order of
         their numerical Class designations.

With respect to each Class of Group 3 Subordinate Certificates:

                  (a) as to any Distribution Date and amounts distributable
         pursuant to clauses (i) and (iii) of the definition of Group 3
         Subordinate Optimal Principal Amount, the fraction, expressed as a
         percentage, the numerator of which is the Current Principal Amount of
         such Class and the denominator of which is the aggregate Current
         Principal Amount of all Classes of the Group 3 Subordinate
         Certificates; and

                  (b) as to any Distribution Date and amounts distributable
         pursuant to clauses (ii), (iv) and (v) of the definition of Group 3
         Subordinate Optimal Principal Amount, and as to each Class of Group 3
         Subordinate Certificates (other than the Class of Group 3 Subordinate
         Certificates having the lowest numerical designation as to which the
         Class Prepayment Distribution Trigger shall not be applicable) for
         which (x) the related Class Prepayment Distribution Trigger has been
         satisfied on such Distribution Date, the fraction, expressed as a
         percentage, the numerator of which is the Current Principal Amount of
         such Class and the denominator of which is the aggregate Current
         Principal Amount of all such Classes of Group 3 Subordinate
         Certificates and (y) the related Class Prepayment Distribution Trigger
         has not been satisfied on such Distribution Date, 0%; provided that if
         on a Distribution Date, the Current Principal Amount of any Class of
         Group 3 Subordinate Certificates for which the related Class Prepayment
         Distribution Trigger was satisfied on such Distribution Date is reduced
         to zero, any amounts distributed pursuant to this clause (b), to the
         extent of such Class's remaining Allocable Share, shall be distributed
         to the remaining Classes of Group 3 Subordinate Certificates which
         satisfy the related Class Prepayment Distribution Trigger and to the
         Class of Group 3 Subordinate Certificates having the lowest numerical
         designation in reduction of their respective Current Principal Amounts
         in the order of their numerical Class designations.

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

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

                                       -4-

<PAGE>

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

         ASSUMED FINAL DISTRIBUTION DATE:  February 25, 2030.

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

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

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

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

         BSMCC:  Bear Stearns Mortgage Capital Corporation.

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

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

         CERTIFICATE ACCOUNT: A Rating Agency Eligible Account created and
maintained pursuant to Section 4.02, which shall be denominated "Bankers Trust
Company, as Trustee f/b/o holders of Structured Asset Mortgage Investments Inc.,
Mortgage Pass-Through Certificates, Series 2000-1- Certificate Account."

         CERTIFICATE ACCOUNT ADVANCE: As of any Determination Date, the amount
on deposit in a Protected Account which is not required to be transferred to the
Certificate Account for distribution during the calendar month in which such
Determination Date occurs but which is deposited in the Certificate Account and
used to make a Monthly Advance.

         CERTIFICATE GROUP: The Group 1 Certificates, Group 2 Certificates or
Group 3 Certificates, as applicable.

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

                                       -5-

<PAGE>

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.

         CERTIFICATEHOLDER: A Holder of a Certificate.

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

         CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Group 1
Subordinate Certificates for any Distribution Date, the Class Prepayment
Distribution Trigger is satisfied if the fraction (expressed as a percentage),
the numerator of which is the aggregate Current Principal Amount of such Class
and each Class of Group 1 Subordinate Certificates subordinate thereto, if any,
and the denominator of which is the Scheduled Principal Balance of all of the
Group 1 Mortgage Loans as of the related Due Date, equals or exceeds such
percentage calculated as of the Closing Date. For a Class of Group 2 Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount of such Class and each Class
of Group 2 Subordinate Certificates subordinate thereto, if any, and the
denominator of which is the Scheduled Principal Balance of all of the Group 2
Mortgage Loans as of the related Due Date, equals or exceeds such percentage
calculated as of the Closing Date. For a Class of Group 3 Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount of such Class and each Class
of Group 3 Subordinate Certificates subordinate thereto, if any, and the
denominator of which is the Scheduled Principal Balance of all of the Group 3
Mortgage Loans as of the related Due Date, equals or exceeds such percentage
calculated as of the Closing Date.

         CLASS R CERTIFICATE:  Any of the Class R-I or Class R-II Certificates.

         CLOSING DATE:  January 28, 2000.

         CODE:  The Internal Revenue Code of 1986.

         COMPENSATING INTEREST PAYMENTS:  As defined in Section 6.08.

         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 123 Washington
Street, New York, New York 10006, Attention: SAMI 2000-01 (BS2000-1).

         CORRESPONDING CERTIFICATE: With respect to REMIC I Regular Interests B
and REMIC I Regular Interests C, the Group 2 and Group 3 Certificates,
respectively. With respect to REMIC I Regular Interest A-1, the Class I-A-1 and
Class I-A-IO Certificates, and with respect to REMIC I Regular Interest A-2, the
Class R-II Certificates and the Group 1 Certificates (other than the Class I-A-1
and Class I-A-IO Certificates).

         CROSS-OVER DATE: The Group 1 Cross-Over Date, Group 2 Cross-Over Date
or Group 3 Cross-Over Date.

                                       -6-

<PAGE>

         CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other than a
Class I-A-IO Certificate) as of any Distribution Date, the initial principal
amount of such Certificate increased by any Deferred Interest previously
allocated to such Certificate and reduced by (i) all amounts distributed on
previous Distribution Dates on such Certificate with respect to principal, (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Certificate, taking account of the Loss Allocation
Limitation of such Certificate and (iii) in the case of a Subordinate
Certificate, such Certificate's PRO RATA share, if any, of the applicable
Subordinate Certificate Writedown Amount for previous Distribution Dates. With
respect to any Class of Certificates, the Current Principal Amount thereof will
equal the sum of the Current Principal Amounts of all Certificates in such
Class. Notwithstanding the foregoing, solely for purposes of giving consents,
directions, waivers, approvals, requests and notices, the Class R Certificates
after the Distribution Date on which they receive the distribution of the last
dollar of their original principal amount shall be deemed to have a Current
Principal Amount equal to their Current Principal Amount on the day immediately
preceding such Distribution Date. The Class I-A-IO Certificates do not have a
principal balance.

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

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

         CUT-OFF DATE:  January 1, 2000.

         DCR:  Duff & Phelps Credit Rating Co. and its successors in interest.

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

         DEFERRED INTEREST: The excess of the amount of interest due on a
negatively amortizing Group 1 Mortgage Loan over the Scheduled Payment due
thereon which is permitted under the terms of the related Mortgage Note to be
added to the principal of the Mortgage Note.

         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 to the extent provided by law.

         DETERMINATION DATE: With respect to each Mortgage Loan serviced by a
Servicer, the Determination Date as defined in the related Servicing Agreement.

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

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

         DIVERTED AMOUNT: On any Distribution Date, an amount equal to any
Special Hazard Loss allocated to the Group 1, Group 2 or Group 3 Senior
Certificates, as applicable, for such date pursuant to Section 6.03(e).

         DTC CUSTODIAN: Bankers Trust Company, or its successors in interest as
custodian for the Depository.

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

                                       -8-

<PAGE>

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

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

         EVENT OF DEFAULT:  An event described in Section 8.01.

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

         FANNIE MAE: 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.

         FIRST UNION:  First Union National Bank.

         FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates (other than the Class I-A-IO Certificates), the fractional
undivided interest evidenced by any Certificate of such Class the numerator of
which is the Current Principal Amount of such Certificate and the denominator of
which is the Current Principal Amount of such Class. With respect to the Class
I-A-IO Certificates, the fractional undivided interest evidenced by such
Certificate, the numerator of which is the Notional Amount of such Certificate
and the denominator of which is the Notional Amount of such Class. With respect
to the Certificates in the aggregate, the fractional undivided interest
evidenced by (i) a Class I-A-IO Certificate will be deemed to equal 1.00%
multiplied by a fraction, the numerator of which is the current Notional Amount
of such Certificate and the denominator of which is the aggregate current
Notional Amount of such Class, (ii) a Class R-I or Class R-II Certificate will
each be deemed to equal 0.50% multiplied by a fraction, the numerator of which
is the Current Principal Amount of such Certificate and the denominator of which
is the aggregate Current Principal Amount of such respective Class and (iii) a
Certificate of any other Class will be deemed to equal 98.0% (plus an additional
1% if and when the Class I-A-IO Certificates have been paid in full prior to the
date of determination) 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).

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

                                       -9-

<PAGE>

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

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

         GMAC MORTGAGE:  GMAC Mortgage Corp.

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

         GROUP 1 AVAILABLE FUNDS, GROUP 2 AVAILABLE FUNDS or GROUP 3 AVAILABLE
FUNDS: With respect to any Distribution Date, an amount equal to the aggregate
of the following amounts with respect to the Mortgage Loans in Loan Group 1,
Loan Group 2 or Loan Group 3, respectively: (a) all previously undistributed
payments on account of principal (including the principal portion of Scheduled
Payments, Principal Prepayments and the principal portion of Net Liquidation
Proceeds) and all previously undistributed payments on account of interest
received after the Cut-off Date and on or prior to the related Determination
Date, and (b) any Monthly Advances (including Certificate Account Advances) and
Compensating Interest Payments by the Master Servicer or the applicable
Servicers with respect to such Distribution Date, except:

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

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

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

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

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

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

         In addition on each Distribution Date, the related Available Funds for
each Certificate Group shall be increased or decreased, as applicable, by any
Diverted Amount allocated thereto pursuant

                                      -10-

<PAGE>

to Section 6.03(e). The Group 1 Available Funds shall also be increased by any
Required Surety Payment.

         GROUP 1 CERTIFICATES: The Group 1 Senior Certificates and the Group 1
Subordinate Certificates.

         GROUP 2 CERTIFICATES: The Group 2 Senior Certificates and the Group 2
Subordinate Certificates.

         GROUP 3 CERTIFICATES: The Group 3 Senior Certificates and the Group 3
Subordinate Certificates.

         GROUP 1 CROSS-OVER DATE: The first Distribution Date on which the
aggregate Current Principal Amount of the Group 1 Subordinate Certificates has
been reduced to zero (giving effect to all distributions on such Distribution
Date).

         GROUP 2 CROSS-OVER DATE: The first Distribution Date on which the
aggregate Current Principal Amount of the Group 2 Subordinate Certificates has
been reduced to zero (giving effect to all distributions on such Distribution
Date).

         GROUP 3 CROSS-OVER DATE: The first Distribution Date on which the
aggregate Current Principal Amount of the Group 3 Subordinate Certificates has
been reduced to zero (giving effect to all distributions on such Distribution
Date).

         GROUP 1 CUT-OFF DATE BALANCE:  $175,580,588.66.

         GROUP 2 CUT-OFF DATE BALANCE:  $121,847,207.15.

         GROUP 3 CUT-OFF DATE BALANCE:  $150,219,388.93.

         GROUP 1 MORTGAGE LOAN: Any Mortgage Loan identified on the Mortgage
Loan Schedule as belonging to Loan Group 1.

         GROUP 2 MORTGAGE LOAN: Any Mortgage Loan identified on the Mortgage
Loan Schedule as belonging to Loan Group 2.

         GROUP 3 MORTGAGE LOAN: Any Mortgage Loan identified on the Mortgage
Loan Schedule as belonging to Loan Group 3.

         GROUP 1 ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the
aggregate Current Principal Amounts of each Class of Group 1 Subordinate
Certificates as of the Closing Date.

         GROUP 2 ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the
aggregate Current Principal Amounts of each Class of Group 2 Subordinate
Certificates as of the Closing Date.

                                      -11-

<PAGE>

         GROUP 3 ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the
aggregate Current Principal Amounts of each Class of Group 3 Subordinate
Certificates as of the Closing Date.

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

         GROUP 2 SENIOR CERTIFICATES:  The Class II-A-1 Certificates.

         GROUP 3 SENIOR CERTIFICATES:  The Class III-A-1 Certificates.

         GROUP 1 SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP 2 SENIOR OPTIMAL
PRINCIPAL AMOUNT or GROUP 3 SENIOR OPTIMAL PRINCIPAL AMOUNT: As to any
Distribution Date, an amount equal to the sum, without duplication, of:

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

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

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

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

                  (v) any Diverted Amount allocated to such Senior Optimal
         Principal Amount;

         MINUS

                                      -12-

<PAGE>

                  (vi) any Diverted Amount from such Senior Optimal Principal
         Amount for such Distribution Date.

         GROUP 1 SENIOR PERCENTAGE: Initially 95.25%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amounts of the Group 1
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 1 Mortgage Loans as of the
beginning of the related Due Period.

         GROUP 2 SENIOR PERCENTAGE: Initially 94.50%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the Current Principal Amount of the Group 2 Senior
Certificates immediately preceding such Distribution Date by the aggregate
Scheduled Principal Balance of the Group 2 Mortgage Loans as of the beginning of
the related Due Period.

         GROUP 3 SENIOR PERCENTAGE: Initially 94.50%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amounts of all the
Group 3 Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 3 Mortgage Loans as of the
beginning of the related Due Period.

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

<TABLE>
<CAPTION>
Period (dates inclusive)                           Senior Prepayment Percentage
------------------------                           ----------------------------
<S>                                                <C>
February 25, 2000 - January 25, 2007               100%

February 25, 2007 - January 25, 2008               Senior Percentage for the Group 1 Certificates plus
                                                   70% of the Group 1 Subordinate Percentage

February 25, 2008 - January 25, 2009               Senior Percentage for the Group 1 Certificates plus
                                                   60% of the Group 1 Subordinate Percentage

February 25, 2009 - January 25, 2010               Senior Percentage for the Group 1 Certificates plus
                                                   40% of the Group 1 Subordinate Percentage

February 25, 2010 - January 25, 2011               Senior Percentage for the Group 1 Certificates plus
                                                   20% of the Group 1 Subordinate Percentage

February 25, 2011 and thereafter                   Senior Percentage for the Group 1 Certificates
</TABLE>

         In addition, no reduction of the Group 1 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, either (A) (i) (x) the aggregate Scheduled
Principal Balance of the Group 1 Mortgage Loans delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and Mortgage
Loans with respect to which the related Mortgaged Property has been acquired by
the Trust), averaged over the last six months, as a percentage of the sum of the
aggregate Current Principal Amount of the

                                      -13-

<PAGE>

Group 1 Subordinate Certificates does not exceed 50%, or (y) the aggregate
Scheduled Principal Balance of the Group 1 Mortgage Loans delinquent 60 days or
more (including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Scheduled Principal Balances of the Group 1 Mortgage Loans
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Group 1 Mortgage Loans do not exceed (a) 30% of the Group
1 Original Subordinate Principal Balance if such Distribution Date occurs
between and including February 2007 and January 2008, (b) 35% of the Group 1
Original Subordinate Principal Balance if such Distribution Date occurs between
and including February 2008 and January 2009, (c) 40% of the Group 1 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2009 and January 2010, (d) 45% of the Group 1 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2010 and January 2011, and (e) 50% of the Group 1 Original
Subordinate Principal Balance if such Distribution Date occurs during or after
February 2011; or (B) (i) the aggregate Scheduled Principal Balance of the Group
1 Mortgage Loans delinquent 60 days or more (including for this purpose any such
Mortgage Loans in foreclosure and such Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, does not exceed 4.0% of the then-current aggregate Scheduled
Principal Balance of the Group 1 Mortgage Loans; and (ii) cumulative Realized
Losses on the Group 1 Mortgage Loans do not exceed (a) 10% of the Group 1
Original Subordinate Principal Balance if such Distribution Date occurs between
and including February 2007 and January 2008, (b) 15% of the Group 1 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2008 and January 2009, (c) 20% of the Group 1 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2009 and January 2010, (d) 25% of the Group 1 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2010 and January 2011, and (e) 30% of the Group 1 Original
Subordinate Principal Balance if such Distribution Date occurs during or after
February 2011.

         In addition, if the current Subordinate Percentage for the Group 1
Certificates is equal to or greater than two times the initial Subordinate
Percentage for the Group 1 Certificates, and (a) the aggregate Scheduled
Principal Balance of the Group 1 Mortgage Loans delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the sum of the aggregate Current Principal Amount of the Group 1 Subordinate
Certificates does not exceed 50% and (b) cumulative Realized Losses on the Group
1 Mortgage Loans do not exceed 10% of the Group 1 Original Subordinate Principal
Balance, then the Senior Prepayment Percentage for the Group 1 Certificates for
such Distribution Date will equal the Group 1 Senior Percentage; provided,
however, if the current Subordinate Percentage for the Group 1 Certificates is
equal to or greater than two times the initial Subordinate Percentage for the
Group 1 Certificates prior to February 25, 2003, then the Group 1 Senior
Prepayment Percentage for such Distribution Date will equal the Group 1 Senior
Percentage plus 50% of the related Subordinate Percentage.

         Notwithstanding the foregoing, if on any Distribution Date, the Group 1
Senior Percentage exceeds such Senior Percentage as of the Cut-Off Date, the
Group 1 Senior Prepayment Percentage for such Distribution Date will equal 100%.
On the Distribution Date on which the Current Principal

                                      -14-

<PAGE>

Amounts of the Group 1 Senior Certificates are reduced to zero, the Group 1
Senior Prepayment Percentage shall be the minimum percentage sufficient to
effect such reduction and thereafter shall be zero.

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

<TABLE>
<CAPTION>
Period (dates inclusive)                           Senior Prepayment Percentage
------------------------------------------------------------------------------------------------------
<S>                                                <C>
February 25, 2000 - January 25, 2010               100%

February 25, 2010 - January 25, 2011               Senior Percentage for the Group 2 Certificates plus
                                                   70% of the Group 2 Subordinate Percentage

February 25, 2011 - January 25, 2012               Senior Percentage for the Group 2 Certificates plus
                                                   60% of the Group 2 Subordinate Percentage

February 25, 2012 - January 25, 2013               Senior Percentage for the Group 2 Certificates plus
                                                   40% of the Group 2 Subordinate Percentage

February 25, 2013 - January 25, 2014               Senior Percentage for the Group 2 Certificates plus
                                                   20% of the Group 2 Subordinate Percentage

February 25, 2014 and thereafter                   Senior Percentage for the Group 2 Certificates
</TABLE>

         In addition, no reduction of the Senior Prepayment Percentage for the
Group 2 Certificates shall occur on any Distribution Date unless, as of the last
day of the month preceding such Distribution Date, either (A) (i) (x) the
aggregate Scheduled Principal Balance of the Group 2 Mortgage Loans delinquent
60 days or more (including for this purpose any such Mortgage Loans in
foreclosure and Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the last six months, as
a percentage of the sum of the aggregate Current Principal Amount of the Group 2
Subordinate Certificates does not exceed 50%, or (y) the aggregate Scheduled
Principal Balance of the Group 2 Mortgage Loans delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Scheduled Principal Balances of the Group 2 Mortgage Loans
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Group 2 Mortgage Loans do not exceed (a) 30% of the Group
2 Original Subordinate Principal Balance if such Distribution Date occurs
between and including February 2010 and January 2011, (b) 35% of the Group 2
Original Subordinate Principal Balance if such Distribution Date occurs between
and including February 2011 and January 2012, (c) 40% of the Group 2 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2012 and January 2013, (d) 45% of the Group 2 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2013 and January 2014, and (e) 50% of the Group 2 Original
Subordinate Principal Balance if such Distribution Date occurs during or after
February 2014; or (B) (i) the aggregate Scheduled Principal Balance of Group 2
Mortgage Loans delinquent 60 days or more (including for this purpose any such
Mortgage Loans in foreclosure and such Mortgage Loans with respect to which the
related Mortgaged Property has

                                      -15-

<PAGE>

been acquired by the Trust), averaged over the last six months, does not exceed
4.0% of the then-current aggregate Scheduled Principal Balance of the Group 2
Mortgage Loans; and (ii) cumulative Realized Losses on the Group 2 Mortgage
Loans do not exceed (a) 10% of the Group 2 Original Subordinate Principal
Balance if such Distribution Date occurs between and including February 2010 and
January 2011, (b) 15% of the Group 2 Original Subordinate Principal Balance if
such Distribution Date occurs between and including February 2011 and January
2012, (c) 20% of the Group 2 Original Subordinate Principal Balance if such
Distribution Date occurs between and including February 2012 and January 2013,
(d) 25% of the Group 2 Original Subordinate Principal Balance if such
Distribution Date occurs between and including February 2013 and January 2014,
and (e) 30% of the Group 2 Original Subordinate Principal Balance if such
Distribution Date occurs during or after February 2014.

         In addition, if (i) the current Subordinate Percentage for the Group 2
Certificates is equal to or greater than two times the initial Subordinate
Percentage for the Group 2 Certificates and (ii):

                  (a) such Distribution Date occurs on or after February 2000
         but on or before January 2003 and (x) the aggregate Scheduled Principal
         Balance of the Group 2 Mortgage Loans, delinquent 60 days or more
         (including for this purpose any such Mortgage Loans in foreclosure and
         such Mortgage Loans with respect to which the related Mortgaged
         Property has been acquired by the Trust) as a percentage of the
         aggregate Scheduled Principal Balance of the Group 2 Mortgage Loans
         does not exceed 2.0% and (y) cumulative Realized Losses on the Group 2
         Mortgage Loans do not exceed 10% of the Group 2 Original Subordinate
         Principal Balance,

                  (b) such Distribution Date occurs on or after February 2003
         but on and before January 2006 and (x) the aggregate Scheduled
         Principal Balance of the Group 2 Mortgage Loans, delinquent 60 days or
         more (including for this purpose any such Mortgage Loans in foreclosure
         and such Mortgage Loans with respect to which the related Mortgaged
         Property has been acquired by the Trust) as a percentage of the
         aggregate Scheduled Principal Balance of the Group 2 Mortgage Loans
         does not exceed 3.0% and (y) cumulative Realized Losses on the Group 2
         Mortgage Loans do not exceed 12% of the Group 2 Original Subordinate
         Principal Balance, or

                  (c) such Distribution Date occurs on or after February 2006
         and (x) the aggregate Scheduled Principal Balance of the Group 2
         Mortgage Loans, delinquent 60 days or more (including for this purpose
         any such Mortgage Loans in foreclosure and such Mortgage Loans with
         respect to which the related Mortgaged Property has been acquired by
         the Trust) as a percentage of the aggregate Scheduled Principal Balance
         of the Group 2 Mortgage Loans does not exceed 4.0% and (y) cumulative
         Realized Losses on the Group 2 Mortgage Loans do not exceed 15% of the
         Group 2 Original Subordinate Principal Balance,

then the Senior Prepayment Percentage for the Group 2 Certificates for such
Distribution Date will equal the applicable Senior Percentage for the Group 2
Certificates, provided, however, if the current Subordinate Percentage for the
Group 2 Certificates is equal to or greater than two times the initial
Subordinate Percentage for the Group 2 Certificates prior to February 25, 2003,
then the Senior Prepayment Percentage for the Group 2 Certificates for such
Distribution Date will equal the Senior

                                      -16-

<PAGE>

Percentage for the Group 2 Certificates plus 50% of the Subordinate Percentage
for the Group 2 Certificates.

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

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

<TABLE>
<CAPTION>
Period (dates inclusive)                           Senior Prepayment Percentage
------------------------                           ----------------------------
<S>                                                <C>
February 25, 2000 - January 25, 2010               100%

February 25, 2010 - January 25, 2011               Senior Percentage for the Group 3 Certificates plus
                                                   70% of the Group 3 Subordinate Percentage

February 25, 2011 - January 25, 2012               Senior Percentage for the Group 3 Certificates plus
                                                   60% of the Group 3 Subordinate Percentage

February 25, 2012 - January 25, 2013               Senior Percentage for the Group 3 Certificates plus
                                                   40% of the Group 3 Subordinate Percentage

February 25, 2013 - January 25, 2014               Senior Percentage for the Group 3 Certificates plus
                                                   20% of the Group 3 Subordinate Percentage

February 25, 2014 and thereafter                   Senior Percentage for the Group 3 Certificates
</TABLE>

         In addition, no reduction of the Senior Prepayment Percentage for the
Group 3 Certificates shall occur on any Distribution Date unless, as of the last
day of the month preceding such Distribution Date, either (A) (i) (x) the
aggregate Scheduled Principal Balance of the Group 3 Mortgage Loans delinquent
60 days or more (including for this purpose any such Mortgage Loans in
foreclosure and Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the last six months, as
a percentage of the sum of the aggregate Current Principal Amount of the Group 3
Subordinate Certificates does not exceed 50%, or (y) the aggregate Scheduled
Principal Balance of the Group 3 Mortgage Loans delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Scheduled Principal Balances of the Group 3 Mortgage Loans
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Group 3 Mortgage Loans do not exceed (a) 30% of the Group
3 Original Subordinate Principal Balance if such Distribution Date occurs
between and including February 2010 and January 2011, (b) 35% of the Group 3
Original Subordinate Principal Balance if such Distribution Date occurs between
and including February 2011 and January 2012, (c) 40% of the Group 3 Original
Subordinate Principal Balance if such Distribution Date occurs between and

                                      -17-

<PAGE>

including February 2012 and January 2013, (d) 45% of the Group 3 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2013 and January 2014, and (e) 50% of the Group 3 Original
Subordinate Principal Balance if such Distribution Date occurs during or after
February 2014; or (B) (i) the aggregate Scheduled Principal Balance of Group 3
Mortgage Loans delinquent 60 days or more (including for this purpose any such
Mortgage Loans in foreclosure and such Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, does not exceed 4.0% of the then-current aggregate Scheduled
Principal Balance of the Group 3 Mortgage Loans; and (ii) cumulative Realized
Losses on the Group 3 Mortgage Loans do not exceed (a) 10% of the Group 3
Original Subordinate Principal Balance if such Distribution Date occurs between
and including February 2010 and January 2011, (b) 15% of the Group 3 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2011 and January 2012, (c) 20% of the Group 3 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2012 and January 2013, (d) 25% of the Group 3 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2013 and January 2014, and (e) 30% of the Group 3 Original
Subordinate Principal Balance if such Distribution Date occurs during or after
February 2014.

         In addition, if (i) the current Subordinate Percentage for the Group 3
Certificates is equal to or greater than two times the initial Subordinate
Percentage for the Group 3 Certificates and (ii):

                  (a) such Distribution Date occurs on or after February 2000
         but on or before January 2003 and (x) the aggregate Scheduled Principal
         Balance of the Group 3 Mortgage Loans, delinquent 60 days or more
         (including for this purpose any such Mortgage Loans in foreclosure and
         such Mortgage Loans with respect to which the related Mortgaged
         Property has been acquired by the Trust) as a percentage of the
         aggregate Scheduled Principal Balance of the Group 3 Mortgage Loans
         does not exceed 2.0% and (y) cumulative Realized Losses on the Group 3
         Mortgage Loans do not exceed 10% of the Group 3 Original Subordinate
         Principal Balance,

                  (b) such Distribution Date occurs on or after February 2003
         but on and before January 2006 and (x) the aggregate Scheduled
         Principal Balance of the Group 3 Mortgage Loans, delinquent 60 days or
         more (including for this purpose any such Mortgage Loans in foreclosure
         and such Mortgage Loans with respect to which the related Mortgaged
         Property has been acquired by the Trust) as a percentage of the
         aggregate Scheduled Principal Balance of the Group 3 Mortgage Loans
         does not exceed 3.0% and (y) cumulative Realized Losses on the Group 3
         Mortgage Loans do not exceed 12% of the Group 3 Original Subordinate
         Principal Balance, or

                  (c) such Distribution Date occurs on or after February 2006
         and (x) the aggregate Scheduled Principal Balance of the Group 3
         Mortgage Loans, delinquent 60 days or more (including for this purpose
         any such Mortgage Loans in foreclosure and such Mortgage Loans with
         respect to which the related Mortgaged Property has been acquired by
         the Trust) as a percentage of the aggregate Scheduled Principal Balance
         of the Group 3 Mortgage Loans does not exceed 4.0% and (y) cumulative
         Realized Losses on the Group 3 Mortgage Loans do not exceed 15% of the
         Group 3 Original Subordinate Principal Balance,

                                      -18-

<PAGE>

then the Senior Prepayment Percentage for the Group 3 Certificates for such
Distribution Date will equal the applicable Senior Percentage for the Group 3
Certificates, provided, however, if the current Subordinate Percentage for the
Group 3 Certificates is equal to or greater than two times the initial
Subordinate Percentage for the Group 3 Certificates prior to February 25, 2003,
then the Senior Prepayment Percentage for the Group 3 Certificates for such
Distribution Date will equal the Senior Percentage for the Group 3 Certificates
plus 50% of the Subordinate Percentage for the Group 3 Certificates.

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

         GROUP 3 SERVICING AGREEMENT: One of the following Servicing Agreements,
attached hereto as Exhibits N-8 through N-10: (i) the Mortgage Loan Purchase and
Servicing Agreement dated as of October 30, 1997, between Citicorp Mortgage Inc.
and BSMCC; (ii) the Master Servicing Agreement dated as of December 15, 1999,
between MLCC and EMC; and (iii) The Servicing Agreement dated as of December 1,
1999, between GMAC Mortgage and Thornburg Mortgage, Inc.; in each case to the
extent such Servicing Agreement relates to the Group 3 Mortgage Loans.

         GROUP 1 SUBORDINATE CERTIFICATE: A Class I-B-1, Class I-B-2, Class
I-B-3, Class I-B-4, Class I-B-5 or Class I-B-6 Certificate.

         GROUP 2 SUBORDINATE CERTIFICATE: A Class II-B-1, Class II-B-2, Class
II-B-3, Class II-B-4, Class II-B-5 or Class II-B-6 Certificate.

         GROUP 3 SUBORDINATE CERTIFICATE: A Class III-B-1, Class III-B-2, Class
III-B-3, Class III-B-4, Class III-B-5 or Class III-B-6 Certificate.

         GROUP 1 SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any
Distribution Date, the amount by which (a) the sum of the Current Principal
Amounts of all the Group 1 Certificates (after giving effect to the distribution
of principal and the allocation of applicable Realized Losses in reduction of
the Current Principal Amounts of such Group 1 Certificates on such Distribution
Date) exceeds (b) the aggregate Scheduled Principal Balances of the Group 1
Mortgage Loans on the Due Date related to such Distribution Date.

         GROUP 2 SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any
Distribution Date, the amount by which (a) the sum of the Current Principal
Amounts of all the Group 2 Certificates (after giving effect to the distribution
of principal and the allocation of applicable Realized Losses in reduction of
the Current Principal Amounts of such Group 2 Certificates on such Distribution
Date) exceeds (b) the aggregate Scheduled Principal Balances of the Group 2
Mortgage Loans on the Due Date related to such Distribution Date.

                                      -19-

<PAGE>

         GROUP 3 SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any
Distribution Date, the amount by which (a) the sum of the Current Principal
Amounts of all the Group 3 Certificates (after giving effect to the distribution
of principal and the allocation of applicable Realized Losses in reduction of
the Current Principal Amounts of such Group 3 Certificates on such Distribution
Date) exceeds (b) the aggregate Scheduled Principal Balances of the Group 3
Mortgage Loans on the Due Date related to such Distribution Date.

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

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

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

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

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

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

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

         GROUP 2 SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution
Date, an amount equal to the sum, without duplication, of the following (but in
no event greater than the aggregate

                                      -20-

<PAGE>

Current Principal Amounts of the Group 2 Subordinate Certificates immediately
prior to such Distribution Date):

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

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

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

                  (iv) the applicable Group 2 Subordinate Prepayment Percentage
         of the sum of (a) the Scheduled Principal Balance of each Group 2
         Mortgage Loan or REO Property which was purchased with respect to such
         Distribution Date and (b) the difference, if any, between the Scheduled
         Principal Balance of a Group 2 Mortgage Loan that has been replaced
         with a Substitute Mortgage Loan on such Distribution Date over the
         Scheduled Principal Balance of such Substitute Mortgage Loan; and

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

After the aggregate current Principal Amounts of the Group 2 Subordinate
Certificates have been reduced to zero, the Group 2 Subordinate Optimal
Principal Amount shall be zero.

         GROUP 3 SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution
Date, an amount equal to the sum, without duplication, of the following (but in
no event greater than the aggregate Current Principal Amounts of the Group 3
Subordinate Certificates immediately prior to such
Distribution Date):

                  (i) the applicable Group 3 Subordinate Percentage of the
         principal portion of all Scheduled Payments due on each Outstanding
         Mortgage Loan in Loan Group 3 on the related Due Date as specified in
         the amortization schedule at the time applicable thereto (after
         adjustment for previous Principal Prepayments but before any adjustment
         to such amortization schedule by reason of any bankruptcy or similar
         proceeding or any moratorium or similar waiver or grace period);

                                      -21-

<PAGE>

                  (ii) the applicable Group 3 Subordinate Prepayment Percentage
         of each Principal Payment in part during the related Prepayment Period
         with respect to each Group 3 Mortgage Loan and the applicable Group 3
         Subordinate Prepayment Percentage of the Scheduled Principal Balance of
         each Group 3 Mortgage Loan that was the subject of a Principal
         Prepayment in full during the related Prepayment Period;

                  (iii) the excess, if any, of (A) all Net Liquidation Proceeds
         with respect to the Group 3 Mortgage Loans allocable to principal
         received during the related Prepayment Period over (B) the sum of the
         amounts distributable pursuant to clause (iii) of the definition of
         Group 3 Senior Optimal Principal Amount on such Distribution Date;

                  (iv) the applicable Group 3 Subordinate Prepayment Percentage
         of the sum of (a) the Scheduled Principal Balance of each Group 3
         Mortgage Loan or REO Property which was purchased with respect to such
         Distribution Date and (b) the difference, if any, between the Scheduled
         Principal Balance of a Group 3 Mortgage Loan that has been replaced
         with a Substitute Mortgage Loan on such Distribution Date over the
         Scheduled Principal Balance of such Substitute Mortgage Loan; and

                  (v) on the Distribution Date on which the Current Principal
         Amounts of the Group 3 Senior Certificates have all been reduced to
         zero, 100% of any Group 3 Senior Optimal Principal Amount.

After the aggregate current Principal Amounts of the Group 3 Subordinate
Certificates have been reduced to zero, the Group 3 Subordinate Optimal
Principal Amount shall be zero.

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

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

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

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

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

                                      -22-

<PAGE>

         GROUP 3 SUBORDINATE PREPAYMENT PERCENTAGE: On any Distribution Date,
100% minus the Group 3 Senior Prepayment Percentage, except that on any
Distribution Date after the Current Principal Amounts of the Group 3 Senior
Certificates have each been reduced to zero, the Group 3 Subordinate Prepayment
Percentage will equal 100%.

         HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 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 the Custodian, 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 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.

         INSURER:  Any issuer of an Insurance Policy.

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

                                      -23-

<PAGE>

         INTEREST RATE ADJUSTMENT DATE: With respect to each Mortgage Loan, the
date on which the Mortgage Interest Rate is adjusted.

         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 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;

                  (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; and

                  (d) With respect to any Class of Group 1 Certificates, any
         Deferred Interest allocated thereto pursuant to Section 6.02.

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

         LIQUIDATED MORTGAGE LOAN: Any 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 Servicer and not recovered by the Master Servicer or the
related Servicer under any FHA insurance, VA guarantee or Primary Mortgage
Insurance Policy for reasons other than the Master Servicer's or the related

                                      -24-

<PAGE>

Servicer's failure to ensure the maintenance of or compliance with any related
FHA insurance, VA guarantee or 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 Mortgage Loan, whether through trustee's sale, foreclosure sale, Insurance
Proceeds, condemnation proceeds or otherwise, including any FHA insurance or VA
guarantee.

         LOAN GROUP:  Loan Group 1, Loan Group 2 or Loan Group 3.

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

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

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

         LOAN SUMMARY AND REMITTANCE REPORT: The report to be submitted by the
Master Servicer to the Trustee pursuant to Subsection 6.05(a).

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

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

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

         MASTER SERVICER: As of the Closing Date, Norwest Bank Minnesota,
National Association and, thereafter, its respective successors in interest who
meet the qualifications pursuant to this Agreement.

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

         MASTER SERVICING FEE RATE: As to any Mortgage Loan, a per annum rate
equal to 0.01625%.

         MLCC:  Merrill Lynch Credit Corp.

                                      -25-

<PAGE>

         MONTHLY ADVANCE: An advance (including a Certificate Account Advance)
of principal or interest required to be made by the applicable Servicer or, in
the case of the First Union Loans, the applicable First Union subservicer
pursuant to the related Servicing Agreement or the Master
Servicer pursuant to Section 6.07.

         MOODY'S: Moody's Investors Service, Inc. and its successors in
interest.

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

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

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

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

         MORTGAGE LOAN SCHEDULE: With respect to each Loan Group, the schedule,
attached hereto as Exhibits B-1, B-2 and B-3, respectively, with respect to the
Mortgage Loans in such Loan Group 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 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 Date; (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 Date, after
deduction of the payments of principal due on or before the Cut-off Date,
whether or not collected; (14) the Index; (15) the next Interest Rate Adjustment
Date; (16) the Gross Margin; (17) the minimum and maximum Mortgage Interest Rate
under the terms of the Mortgage Note; (18) the date on which the first Scheduled
Payment was due; (19) the periodic rate cap; (20) a code indicating whether the
Mortgaged Property is owner-occupied, a second home or an investment property;
(21) a code indicating the purpose of the loan; (22) the related Servicing Fee
Rate; (23) the related Servicer; (24) a code indicating whether the Mortgage
Loan is a negatively

                                      -26-

<PAGE>

amortizing Mortgage Loan and (25) whether or not such Mortgage Loan is 60 to 89
days delinquent. With respect to each Loan Group 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 Servicer in accordance with the related 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 related Servicing Fee Rate.

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

         NOTIONAL AMOUNT: On any Distribution Date, with respect to the Class
I-A-IO Certificates, an amount equal to the Current Principal Amount of the
Class I-A-1 Certificates.

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

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

         ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The Group 1 Original
Subordinate Principal Balance, Group 2 Original Subordinate Principal Balance or
Group 3 Original Subordinate Principal Balance.

                                      -27-

<PAGE>

         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
Seller.

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

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

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

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

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

                                      -28-

<PAGE>

                  (iv) securities bearing interest or sold at a discount issued
         by any corporation (including the Trustee or the Master Servicer)
         incorporated under the laws of the United States of America or any
         state thereof that have the Applicable Credit Rating or better from
         each Rating Agency at the time of such investment or contractual
         commitment providing for such investment; PROVIDED, HOWEVER, that
         securities issued by any particular corporation will not be Permitted
         Investments to the extent that investments therein will cause the then
         outstanding principal amount of securities issued by such corporation
         and held as part of the Trust to exceed 10% of the aggregate
         Outstanding Principal Balances of all the Mortgage Loans and Permitted
         Investments held as part of the Trust;

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

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

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

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

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

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

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

         PHYSICAL CERTIFICATES: Initially, the Residual Certificates and the
Private Certificates.

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

                                      -29-

<PAGE>

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

         PRIVATE CERTIFICATES: Any Class I-B-4, Class I-B-5, Class I-B-6, Class
II-B-4, Class II-B-5, Class II-B-6, Class III-B-4, Class III-B-5 or Class
III-B-6 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
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, Moody's and DCR.

         RATING AGENCY ELIGIBLE ACCOUNT: An account, including one maintained
with the Trustee or the Master Servicer, which either (i) is a trust account
maintained with the corporate trust department of a depository institution or
trust company (including, without limitation, the Trustee) organized under the
laws of the United States of America or any one of the states thereof or the
District of Columbia which is not affiliated with any Servicer, (ii) is
maintained with an entity which is an institution whose deposits are insured by
the FDIC, the unsecured and uncollateralized long-term debt obligations of which
shall be rated "A2" or higher by Moody's or "A" or higher by S&P and DCR, or one
of the two highest short-term ratings by each Rating Agency, and which is either
(a) a federal savings association duly organized, validly existing and in good
standing under the federal banking laws, (b) an institution duly organized,
validly existing and in good standing under the applicable banking laws of any
state, (c) a national banking association under the federal banking laws, or (d)
a principal subsidiary of a bank holding company, or (iii) otherwise meets the
requirements of each Rating Agency for the maintenance of the ratings on the
Certificates.

                                      -30-

<PAGE>

         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 to the extent that such
interest does not constitute Deferred Interest that has been added to the
principal balance of any Group 1 Mortgage Loan, as the case may be, LESS (y) the
related Net Liquidation Proceeds with respect to such Mortgage Loan.

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

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

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

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

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

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

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

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

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

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

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

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

                                      -31-

<PAGE>

         REMIC PROVISIONS: The provisions of the federal income tax law relating
to the 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, 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.

         REQUIRED SURETY PAYMENT: With respect to any Additional Collateral
Mortgage Loan that becomes a Liquidated Mortgage Loan, the lesser of (i) the
principal portion of the Realized Loss with respect to such Mortgage Loan and
(ii) the excess, if any, of (a) the amount of Additional Collateral required at
origination with respect to such Mortgage Loan over (b) the net proceeds
realized by the related Servicer from the related Additional Collateral.

         RESIDUAL CERTIFICATES:  The Class R Certificates.

         RESPONSIBLE OFFICER: Any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement 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 Certificate that is no longer a Book-Entry Certificate which is a
Qualified Institutional Buyer as defined under Rule 144A promulgated under the
Securities Act, substantially in the form set forth as Exhibit F-2
hereto.

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

                                      -32-

<PAGE>

         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) plus (ii) in the case of each Group 1 Mortgage Loan which negatively
amortizes, any Deferred Interest added to principal through such Due Date and
less (iii) 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 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

                                      -33-

<PAGE>

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

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

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

         SENIOR CERTIFICATES: The Group 1 Senior Certificates, Group 2 Senior
Certificates or Group 3 Senior Certificates.

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

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

         SERIES REMIC: Any of REMIC I or REMIC II.

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

         SERVICER: With respect to the Group 1 Mortgage Loans, EMC, Chase
Manhattan Mortgage Corp., Citicorp Mortgage Inc., Countrywide Home Loans, Inc.,
SouthTrust, Alliance Mortgage Corporation, First Union Mortgage Corporation or
Cendant Mortgage Corporation, as indicated on the Mortgage Loan Schedule. With
respect to the Group 2 Mortgage Loans, MLCC. With respect to the Group 3
Mortgage Loans, MLCC, GMAC Mortgage or SouthTrust Mortgage Corporation, as
indicated on the Mortgage Loan Schedule.

         SERVICING AGREEMENT: One of the following agreements, attached hereto
as Exhibits N-1 through N-10: (i) The Purchase, Warranties and Servicing
Agreement, dated as of September 1,

                                      -34-

<PAGE>

1999, between Chase Manhattan Mortgage Corp. and BSMCC; (ii) The Servicing
Agreement dated as of January 1, 2000, between EMC and Bankers Trust Company;
(iii) the Servicing Agreement dated as of January 1, 2000, between Alliance
Mortgage Corporation and BSMCC; (iv) The BSMCC Seller/Servicer Contract (the
"Contract"), dated January 21, 1991 between Countrywide Home Loans, Inc. and
BSMCC and the BSMCC Seller and Servicer Guides (together with the Contract, the
"Countrywide Servicing Agreement"); (v) the Servicing Agreement dated as of
January 1, 2000, between First Union Mortgage Corporation and BSMCC; (vi) the
three Seller's Warranties and Servicing Agreements dated as of August 1, 1997,
September 1, 1997 and November 1, 1997, each between SouthTrust and BSMCC; (vii)
the Purchase, Warranties and Servicing Agreement dated as of May 1, 1998,
between Cendant Mortgage Corporation and BSMCC; (viii) the Mortgage Loan
Purchase and Servicing Agreement dated as of October 30, 1997, between Citicorp
Mortgage Inc. and BSMCC; (ix) the Master Servicing Agreement dated as of
December 15, 1999, between MLCC and EMC; and (x) The Servicing Agreement dated
as of December 1, 1999, between GMAC Mortgage and Thornburg Mortgage, Inc.

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

         SERVICING FEE RATE: A per annum rate with respect to each Mortgage
Loan, as set forth on the Mortgage Loan Schedule.

         SERVICING OFFICER: Any officer of the Master Servicer or any Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and specimen signature has been furnished to the
Trustee and the Custodian in an Officer's Certificate.

         SOUTHTRUST:  SouthTrust Mortgage Corporation

         SPECIAL HAZARD LOSS: A Realized Loss attributable to damage or a direct
physical loss suffered by a Mortgaged Property (including any Realized Loss due
to the presence or suspected presence of hazardous wastes or substances on a
Mortgaged Property) other than any such damage or loss covered by a hazard
policy or a flood insurance policy required to be maintained in respect of such
Mortgaged Property under this Agreement or any loss due to normal wear and tear
or certain other causes as reported by the applicable Servicer.

         STARTUP DAY:  January 28, 2000.

         SUBORDINATE CERTIFICATES: The Group 1 Subordinate Certificates, Group 2
Subordinate Certificates or Group 3 Subordinate Certificates.

         SUBORDINATE PERCENTAGE: The Group 1 Subordinate Percentage, Group 2
Subordinate Percentage or Group 3 Subordinate Percentage.

         SUBORDINATE PREPAYMENT PERCENTAGE: The Group 1 Subordinate Prepayment
Percentage, Group 2 Subordinate Prepayment Percentage or Group 3 Subordinate
Prepayment Percentage.

                                      -35-

<PAGE>

         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 materially 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.

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

         TAX ADMINISTRATION AND TAX MATTERS PERSON: The 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 the respective Series REMICs
created by this Agreement, as more particularly set forth in Section 9.13
hereof.

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

         TRUSTEE: Bankers Trust Company, or its successor in interest, or any
successor trustee appointed as herein provided.

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

                                      -36-

<PAGE>

         VA:  Veteran's Administration, or any successor thereto.

                                      -37-

<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, and including the proceeds from the liquidation
of Additional Collateral for any Additional Collateral Mortgage Loans; (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 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), and the interest in the Surety Bond
transferred to the Trustee pursuant to Section 2.03(d), (vi) the rights with
respect to the Servicing Agreements as assigned to the Trustee on behalf of the
Certificateholders by the Assignment Agreements, (vii) the Mortgage Loan
Purchase Agreement and the Group 3 Servicing Agreements to the extent provided
in Subsection 2.03(a), (viii) the proceeds from any insurance provided by the
FHA and VA, and (ix) any proceeds of the foregoing. Although it is the intent of
the parties to this Agreement that the conveyance of the Seller's right, title
and interest in and to the Mortgage Loans and other assets in the Trust Fund
pursuant to this Agreement shall constitute a purchase and sale and not a loan,
in the event that such conveyance is deemed to be a loan, it is the intent of
the parties to this Agreement that the Seller shall be deemed to have granted to
the Trustee a first priority perfected security interest in all of the Seller's
right, title and interest in, to and under the Mortgage Loans and other assets
in the Trust Fund, and that this Agreement shall constitute a security agreement
under applicable law.

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

                                      -38-

<PAGE>

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

PROVIDED, HOWEVER, that in lieu of the foregoing, the Seller may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording and have
not been returned to the Seller in time to permit their delivery as specified
above, the Seller may deliver a true copy thereof with a certification by the
Seller or the related Servicer, on the face of such copy, substantially as
follows: "Certified to be a true and correct copy of the original, which has
been transmitted for recording"; (y) in lieu of the Security Instrument,
assignment to the Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced by a
certification from the Seller or the related Servicer, to such effect) the
Seller may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each as identified in the list delivered
by the Seller to the Trustee or Custodian on the Closing Date and set forth in
Exhibit K hereto, the Seller may deliver a lost note affidavit and, if
available, a copy of each original Mortgage Note; and PROVIDED, FURTHER,
HOWEVER, that in the case of Mortgage Loans which have been prepaid in full
after the Cut-off Date and prior to the Closing Date, the Seller, in lieu of
delivering the above documents, may deliver to the Trustee or Custodian a
certification to such effect and shall deposit all amounts paid in respect of
such Mortgage Loans in the Certificate Account on the Closing Date. The Seller
shall deliver such original documents (including any original documents as to
which certified copies had previously been delivered) to the Trustee or
Custodian promptly after they are received. The Seller shall cause, at its
expense, the assignment of the Security Instrument to the Trustee to be recorded
not later than 180 days after the Closing Date. With respect to the Cooperative
Loans, the Seller will, promptly after the Closing Date, cause the related
financing statements (if not yet filed) and an assignment thereof from the
Seller to the Trustee to be filed in the appropriate offices. The Seller need
not cause to be recorded any assignment in any jurisdiction under the laws of
which, as evidenced by an Opinion of Counsel

                                      -39-

<PAGE>

delivered by the Seller to the Trustee, the Custodian and the Rating Agencies,
the recordation of such assignment is not necessary to protect the Trustee's
interest in the related Mortgage Loan; PROVIDED, HOWEVER, notwithstanding the
delivery of any Opinion of Counsel, each assignment shall be submitted for
recording by the Seller in the manner described above, at no expense to the
Trust, the Trustee or the Custodian, upon the earliest to occur of: (i)
reasonable direction by the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust, (ii) the
occurrence of a Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Seller, (iv) the occurrence of a
servicing transfer as described in Section 8.02 hereof and (v) if the Seller is
not the Master Servicer and with respect to any one assignment, the occurrence
of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the
related Mortgage. Notwithstanding the foregoing, if the Seller fails to pay the
cost of recording the assignments, such expense will be paid by the Trustee and
the Trustee shall be reimbursed for such expenses by the Trust.

         Section 2.02. ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust to it by the Seller
and declares that it will hold (or cause the Custodian as its agent to 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, or a Custodian as its
agent, constituting the Mortgage Files, and that it, or a Custodian as its
agent, holds or will hold such other assets included in the definition of "Trust
Fund" (to the extent delivered or assigned to the Trustee or the Custodian), and
the rights of EMC with respect to any Additional Collateral and the Surety Bond
assigned to the Trustee pursuant to Section 2.03(d), in trust for the use and
benefit of all present and future Holders of the Certificates. On the Closing
Date, the Trustee, with respect to the Group 3 Mortgage Loans, and the
Custodian, with respect to the Group 1 and Group 2 Mortgage Loans, shall
acknowledge with respect to each Mortgage Loan by an Initial Certification
substantially in the form of Exhibit One to the Custodial Agreement receipt of
the Mortgage File, but without review of such Mortgage File, except to the
extent necessary to confirm that such Mortgage File contains the related
Mortgage Note or lost note affidavit. Within five Business Days after the
Closing Date, the Trustee shall deliver the Mortgage Files with respect to the
Group 3 Mortgage Loans to the Custodian. 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 or Custodian thereof), the Trustee agrees,
for the benefit of the Certificateholders, to review or cause to be reviewed by
a Custodian on its behalf (such Custodian so obligated under a Custodial
Agreement), each Mortgage File delivered to it and to execute and deliver, or
cause to be executed and delivered, to the Seller and the Master Servicer an
Interim Certification substantially in the form annexed as Exhibit Two to the
Custodial Agreement; PROVIDED, HOWEVER, if the Trustee does not deliver any of
the Mortgage Files with respect to the Group 3 Mortgage Loans within the time
specified above, the Custodian shall be required to deliver such Interim
Certification within 45 days after receipt of such Mortgage Files. In conducting
such review, the Trustee or Custodian 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-1, B-2 and B-3 to this Agreement, as supplemented. In performing any such
review, the Trustee or Custodian may conclusively rely on the purported due
execution and genuineness of any such document and on the purported genuineness
of any signature thereon. If the Trustee or Custodian finds any document
constituting part of the Mortgage File not to have been executed or

                                      -40-

<PAGE>

received, or to be unrelated to the Mortgage Loans identified in Exhibits B-1,
B-2 and B-3 or to appear to be defective on its face, the Trustee or Custodian
(the Custodian being so obligated under a Custodial Agreement) shall promptly
notify the Mortgage Loan Seller, with respect to a Group 1 or Group 2 Mortgage
Loan, or EMC, SouthTrust or MLCC, as applicable, with respect to a Group 3
Mortgage Loan. With respect to a Group 1 or Group 2 Mortgage Loan, the Mortgage
Loan Seller shall correct or cure any such defect within 90 days from the date
of notice from the Trustee or Custodian of the defect and if the Mortgage Loan
Seller fails to correct or cure the defect within such period, and such defect
materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, the Mortgage Loan Seller will, subject to Section 2.04,
within 90 days from the Trustee's or Custodian's notification purchase such
Mortgage Loan at the Repurchase Price; PROVIDED, HOWEVER, that if such defect
relates solely to the inability of the Mortgage Loan Seller to deliver the
original Security Instrument or intervening assignments thereof, or a certified
copy because the originals of such documents, or a certified copy have not been
returned by the applicable jurisdiction, the Mortgage Loan Seller shall not be
required to purchase such Mortgage Loan if the Mortgage Loan Seller delivers
such original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date. The foregoing repurchase obligation
shall not apply in the event that the Mortgage Loan Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the applicable jurisdiction because such document has not
been returned by such office; provided that the Mortgage Loan Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or Custodian shall be
effected by the Mortgage Loan Seller within thirty days of its receipt of the
original recorded document. With respect to a Group 3 Mortgage Loan, the Trustee
shall enforce the obligation of GMAC Mortgage, SouthTrust or MLCC, as
applicable, to cure, repurchase or substitute for the related Mortgage Loan
under the related Group 3 Servicing Agreement.

         (b) No later than 180 days after the Closing Date, the Trustee or
Custodian will review, for the benefit of the Certificateholders, the Mortgage
Files delivered to it and will execute and deliver or cause to be executed and
delivered to the Seller and the Master Servicer a Final Certification
substantially in the form annexed Exhibit Three to the Custodial Agreement. In
conducting such review, the Trustee or Custodian will ascertain whether an
original of each document required to be recorded has been returned from the
recording office with evidence of recording thereon or a certified copy has been
obtained from the recording office. If the Trustee or Custodian finds any
document constituting part of the Mortgage File has not been received, or to be
unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans identified in Exhibit B or to
appear defective on its face, the Trustee or Custodian (the Custodian being so
obligated under the Custodial Agreement) shall promptly notify the Mortgage Loan
Seller, with respect to a Group 1 or Group 2 Mortgage Loan, or GMAC Mortgage,
SouthTrust or MLCC, as applicable, with respect to a Group 3 Mortgage Loan. With
respect to a Group 1 or Group 2 Mortgage Loan, the Mortgage Loan Seller shall
correct or cure any such defect or shall deliver to the Trustee or Custodian an
Opinion of Counsel to the effect that such defect does not materially or
adversely affect the interests of Certificateholders in such Mortgage Loan
within 90 days from the date of notice from the Trustee or Custodian of the
defect and if the Mortgage Loan Seller is unable to cure such defect within such
period, and if such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Mortgage Loan Seller shall,
subject to Section 2.04, within 90 days from the Trustee's or

                                      -41-

<PAGE>

Custodian's notification purchase such Mortgage Loan at the Repurchase Price,
PROVIDED, HOWEVER, that if such defect relates solely to the inability of the
Mortgage Loan Seller to deliver the original Security Instrument or intervening
assignments thereof, or a certified copy, because the originals of such
documents. or a certified copy, have not been returned by the applicable
jurisdiction, the Mortgage Loan Seller shall not be required to purchase such
Mortgage Loan, if the Mortgage Loan Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date. With respect to a Group 3 Mortgage Loan, the Trustee shall
enforce the obligation of GMAC Mortgage, SouthTrust or MLCC, as applicable, to
cure, repurchase or substitute for the related Mortgage Loan under the related
Group 3 Servicing Agreement.

         (c) In the event that a Group 1 or Group 2 Mortgage Loan is purchased
by the Mortgage Loan Seller in accordance with Subsections 2.02(a) or (b) above,
the Mortgage Loan Seller shall provide the Repurchase Price to the Trustee for
deposit in the Certificate Account and shall provide to the Trustee written
notification detailing the components of the Repurchase Price. Upon deposit of
the Repurchase Price in the Certificate Account, the Trustee or Custodian shall
release to the Mortgage Loan Seller the related Mortgage File and shall execute
and deliver all instruments of transfer or assignment, without recourse,
furnished to it by the Mortgage Loan Seller as are necessary to vest in the
Mortgage Loan Seller title to and rights under the Mortgage Loan. Such purchase
shall be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Trustee shall amend the Mortgage
Loan Schedule, which was previously delivered to it by Seller in a form agreed
to between the Seller and the Trustee, to reflect such repurchase and shall
promptly notify the Master Servicer and the Rating Agencies of such amendment.
The obligation of the Mortgage Loan Seller to repurchase any Mortgage Loan as to
which such a defect in a constituent document exists shall be the sole remedy
respecting such defect available to the Certificateholders or to the Trustee on
their behalf.

         (d) In the event that a Group 3 Mortgage Loan is purchased by the
Mortgage Loan Seller in accordance with Subsections 2.02(a) or (b) above, the
Trustee shall deposit the proceeds in the Certificate Account. Upon deposit of
such proceeds in the Certificate Account, the Trustee or Custodian shall release
to MLCC, SouthTrust or GMAC Mortgage, as applicable, the related Mortgage File
and shall execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by MLCC, SouthTrust or GMAC Mortgage, as applicable,
as are necessary to vest in MLCC, SouthTrust or GMAC Mortgage, as applicable,
title to and rights under the related Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which the purchase proceeds in available
funds are 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 MLCC, SouthTrust or GMAC Mortgage, as applicable, 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; ASSIGNMENT OF INTEREST IN ADDITIONAL COLLATERAL.
(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

                                      -42-

<PAGE>

Exhibit C hereto regarding the Mortgage Loans (including the substitution and
repurchase obligations of the Mortgage Loan Seller) and (ii) the Servicing
Agreements, as assigned to the Trustee pursuant to the Assignment Agreements and
(iii) the Group 3 Servicing Agreements, insofar as such agreements relate to the
representations and warranties set forth in Exhibit C hereto regarding the Group
3 Mortgage Loans (including the assignment of the obligation of MLCC, SouthTrust
or GMAC Mortgage to substitute or repurchase the Group 3 Mortgage Loans);
provided that the obligations of the Mortgage Loan Seller, MLCC, SouthTrust or
GMAC Mortgage 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, in the case of the Servicing
Agreements, as agent for the Trustee) 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; provided, however, that the Master Servicer shall not be
required to enforce any representations and warranties in the Servicing
Agreements with respect to any Mortgage Loans.

         (b) If the Master Servicer, Seller, Trustee or Custodian discovers a
breach of any of the representations and warranties set forth in Exhibit C with
respect to a Group 1 or Group 2 Mortgage Loan, 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 and to the
Mortgage Loan Seller. The Mortgage Loan Seller within 90 days of its discovery
or receipt of notice that such breach has occurred (whichever occurs earlier),
shall cure the breach in all material respects or, subject to Section 2.04,
shall purchase such Mortgage Loan or any property acquired with respect thereto
from the Trustee at the Repurchase Price; PROVIDED, HOWEVER, that if there is a
breach of any representation set forth in Exhibit C and such Mortgage Loan or
the related property acquired with respect thereto has been sold, then the
Mortgage Loan Seller shall pay, in lieu of the Repurchase Price, any excess of
the Repurchase Price over the Net Liquidation Proceeds received upon such sale.
(If the Net Liquidation Proceeds exceed the Repurchase Price, any excess shall
be paid to the Mortgage Loan Seller to the extent not required by law to be paid
to the borrower.) Any such purchase by the Mortgage Loan Seller shall be made by
providing an amount equal to the Repurchase Price to the Trustee for deposit in
the Certificate Account and the Trustee or Custodian, upon deposit of the
Repurchase Price in the Certificate Account and of written notification
detailing the components of such Repurchase Price, shall release to the Mortgage
Loan Seller the related Mortgage File and shall execute and deliver all
instruments of transfer or assignment furnished to it by the Mortgage Loan
Seller, without recourse, as are necessary to vest in the Mortgage Loan Seller
title to and rights under the Group 1 or Group 2 Mortgage Loan or any property
acquired with respect thereto. Such purchase shall be deemed to have occurred on
the date on which the Repurchase Price in available funds is received by the
Trustee. The Trustee shall amend the Mortgage Loan Schedule to reflect such
repurchase and shall promptly notify the Master Servicer and the Rating Agencies
of such amendment. Enforcement of the obligation of the Mortgage Loan Seller, to
purchase (or substitute a Substitute Mortgage Loan for) any such 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.

                                      -43-

<PAGE>

         (c) If the Master Servicer, Seller, Trustee or Custodian discovers a
breach of any of the representations and warranties set forth in Exhibit C with
respect to a Group 3 Mortgage Loan, 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 and to MLCC, SouthTrust or
GMAC Mortgage, as applicable. The Trustee shall enforce the obligation of MLCC,
SouthTrust or GMAC Mortgage, as applicable, to cure, substitute or purchase the
related Mortgage Loan under the related Servicing Agreement. The proceeds of any
purchase by MLCC, SouthTrust or GMAC Mortgage shall be deposited by the Trustee
in the Certificate Account and the Trustee or Custodian, upon deposit of such
proceeds in the Certificate Account and of written notification detailing the
components of such proceeds, shall release to MLCC, SouthTrust or GMAC Mortgage,
as applicable, the related Mortgage File and shall execute and deliver all
instruments of transfer or assignment furnished to it by MLCC, SouthTrust or
GMAC Mortgage, as applicable, without recourse, as are necessary to vest in
MLCC, SouthTrust or GMAC Mortgage, as applicable, 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 related proceeds 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 MLCC, SouthTrust or GMAC Mortgage, as applicable, 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.

         (d) EMC hereby assigns to the Trustee its security interest in and to
any Additional Collateral, its right to receive amounts due or to become due in
respect of any Additional Collateral pursuant to the related Servicing Agreement
and its rights as beneficiary under the Surety Bond in respect of any Additional
Collateral Mortgage Loans. With respect to any Additional Collateral Mortgage
Loan, EMC shall cause to be filed in the appropriate recording office a Form
UCC-3 giving notice of the assignment of the related security interest to the
Trust Fund and shall thereafter cause the timely filing of all necessary
continuation statements with regard to such financing statements.

         Section 2.04. SUBSTITUTION OF MORTGAGE LOANS.

         (a) Notwithstanding anything to the contrary in this Agreement, in lieu
of purchasing a Group 1 or Group 2 Mortgage Loan pursuant to Sections 2.02 or
2.03, the Mortgage Loan Seller may, no later than the date by which such
purchase by the Mortgage Loan Seller would otherwise be required, tender to the
Trustee a Substitute Mortgage Loan accompanied by a certificate of an authorized
officer of the Mortgage Loan Seller that such Substitute Mortgage Loan conforms
to the requirements set forth in the definition of "Substitute Mortgage Loan";
PROVIDED, HOWEVER, that substitution pursuant to this Section 2.04 in lieu of
purchase shall not be permitted after the termination of the two-year period
beginning on the Startup Day. The Trustee or Custodian shall examine the
Mortgage File for any such Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and shall notify the Mortgage Loan Seller and the Master
Servicer in writing, within five Business Days after receipt, whether or not the
documents relating to such Substitute Mortgage Loan

                                      -44-

<PAGE>

satisfy the requirements of the third sentence of Subsection 2.02(a). Within two
Business Days after such notification, the Mortgage Loan Seller shall provide to
the Trustee for deposit in the 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 the Mortgage Loan Seller
of the Repurchase Price for the purchase of a Mortgage Loan by the Mortgage Loan
Seller. After such notification to the Mortgage Loan Seller and, if any such
excess exists, upon receipt of such deposit, the Trustee shall accept such
Substitute Mortgage Loan which shall thereafter be deemed to be a Group 1 or
Group 2 Mortgage Loan hereunder. In the event of such a substitution, accrued
interest on the Substitute Mortgage Loan for the month in which the substitution
occurs and any Principal Prepayments made thereon during such month shall be the
property of the Trust Fund and accrued interest for such month on the Mortgage
Loan for which the substitution is made and any Principal Prepayments made
thereon during such month shall be the property of the Mortgage Loan Seller. The
Scheduled Principal on a Substitute Mortgage Loan due on the Due Date in the
month of substitution shall be the property of the Mortgage Loan Seller and the
Scheduled Principal on the Mortgage Loan for which the substitution is made due
on such Due Date shall be the property of the Trust Fund. Upon acceptance of the
Substitute Mortgage Loan, the Trustee or Custodian shall release to the Mortgage
Loan Seller 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 Mortgage Loan Seller title to and rights under any
Group 1 or Group 2 Mortgage Loan released pursuant to this Section 2.04. The
Mortgage Loan Seller shall deliver the documents related to the Substitute
Mortgage Loan in accordance with the provisions of Subsections 2.01(b) and
2.02(b), with the date of acceptance of the Substitute Mortgage Loan deemed to
be the Closing Date for purposes of the time periods set forth in those
Subsections. The representations and warranties set forth in the applicable
Servicing Agreement and Exhibit C shall be deemed to have been made by the
Mortgage Loan Seller with respect to each Substitute Mortgage Loan as of the
date of acceptance of such Mortgage Loan by the Trustee. The 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.

         (b) Notwithstanding anything to the contrary in this Agreement, in lieu
of purchasing a Group 3 Mortgage Loan pursuant to Sections 2.02 or 2.03, GMAC
Mortgage, MLCC or SouthTrust, as applicable, may substitute a Substitute
Mortgage Loan for a Group 3 Mortgage Loan in accordance with the related Group 3
Servicing Agreement. Upon acceptance of such Substitute Mortgage Loan, the
Trustee or Custodian shall release to GMAC Mortgage, MLCC or SouthTrust the
related Mortgage File related to any Group 3 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 GMAC Mortgage, MLCC or SouthTrust, as applicable, title to and rights under
any Group 3 Mortgage Loan released pursuant to this Section 2.04. 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.

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<PAGE>

         Section 2.05. ISSUANCE OF CERTIFICATES. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the other assets comprising the Trust
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 Custodian agrees that it will hold the Mortgage Files and the Trustee also
agrees to 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 or Custodian in trust
for the benefit of the Certificateholders.

         Section 2.06. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents, warrants and covenants 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 bank duly organized, validly existing and
         in good standing under the laws of the State of New York with a
         principal place of business in New York, New York.

                  (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 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 Restated Organizational
         Certificate 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 New York State 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

                                      -46-

<PAGE>

                  (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
         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

                                      -47-

<PAGE>

         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 national banking association, 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;

                           (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 charter 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

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<PAGE>

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
the primary business of which is the servicing of conventional residential
mortgage loans, 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;

                           (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's computer programs, systems
and applications used in master servicing the Mortgage Loans, and service any
Mortgage Loans that it directly services, will be replaced or modified and
maintained to operate in such a manner that at all times, including on and after
January 1, 2000, it can master service the Mortgage Loans, and service any
Mortgage Loans that it directly services, in accordance with the terms of this
Agreement.

                           (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.

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

         Notwithstanding the foregoing or any other provision of this Agreement
or the Servicing Agreement with MLCC to the contrary, the Master Servicer shall
have no duty or obligation to supervise, monitor or oversee the activities of
EMC under Section 3.15 hereof or of MLCC or to enforce the obligations of EMC
under Section 3.15 hereof or of MLCC under its Servicing Agreement with respect
to any Additional Collateral or any Surety Bond, including, without limitation,
the collection of any amounts owing to the Trust in respect thereof (unless and
until the Master Servicer shall have assumed the obligations of MLCC as
successor Servicer under such Servicing Agreement pursuant to Section 3.02
hereof, in which case, as successor Servicer, it shall be bound to service and
administer the Additional Collateral and the Surety Bonds in accordance with the
provisions of such Servicing Agreement).

         Section 3.02 MONITORING OF SERVICERS' PERFORMANCE.

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

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<PAGE>

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

                  (c) To the extent that the costs and expenses of the Master
Servicer related to any termination of a Servicer, appointment of a successor
Servicer or the transfer and assumption of servicing by the Master Servicer with
respect to any Servicing Agreement are not fully and timely reimbursed by the
Seller or the terminated Servicer, the Master Servicer shall be entitled to
reimbursement of such costs and expenses from the Protected Account.

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

                  (e) If the Master Servicer acts as Servicer, it will not
assume liability for the representations and warranties of the Servicer, if any,
that it replaces. The Master Servicer shall use reasonable efforts to have the
successor Servicer assume liability for the representations and warranties made
by the terminated Servicer in respect of the related Mortgage Loans, and in the
event of any such assumption by the successor Servicer, the Trustee or the
Master Servicer, as applicable, may, in the exercise of its business judgment,
release the terminated Servicer from liability for such representations and
warranties; provided that the Trustee or the Master Servicer may not release
MLCC, GMAC Mortgage or SouthTrust from their obligations with respect to the
representations and warranties made by them with respect to the related Group 3
Mortgage Loans.

         Section 3.03. MASTER SERVICER FIDELITY BOND AND MASTER SERVICER ERRORS
AND OMISSIONS INSURANCE POLICY. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.

         Section 3.04 MASTER SERVICER'S FINANCIAL STATEMENTS AND RELATED
INFORMATION. For each year this Agreement is in effect, the Master Servicer will
make available to the Trustee, each Rating

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

         Section 3.06 [Reserved]

         Section 3.07 "DUE ON SALE" CLAUSES; ASSUMPTION AGREEMENTS. To the
extent provided in the applicable Servicing Agreement, to the extent Mortgage
Loans contain enforceable due-on-sale clauses, the Master Servicer shall cause
the Servicers to enforce such clauses in accordance with the applicable
Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
the applicable Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the applicable Servicing Agreement.

         Section 3.08 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next

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<PAGE>

Distribution Date, the Servicer will, if required under the applicable Servicing
Agreement, promptly furnish to the Trustee (or the Custodian) two copies of a
certification substantially in the form of Exhibit D hereto signed by a
Servicing Officer or in a mutually agreeable electronic format which will, in
lieu of a signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
Protected Account maintained by the Master Servicer pursuant to Section 4.01 or
by the applicable Servicer pursuant to its Servicing Agreement have been or will
be so deposited) and shall request that the Trustee or the Custodian, deliver to
the applicable Servicer the related Mortgage File. Upon receipt of such
certification and request, the Trustee or the Custodian (with the consent, and
at the direction of the Trustee), shall promptly release the related Mortgage
File to the applicable Servicer and the Trustee shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in full,
each Servicer is authorized, to give, as agent for the Trustee, as the mortgagee
under the Mortgage that secured the Mortgage Loan, an instrument of satisfaction
(or assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Protected Account.

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

         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
Servicer (to the extent required by the related Servicing Agreement) shall
transmit to the Trustee such documents and instruments coming into the
possession of the Master Servicer or such Servicer from time to time as are
required by the terms hereof, or in the case of the Servicers, the applicable
Servicing Agreement, to be delivered to the Trustee. Any funds received by the
Master Servicer or by a Servicer in respect of any Mortgage Loan or which
otherwise are collected by the Master Servicer or by a Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall be held for
the benefit of the Trustee and the Certificateholders subject to the Master
Servicer's right to retain or withdraw from the Protected Account the Master
Servicing Fee and other amounts provided in this Agreement, and to the right of
each Servicer to retain its Servicing Fee and other amounts as provided in the

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<PAGE>

applicable Servicing Agreement. The Master Servicer shall, and (to the extent
provided in the applicable Servicing Agreement) shall cause each Servicer to,
provide access to information and documentation regarding the Mortgage Loans to
the Trustee, its agents and accountants at any time upon reasonable request and
during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.

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

         Section 3.10 [Reserved].

         Section 3.11 STANDARD HAZARD AND FLOOD INSURANCE POLICIES. For each
Mortgage Loan, the Master Servicer shall enforce any obligation of the Servicers
under the related Servicing Agreements to maintain or cause to be maintained
standard fire and casualty insurance and, where applicable, flood insurance, all
in accordance with the provisions of the related Servicing Agreements. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in the applicable Servicing Agreement and
that no earthquake or other additional insurance is to be required of any
Mortgagor or to be maintained on property acquired in respect of a defaulted
loan, other than pursuant to such applicable laws and regulations as shall at
any time be in force and as shall require such additional insurance.

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

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and present on behalf of the Trustee and the Certificateholders all claims under
the Insurance Policies, including claims for FHA contracts of insurance with
respect to the Mortgage Loans and any claims under any VA guarantee, and take
such actions (including the negotiation, settlement, compromise or enforcement
of the insured's claim) as shall be necessary to realize recovery under such
policies. Any proceeds disbursed to the Master Servicer (or disbursed to a
Servicer and remitted to the Master Servicer) in respect of such policies, bonds
or contracts shall be promptly deposited in the 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 Servicer (to the extent
such action is prohibited under the applicable Servicing Agreement) to take, any
action that would result in noncoverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of such Master Servicer
or Servicer, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to cause each Servicer (to the extent required under
the related Servicing Agreement) to keep in force and effect (to the extent that
the Mortgage Loan requires the Mortgagor to maintain such insurance), primary
mortgage insurance applicable to each Mortgage Loan in accordance with the
provisions of this Agreement and the related Servicing Agreement, as applicable.
The Master Servicer shall not, and shall not permit any Servicer (to the extent
required under the related Servicing Agreement) to, cancel or refuse to renew
any such Primary Mortgage Insurance Policy that is in effect at the date of the
initial issuance of the Mortgage Note and is required to be kept in force
hereunder except in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable.

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

         Section 3.14 TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES
AND DOCUMENTS. The Trustee (or its Custodian, if any, as directed by the
Trustee), shall retain possession and custody of the originals of the Primary
Mortgage Insurance Policies or certificate of insurance if applicable and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
Custodian, if any, as directed by the Trustee) shall also retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or its Custodian, if any, as directed by
the Trustee), upon the execution or receipt thereof the originals of the Primary
Mortgage Insurance Policies and any certificates of renewal

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<PAGE>

thereof, and such other documents or instruments that constitute portions of the
Mortgage File that come into the possession of the Master Servicer from time to
time.

         Section 3.15 REALIZATION UPON DEFAULTED MORTGAGE LOANS. The Master
Servicer shall cause each Servicer (to the extent required under the related
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the applicable Servicing Agreement.

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

         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 6.08, in respect of remittances from the Servicers prior to
the deposit of such payment in the Protected Account, (b) to withdraw from the
Protected Account, subject to Section 4.02, the Master Servicing Fee or (c)
receive its Master Servicing Fee on those Mortgage Loans serviced by EMC and
First Union, 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 (but not including any
prepayment premium or penalty) shall be retained by the Master Servicer (or the
applicable Servicer) and shall not be deposited in the Protected Account, or in
the case of EMC and First Union, the Certificate 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. 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

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Agreement. Pursuant to Article IV all income and gain realized from any
investment of funds in the Protected Account and the Certificate Account (other
than the funds held therein with respect to the Mortgage Loans serviced by First
Union) shall be for the benefit of the Master Servicer as additional
compensation.

                  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 6.08.

         Section 3.17 REO PROPERTY. (a) In the event the Trust Fund acquires
ownership of any REO Property in respect of any related Mortgage Loan, the deed
or certificate of sale shall be issued to the Trustee, or to its nominee, on
behalf of the related Certificateholders. The Master Servicer shall, to the
extent provided in the applicable Servicing Agreement, cause the applicable
Servicer to sell, any REO Property as expeditiously as possible and in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. Pursuant to its efforts to sell such REO Property, the
Master Servicer shall protect and conserve, or cause the applicable Servicer to
protect and conserve, such REO Property in the manner and to the extent required
by the applicable Servicing Agreement, subject to the REMIC Provisions.

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

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

                  (d) The Liquidation Proceeds from the final disposition of the
REO Property, net of any payment to the Master Servicer and the applicable
Servicer (other than EMC and First Union) as provided above shall be deposited
in the Protected Account on or prior to the Determination Date in the month
following receipt thereof and be remitted by wire transfer in immediately
available funds to the Trustee for deposit into the related Certificate Account
on the next succeeding Funds Transfer Date.

         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

                                      -57-

<PAGE>

duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof, (iii) nothing has come
to the attention of such Servicing Officer to lead such Servicing Officer to
believe that any Servicer has failed to perform any of its duties,
responsibilities and obligations under its Servicing Agreement in all material
respects throughout such year, or, if there has been a material default in the
performance or fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof.

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

         Section 3.19 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 at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Seller on or
before May 31 of each year, commencing on May 31, 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 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.

                                      -58-

<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 Servicer to establish and maintain a servicing account in accordance with
the applicable Servicing Agreement, with records to be kept with respect thereto
on a Mortgage Loan by Mortgage Loan basis, into which accounts shall be
deposited within 48 hours (or as of such other time specified in the related
Servicing Agreement) of receipt all collections of principal and interest on any
Mortgage Loan and with respect to any REO Property received by the Master
Servicer, or a Servicer, including Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds, and advances made from the Servicer's own funds (less
servicing compensation as permitted by Section 3.16, in the case of the Master
Servicer, and by the applicable Servicing Agreement in the case of any Servicer)
and all other amounts to be deposited in the 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.
The Protected Account 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. The Master
Servicer may, and, to the extent provided in the related Servicing Agreement,
permit a Servicer to, transfer funds to other accounts (which shall for purposes
hereof be deemed to be Protected Accounts), commingle accounts, or to establish
Protected Accounts not conforming to the foregoing requirements, to the extent
that such other accounts or Protected Accounts are Rating Agency Eligible
Accounts.

         Amounts on deposit in a Protected Account may be invested in Permitted
Investments in the name of the Trustee for the benefit of Certificateholders
and, except as provided in the preceding paragraph, not commingled with any
other funds, such Permitted Investments to mature, or to be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the 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 Servicer under the applicable Servicing Agreement,
and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer or the related Servicer. The Master Servicer shall
itself, or shall cause the related Servicer (to the extent provided in the
Servicing Agreement) to, deposit the amount of any such loss in the Protected
Account (or the Servicer's servicing 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 or shall cause to be withdrawn from the
Protected Accounts and shall immediately deposit or cause to be deposited 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):

                                      -59-

<PAGE>

                  (i) Scheduled Payments on the Mortgage Loans received or any
         related portion thereof advanced by the Master Servicer pursuant to
         Section 6.07 or Servicers (other than EMC and First Union) which were
         due on or before the related Due Date, net of the amount thereof
         comprising the Master Servicing Fee or Servicing Fees;

                  (ii) Full Principal Prepayments and any Liquidation Proceeds
         received by the Master Servicer or related Servicers (other than EMC
         and First Union) 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 or Servicing Fees;

                  (iii) Partial Principal Prepayments received by the Master
         Servicer or related Servicers (other than EMC and First Union) for such
         Mortgage Loans in the related Prepayment Period; and

                  (iv) Any amount to be used as a Certificate Account Advance.

In addition, on or before each Advancing Date, the Master Servicer shall deposit
in the Certificate Account (or remit to the Trustee for deposit therein) any
Monthly Advances required to be made by the Master Servicer with respect to the
Mortgage Loans serviced by EMC and First Union pursuant to Section 6.07. EMC and
First Union will deposit in the Certificate Account (or remit to the Trustee for
deposit therein) the collections and payments described above to the extent
required under the related Servicing Agreement.

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

         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;

                                      -60-

<PAGE>

                  (iv) The Repurchase Price with respect to any Mortgage Loans
         purchased by the Mortgage Loan Seller 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;

                  (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;

                  (vi) Any amounts realized by the related Servicer and received
         by the Trustee or the Master Servicer in respect of any Additional
         Collateral; and

                  (vii) Any amounts received from EMC and First Union.

         (b) All amounts deposited to the Certificate Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement, 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 (xi) need not be credited by the Master
Servicer or the related Servicer to the Certificate Account. 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 amount at any time credited to the Certificate Account shall be
invested, in the name of the Trustee, or its nominee, for the benefit of the
Certificateholders, in Permitted Investments as directed by Master Servicer, or
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 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
(i) any investment in the institution with which the Certificate Account is
maintained may mature on such Distribution Date and (ii) any other investment
may mature on such Distribution Date if the Trustee shall advance funds on such
Distribution Date to the Certificate Account in the amount payable on such
investment on such Distribution Date, pending receipt thereof to the extent
necessary to make distributions on the Certificates). The Master Servicer shall
be entitled to all investment earnings on amounts in the Certificate Account
other than on funds held therein with respect to the Mortgage Loans serviced by
First Union, which investment earnings shall be remitted by the Trustee to First
Union.

                                      -61-

<PAGE>

         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):

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

                  (ii) to reimburse the Master Servicer or any Servicer from
         Insurance Proceeds or Liquidation Proceeds relating to a particular
         Mortgage Loan for amounts expended by the Master Servicer or such
         Servicer pursuant to Section 3.12 in good faith in connection with the
         restoration of the related Mortgaged Property which was damaged by an
         Uninsured Cause or in connection with the liquidation of such Mortgage
         Loan;

                  (iii) to reimburse the Master Servicer or any Servicer from
         Insurance Proceeds relating to a particular Mortgage Loan for Insured
         Expenses incurred with respect to such Mortgage Loan and to reimburse
         the Master Servicer or such Servicer from Liquidation Proceeds from a
         particular Mortgage Loan for Liquidation Expenses incurred with respect
         to such Mortgage Loan; PROVIDED THAT the Master Servicer shall not be
         entitled to reimbursement for Liquidation Expenses with respect to a
         Mortgage Loan to the extent that (i) any amounts with respect to such
         Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to
         clause (xi) of this Subsection 4.03(a) to the Master Servicer; and (ii)
         such Liquidation Expenses were not included in the computation of such
         Excess Liquidation Proceeds;

                  (iv) to pay the Master Servicer or any Servicer (payment to
         any 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
         Servicer would have been entitled to receive under subclause (ix) of
         this Subsection 4.03(a) as servicing compensation on account of each
         defaulted scheduled payment on such Mortgage Loan if paid in a timely
         manner by the related Mortgagor;

                  (v) to pay the Master Servicer or any Servicer (payment to any
         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 Servicer would have been entitled to
         receive under subclause (ix) of this Subsection 4.03(a) as servicing
         compensation;

                                      -62-

<PAGE>

                  (vi) to reimburse the Master Servicer or any Servicer for
         advances of funds pursuant to Sections 3.11 and 3.12, the right to
         reimbursement pursuant to this subclause being limited to amounts
         received on the related Mortgage Loan (including, for this purpose, the
         Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds)
         which represent late recoveries of the payments for which such advances
         were made;

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

                  (viii) to pay the Master Servicer as set forth in Section
         3.16;

                  (ix) to reimburse the Master Servicer for expenses, costs and
         liabilities incurred by and reimbursable to it pursuant to Sections
         3.02, 7.04(c) and (d) and 11.03;

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

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

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

                  (xiii) to remove amounts deposited in error.

         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 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 Servicers are entitled as
servicing compensation (including income on Permitted Investments) or
reimbursement of any reimbursable advances made by such Servicers.

                                      -63-

<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 28, 2000
(the "Depository Agreement"). Except for the Residual 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) (i) REMIC I will be evidenced by (x) the REMIC I Regular Interests,
which will be uncertificated and non-transferable, are hereby designated as the
"regular interests" in REMIC I and have a total principal balance equal to the
sum of the principal balances of the related Classes of

                                      -64-

<PAGE>

Corresponding Certificates and accrue interest at a Pass-Through Rate equal to
the weighted average of the Net Rates of the Mortgage Loans in the Loan Group
relating to such Classes of Corresponding Certificates (which, in the case of
REMIC I Regular Interest A-1, is Loan Group 1) and (y) the Class R-I
Certificate, which is hereby designated as the single "residual interest" in
REMIC I. Except as discussed below, principal and interest shall be payable to,
and shortfalls, losses and prepayments are allocable to, the REMIC I Regular
Interests in the same order and priority as payments are to be made on, and
shortfalls, losses and prepayments are allocable to, the Corresponding Classes
of Certificates.

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

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

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

         I-A-1               $      167,240,400.00                 (1)

        I-A-IO               $     167,240,400.00*                0.92%

         I-B-1               $        5,091,800.00                 (2)

         I-B-2               $        1,053,500.00                 (2)

         I-B-3               $          790,100.00                 (2)

         I-B-4               $          351,200.00                 (2)

         I-B-5               $          263,300.00                 (2)

         I-B-6               $          790,188.66                 (2)

        II-A-1               $      115,145,600.00                 (3)

        II-B-1               $        2,863,400.00                 (3)

        II-B-2               $        1,766,800.00                 (3)

        II-B-3               $          913,800.00                 (3)

        II-B-4               $          548,300.00                 (3)

        II-B-5               $          182,800.00                 (3)

        II-B-6               $          426,507.15                 (3)

       III-A-1               $      141,957,300.00                 (4)

       III-B-1               $        4,055,900.00                 (4)

                                      -65-

<PAGE>

       III-B-2               $        2,028,000.00                 (4)
       III-B-3               $          901,300.00                 (4)
       III-B-4               $          525,700.00                 (4)
       III-B-5               $          225,400.00                 (4)
       III-B-6               $          525,788.93                 (4)
           R-I               $               50.00                 (2)
          R-II               $               50.00                 (2)

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

(1) The Class I-A-1 Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 1 Mortgage
Loans minus 0.92% per annum.

(2) The Class R-I, Class R-II, Class I-B-1, Class I-B-2, Class I-B-3, Class
I-B-4, Class I-B-5 and Class I-B-6 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 1
Mortgage Loans.

(3) The Class II-A-1, Class II-B-1, Class II-B-2, Class II-B-3, Class II-B-4,
Class II-B-5 and Class II-B-6 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 2
Mortgage Loans.

(4) The Class III-A-1, Class III-B-1, Class III-B-2, Class III-B-3, Class
III-B-4, Class III-B-5 and Class III-B-6 Certificates will bear interest at a
variable Pass-Through Rate equal to the weighted average of the Net Rates of the
Group 3 Mortgage Loans.

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

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

                                      -66-

<PAGE>

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 Class I-B-1, Class I-B-2, Class I-B-3, Class II-B-1, Class II-B-2, Class
II-B-3, Class III-B-1, Class III-B-2 and Class III-B-3 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 or Notional Amount of such Class on the Closing Date. On the Closing
Date, the Trustee shall execute and countersign Physical Certificates all in an
aggregate principal amount that shall equal the Current Principal Amount of such
Class on the Closing Date. The Private Certificates will be issued in
certificated fully-registered form in minimum denominations of $50,000 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. Each Class of Residual Certificates
shall be issued as a single certificate in fully-registered form in the
denomination of $50. Each Class of Global Certificates, if any, shall be issued
in fully registered form in minimum dollar denominations of $50,000 and integral
multiples of $1.00 in excess thereof, except that one Certificate of each Class
may be in a different denomination so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Current Principal Amount
of such Class on the Closing Date. On the Closing Date, the Trustee shall
execute and countersign (i) in the case of each Class of Offered Certificates,
the Certificate in the entire Current Principal Amount or Notional Amount of the
respective Class and (ii) in the case of the Private 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.

                                      -67-

<PAGE>

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

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

         (k) The Trustee on behalf of the Trust shall cause each Series REMIC 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.

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

         (b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Private 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.

                                      -68-

<PAGE>

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

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

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

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

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

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

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

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

                                      -69-

<PAGE>

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

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

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

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

         (h) Subject to the restrictions on transfer and exchange set forth in
this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination set forth in Section 5.01(h) above or any
integral multiple of $1.00 in excess thereof) by surrendering such Certificate
at the Corporate Trust Office, or at the office of any transfer agent, together
with an executed instrument of assignment and transfer satisfactory in form and
substance to the Trustee in the case of transfer and a written request for
exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the Depository,
cause the Depository (or its nominee) to notify the Trustee in writing of a
request for transfer or exchange of such beneficial interest for an Individual
Certificate or Certificates. Following a proper request for transfer or
exchange, the Trustee shall, within five Business Days of such request made at
such Corporate Trust Office, sign, countersign and deliver at such Corporate
Trust Office, to the transferee (in the case of transfer) or holder (in the case
of exchange) or send by first class mail at the risk of the transferee (in the
case of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate Fractional Undivided
Interest and in such authorized denomination or denominations as may be
requested. The presentation for transfer or exchange of any Individual
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.

                                      -70-

<PAGE>

         (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 Subordinate
Certificates, whether upon original issuance or upon issuance of any other
Certificate of any such Class in exchange therefor or upon transfer thereof:

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

                                      -71-

<PAGE>

         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 third Business Day preceding such Record Date.

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

         (b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Seller an affidavit in the form attached
hereto as Exhibit E stating, among other things, that as of the date of such
transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any
person who is not a Permitted Transferee. The Tax Matters Person shall not
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made in the affidavit issued pursuant to the preceding sentence is
not true. Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer, sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not

                                      -72-

<PAGE>

be deemed to be a Holder of a Residual Certificate for any purpose hereunder,
including, but not limited to, the receipt of distributions thereon. If any
purported transfer shall be in violation of the provisions of this Subsection
5.05(b), then the prior Holder thereof shall, upon discovery that the transfer
of such Residual Certificate was not in fact permitted by this Subsection
5.05(b), be restored to all rights as a Holder thereof retroactive to the date
of the purported transfer. None of the Trustee, the Tax Matters Person or the
Seller shall be under any liability to any Person for any registration or
transfer of a Residual Certificate that is not permitted by this Subsection
5.05(b) or for making payments due on such Residual Certificate to the purported
Holder thereof or taking any other action with respect to such purported Holder
under the provisions of this Agreement so long as the written affidavit referred
to above was received with respect to such transfer, and the Tax Matters Person,
the Trustee and the Seller, as applicable, had no knowledge that it was untrue.
The prior Holder shall be entitled to recover from any purported Holder of a
Residual Certificate that was in fact not a permitted transferee under this
Subsection 5.05(b) at the time it became a Holder all payments made on such
Residual Certificate. Each Holder of a Residual Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this Subsection 5.05(b) and to any amendment of this Agreement deemed necessary
(whether as a result of new legislation or otherwise) by counsel of the Tax
Matters Person or the Seller to ensure that the Residual Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Residual Certificates will not cause the imposition of a tax
upon the Trust or cause any Series REMIC to fail to qualify as a REMIC.

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

         (d) By accepting a Residual Certificate, the purchaser thereof agrees
to be a Tax Matters Person, and appoints the Master Servicer to act as its agent
with respect to all matters concerning the tax obligations of the Trust, other
than those matters regarding transfer restrictions contained in this Section
5.05.

         Section 5.06. RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES. (a) No
offer, sale, transfer or other disposition (including pledge) of any Certificate
shall be made by any Holder thereof unless registered under the Securities Act,
or an exemption from the registration requirements of the Securities Act and any
applicable state securities or "Blue Sky" laws is available and the prospective
transferee (other than the Seller) of such Certificate signs and delivers to the
Trustee an Investment Letter, if the transferee is an Institutional Accredited
Investor, in the form set forth as Exhibit F-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 any Certificate that is a Global
Certificate of a Class to a transferee that takes delivery in the form of a
beneficial interest in the Global Certificate of such Class provided that each
such transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that it is
a QIB. In the case of a proposed transfer of any Certificate to a transferee
other than a QIB, the Trustee may require an Opinion of Counsel that such
transaction is

                                      -73-

<PAGE>

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 Certificates shall bear a Securities Legend.

         Section 5.07. ERISA RESTRICTIONS. (a) Subject to the provisions of
subsection (b), no Residual Certificates nor any Class of Subordinate
Certificates may be acquired directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of ERISA and/or Section 4975 of the Code, unless the proposed transferee
provides either (i) the Trustee and the Master Servicer with an Opinion of
Counsel satisfactory to the Trustee and the Master Servicer, which opinion will
not be at the expense of the Trustee or the Master Servicer, that the purchase
of such Certificates by or on behalf of such Plan is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Trustee or the Master Servicer to any obligation in addition to those undertaken
in the Agreement or (ii) a representation or certification to the Trustee (upon
which the Trustee is authorized to rely) to the effect that the proposed
transfer and/or holding of such a Certificate and the servicing, management and
operation of the Trust: (I) will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code which is not covered under an
individual or class prohibited transaction exemption including but not limited
to Department of Labor Prohibited Transaction Exemption ("PTE") 84-14 (Class
Exemption for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (II) will not
subject the Seller, the Master Servicer or the Trustee to any obligation in
addition to those undertaken in the Agreement.

         (b) Any Person acquiring an interest in a Book-Entry Certificate or a
Global Certificate which is a Subordinate 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 and the Master
Servicer from and against any and all liabilities, claims, costs or expenses
incurred by the Trustee or the Master Servicer as a result of such attempted or
purported transfer.

                                      -74-

<PAGE>

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

                                      -75-

<PAGE>

                                   ARTICLE VI

                         Payments to Certificateholders

         Section 6.01. DISTRIBUTIONS ON THE CERTIFICATES. (a) Interest and
principal on each Certificate Group will be distributed monthly on each
Distribution Date, commencing in February 2000, in an aggregate amount equal to
the Group 1, Group 2 or Group 3 Available Funds, as applicable, for such
Distribution Date.

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

                           FIRST, PRO RATA, the Accrued Certificate Interest on
                           each Class of Group 1 Senior Certificates for such
                           Distribution Date;

                           SECOND, any Accrued Certificate Interest on each
                           Class of Group 1 Senior Certificates remaining
                           undistributed from previous Distribution Dates, to
                           the extent of remaining Group 1 Available Funds;

                           THIRD, to the Group 1 Senior Certificates in
                           reduction of the Current Principal Amounts thereof:

                                    the Group 1 Senior Optimal Principal Amount,
                                    sequentially, in the following order, to the
                                    Class R-I ,Class R-II and Class I-A-1
                                    Certificates, in each case until the Current
                                    Principal Amounts thereof have been reduced
                                    to zero;

                                    provided, however, that each Distribution
                                    Date after the Cross-Over Date,
                                    distributions of principal on the
                                    outstanding Group 1 Senior Certificates will
                                    be made PRO RATA among all Group 1 Senior
                                    Certificates, regardless of the allocation,
                                    or sequential nature, of principal payments
                                    described in this priority THIRD, based upon
                                    the then Current Principal Amounts of such
                                    Group 1 Senior Certificates.

                  (ii) GROUP 1 SUBORDINATE CERTIFICATES. On each Distribution
                  Date, the Group 1 Available Funds remaining after the
                  distributions described above under Section 6.01(a)(i) will be
                  distributed among the Group 1 Subordinate Certificates
                  sequentially, in the following order, to the Class I-B-1,
                  Class I-B-2, Class I-B-3, Class I-B-4, Class I-B-5 and Class
                  I-B-6 Certificates, in each case up to an amount equal to and
                  in the following order: (a) the Accrued Certificate Interest
                  thereon for such Distribution Date, (b) any Accrued
                  Certificate Interest thereon remaining undistributed from
                  previous Distribution Dates and (c) such Class's Allocable
                  Share for such Distribution Date.

                                      -76-

<PAGE>

         (b) Interest and principal on the Group 2 Certificates will be
distributed monthly on each Distribution Date, commencing in February 2000, in
an aggregate amount equal to the Group 2 Available Funds for such Distribution
Date.

                  (i) GROUP 2 SENIOR CERTIFICATES. On each Distribution Date,
                  the Group 2 Available Funds will be distributed in the
                  following order of priority among the Group 2 Senior
                  Certificates:

                           FIRST, the Accrued Certificate Interest on the Class
                           II-A-1 Certificates for such Distribution Date;

                           SECOND, any Accrued Certificate Interest on the Class
                           II-A-1 Certificates remaining undistributed from
                           previous Distribution Dates, to the extent of
                           remaining Group 2 Available Funds;

                           THIRD, to the Class II-A-1 Certificates in reduction
                           of the Current Principal Amount thereof until the
                           Current Principal Amount thereof has been reduced to
                           zero, the Group 2 Senior Optimal Principal Amount for
                           such Distribution Date; and

                           FOURTH, to the Class II-A-1 Certificates, any Accrued
                           Certificate Interest thereon remaining undistributed
                           from previous Distribution Dates, to the extent of
                           any Group 2 Available Funds.

                           (ii) GROUP 2 SUBORDINATE CERTIFICATES. On each
                           Distribution Date, the Group 2 Available Funds
                           remaining after the distributions described above
                           under Section 6.01(b)(i) will be distributed among
                           the Group 2 Subordinate Certificates sequentially, in
                           the following order, to the Class II-B-1, Class
                           II-
                           B-2, Class II-B-3, Class II-B-4, Class II-B-5 and
                           Class II-B-6 Certificates, in each case up to an
                           amount equal to and in the following order: (a) the
                           Accrued Certificate Interest thereon for such
                           Distribution Date, (b) any Accrued Certificate
                           Interest thereon remaining undistributed from
                           previous Distribution Dates and (c) such Class's
                           Allocable Share for such Distribution Date.

         (c) Interest and principal on the Group 3 Certificates will be
distributed monthly on each Distribution Date, commencing in February 2000, in
an aggregate amount equal to the Group 3 Available Funds for such Distribution
Date.

                  (i) GROUP 3 SENIOR CERTIFICATES. On each Distribution Date,
                  the Group 3 Available Funds will be distributed in the
                  following order of priority among the Group 3 Senior
                  Certificates:

                           FIRST, the Accrued Certificate Interest on the Class
                           III-A-1 Certificates for such Distribution Date;

                                      -77-

<PAGE>

                           SECOND, any Accrued Certificate Interest on the Class
                           III-A-1 Certificates remaining undistributed from
                           previous Distribution Dates, to the extent of
                           remaining Group 3 Available Funds;

                           THIRD, to the Class III-A-1 Certificates in reduction
                           of the Current Principal Amount thereof until the
                           Current Principal Amount thereof has been reduced to
                           zero, the Group 3 Senior Optimal Principal Amount for
                           such Distribution Date; and

                           FOURTH, to the Class III-A-1 Certificates, any
                           Accrued Certificate Interest thereon remaining
                           undistributed from previous Distribution Dates, to
                           the extent of any Group 3 Available Funds.

                           (ii) GROUP 3 SUBORDINATE CERTIFICATES. On each
                           Distribution Date, the Group 3 Available Funds
                           remaining after the distributions described above
                           under Section 6.01(c)(i) will be distributed among
                           the Group 3 Subordinate Certificates sequentially, in
                           the following order, to the Class III-B-1, Class
                           III-B-2, Class III-B-3, Class III-B-4, Class III-B-5
                           and Class III-B-6 Certificates, in each case up to an
                           amount equal to and in the following order: (a) the
                           Accrued Certificate Interest thereon for such
                           Distribution Date, (b) any Accrued Certificate
                           Interest thereon remaining undistributed from
                           previous Distribution Dates and (c) such Class's
                           Allocable Share for such Distribution Date.

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

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

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

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

                                      -78-

<PAGE>

reduction in the servicing compensation of the Master Servicer or otherwise,
except to the extent of applicable Compensating Interest Payments.

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

         Section 6.02. ALLOCATION OF DEFERRED INTEREST. (a) On or prior to each
Determination Date, the Trustee shall determine the amount of any Deferred
Interest in respect of each Group 1 Mortgage Loan that occurred during the
immediately preceding calendar month.

         (b) With respect to any Distribution Date, to the extent that the
Accrued Certificate Interest on the most subordinate Class of Group 1
Certificates outstanding on such Distribution Date exceeds the Group 1 Available
Funds available to pay such Accrued Certificate Interest pursuant to Section
6.01(a), the lesser of such excess and the aggregate amount of Deferred
Interest, if any, that is added to the principal balance of the related
negatively amortizing Group 1 Mortgage Loans on the Due Date occurring in the
month in which such Distribution Date occurs will be added to the Current
Principal Amounts of the most subordinate class of Group 1 Certificates
outstanding in accordance with the amount of Accrued Certificate Interest that
would have accrued on such Certificate absent such reduction and subtracted from
the amount of Accrued Certificate Interest otherwise payable to such Group 1
Certificates for such Distribution Date.

         (c) On each Distribution Date on which the Current Principal Amount of
a Class of Certificates is increased by Deferred Interest in accordance with
Section 6.02(b) above, the interest payable on such Class shall be decreased by
an equivalent amount.

         Section 6.03. ALLOCATION OF LOSSES. (a) On or prior to each
Determination Date, the Master Servicer shall determine the amount of any
Realized Loss in respect of each Mortgage Loan that occurred during the
immediately preceding calendar month.

                  (b) (i) With respect to any Certificates on any Distribution
         Date prior to the related Group 1 Cross-Over Date, the principal
         portion of each Realized Loss on a Group 1 Mortgage Loan shall be
         allocated as follows:

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

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

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

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

                                      -79-

<PAGE>

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

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

                  (ii) With respect to any Certificates on or after the Group 1
         Cross-Over Date, (i) the principal portion of each Realized Loss on a
         Group 1 Mortgage Loan shall be allocated to the Group 1 Senior
         Certificates (other than the Class I-A-IO Certificates), until the
         Current Principal Amounts thereof have been reduced to zero.

                  (c) With respect to any Certificates on any Distribution Date,
         the principal portion of each Realized Loss on a Group 2 Mortgage Loan
         shall be allocated as follows:

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

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

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

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

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

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

                                    seventh, to the Classes of Group 2 Senior
         Certificates.

                  (ii) With respect to any Certificates on or after the Group 2
         Cross-Over Date, (i) the principal portion of each Realized Loss on a
         Group 2 Mortgage Loan shall be allocated to the Group 2 Senior
         Certificates, until the Current Principal Amount thereof has been
         reduced
         to zero.

                  (d) With respect to any Certificates on any Distribution Date,
         the principal portion of each Realized Loss on a Group 3 Mortgage Loan
         shall be allocated as follows:

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

                                      -80-

<PAGE>

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

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

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

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

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

                                    seventh, to the Classes of Group 3 Senior
         Certificates.

                  (ii) With respect to any Certificates on or after the Group 3
         Cross-Over Date, (i) the principal portion of each Realized Loss on a
         Group 3 Mortgage Loan shall be allocated to the Group 3 Senior
         Certificates, until the Current Principal Amount thereof has been
         reduced
         to zero.

         (e) Notwithstanding the foregoing, any Special Hazard Loss allocable to
the Senior Certificates in any Certificate Group pursuant to clauses (b), (c) or
(d) above after the related CrossOver Date shall be allocated to such Senior
Certificates and the most subordinate Class or Classes of Subordinate
Certificates in the other Certificate Groups on a pro rata basis, based on the
Current Principal Amount of such Certificates, in reduction of the Current
Principal Amounts thereof until reduced to zero, with any such loss allocable to
such Certificates allocated in the order described in clause (b), (c) or (d)
above, as applicable.

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

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

         (h) 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.

                                      -81-

<PAGE>

         (i) On each Distribution Date, the Master Servicer shall determine the
Group 1, Group 2 and Group 3 Subordinate Certificate Writedown Amount. Any such
Group 1 Subordinate Certificate Writedown Amount shall effect a corresponding
reduction in the Group 1 Current Principal Amount of (i) if prior to the Group 1
Cross-Over Date, the Current Principal Amounts of the Group 1 Subordinate
Certificates, in the reverse order of their numerical Class designations and
(ii) from and after the Group 1 Cross-Over Date, the Group 1 Senior Certificates
(other than the Class I-A-IO Certificates), PRO RATA based on their respective
Current Principal Amounts, which reduction shall occur on such Distribution Date
after giving effect to distributions made on such Distribution Date. Any such
Group 2 Subordinate Certificate Writedown Amount shall effect a corresponding
reduction in the Group 2 Current Principal Amount of (i) if prior to the Group 2
Cross-Over Date, the Current Principal Amounts of the Group 2 Subordinate
Certificates, in the reverse order of their numerical Class designations and
(ii) from and after the Group 2 Cross-Over Date, the Group 2 Senior
Certificates, which reduction shall occur on such Distribution Date after giving
effect to distributions made on such Distribution Date. Any such Group 3
Subordinate Certificate Writedown Amount shall effect a corresponding reduction
in the Group 3 Current Principal Amount of (i) if prior to the Group 3
Cross-Over Date, the Current Principal Amounts of the Group 3 Subordinate
Certificates, in the reverse order of their numerical Class designations and
(ii) from and after the Group 3 Cross-Over Date, the Group 3 Senior
Certificates, which reduction shall occur on such Distribution Date after giving
effect to distributions made on such Distribution Date.

         (j) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall, and any Deferred Interest or the interest portion of any
Realized Loss, for such Distribution Date. The interest portion of any Realized
Losses with respect to the Group 1 Mortgage Loans occurring on or prior to the
Group 1 Cross-Over Date will not be allocated among any Group 1 Certificates,
but will reduce the amount of Group 1 Available Funds on the related
Distribution Date. As a result of the subordination of the Group 1 Subordinate
Certificates, in right of distribution, such Realized Losses will be borne first
by the Group 1 Subordinate Certificates in inverse order of their numerical
Class designations. Following the Group 1 Cross-Over Date, the interest portion
of Realized Losses on the Group 1 Mortgage Loans will be allocated, PRO RATA, to
the Group 1 Senior Certificates. The interest portion of any Realized Losses
with respect to the Group 2 Mortgage Loans occurring on or prior to the Group 2
Cross-Over Date will not be allocated among any Group 2 Certificates, but will
reduce the amount of Group 2 Available Funds on the related Distribution Date.
As a result of the subordination of the Group 2 Subordinate Certificates, in
right of distribution, such Realized Losses will be borne first by the Group 2
Subordinate Certificates in inverse order of their numerical Class designations.
Following the Group 2 Cross-Over Date, the interest portion of Realized Losses
on the Group 2 Mortgage Loans will be allocated to the Group 2 Senior
Certificates. The interest portion of any Realized Losses with respect to the
Group 3 Mortgage Loans occurring on or prior to the Group 3 Cross-Over Date will
not be allocated among any Group 3 Certificates, but will reduce the amount of
Group 3 Available Funds on the related Distribution Date. As a result of the
subordination of the Group 3 Subordinate Certificates, in right of distribution,
such Realized Losses will be borne first by the Group 3 Subordinate Certificates
in inverse order of their numerical Class designations. Following

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<PAGE>

the Group 3 Cross-Over Date, the interest portion of Realized Losses on the
Group 3 Mortgage Loans will be allocated to the Group 3 Senior Certificates.

         Section 6.04. 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 Master Servicer shall
calculate the amount to be distributed to each Class and, based on such amounts,
the Trustee shall determine the amount to be distributed to each
Certificateholder. All of the Trustee's calculations of payments shall be based
solely on information provided to the Trustee by the Master Servicer. The
Trustee shall not be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such information.

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

         Section 6.05. STATEMENTS TO CERTIFICATEHOLDERS. (a) The Master Servicer
shall prepare and deliver to the Trustee at least two Business Days prior to
each Distribution Date, and concurrently with each distribution to
Certificateholders, the Trustee shall forward by first-class mail to each
Certificateholder, with a copy to 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, in the case of each
Class of Notional Amount Certificates, a Notional Amount of $1,000, or in the
case of the Residual Certificates, an initial Current Principal Amount of $50
and expressed with respect to clauses (viii) through (xv) and (xvii) with
respect to Loan Group 1, Loan Group 2 and Loan Group 3 separately:

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

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

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

                  (iv) the Net Interest Shortfall, Deferred Interest 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;

                                      -83-

<PAGE>

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

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

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

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

                  (ix) the amount of any Realized Losses during the related
         Prepayment Period and cumulatively since the Cut-off Date and the
         amount and source (separately identified) of any distribution in
         respect thereof included in such distribution;

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

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

                  (xii) information regarding any Mortgage Loan delinquencies as
         of the end of the related Prepayment Period, including the aggregate
         number, aggregate Outstanding Principal Balance and aggregate Scheduled
         Principal Balance of Mortgage Loans 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;

                                      -84-

<PAGE>

                  (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 Average Loss Severity for the prior calendar month;

                  (xviii) any Diverted Amount for such Distribution Date; and

                  (xix) the then applicable Senior Percentages, Senior
         Prepayment Percentages, Subordinate Percentages and Subordinate
         Prepayment Percentages.

         In addition to the foregoing, the Master Servicer shall prepare and
deliver electronically to Thornburg Mortgage, Inc. not later than one Business
Day following the Distribution Date a statement setting forth the information
indicated in the Thornburg Report attached hereto as Exhibit H.

         The information set forth above shall be reported by the Trustee based
on data provided by the Master Servicer pursuant to this Section 6.05 upon which
the Trustee may conclusively rely and which the Trustee shall not be required to
confirm or verify. The information furnished by the Master Servicer shall be
sufficient for the Trustee to make any payments it is required to make.

         The Master Servicer may make available each month, to any interest
party, the monthly statement to Certificateholders via the Master Servicer's
website, electronic bulletin board and its fax-on-demand service. The Master
Servicer's website will be located at "www.ctslink.com." The Master Servicer's
electronic bulletin board may be accessed by calling (301) 815-6620 and its fax-
on-demand service may be accessed by calling (301) 815-6610.

         (b) By April 30 of each year beginning in 2000, the Trustee will
furnish a report to each Holder of the Certificates of record at any time during
the prior calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Master Servicer determines and advises the Trustee
to be necessary and/or to be required by the Internal Revenue Service or by a
federal or state law or rules or regulations to enable such Holders to prepare
their tax returns for such calendar year. Such obligations shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the 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 6.06. RESERVED.

         Section 6.07. MONTHLY ADVANCES. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date and is delinquent other than as a result
of application of the Relief Act and for which the related Servicer (or in the
case of First Union, the related First Union subservicer) was required to make
an advance pursuant to the related Servicing Agreement (and for which no
required advance has been made by the related Servicer or First Union
subservicer) exceeds the amount

                                      -85-

<PAGE>

deposited in the Certificate Account which will be used for a Certificate
Account Advance with respect to such Mortgage Loan, the Master Servicer will
deposit in the Certificate Account not later than the Advancing Date immediately
preceding the related Distribution Date an amount equal to such deficiency, net
of the Master Servicing Fee and Servicing Fee for such Mortgage Loan except to
the extent the Master Servicer determines any such advance to be nonrecoverable
from Liquidation Proceeds, Insurance Proceeds or future payments on the Mortgage
Loan for which such Monthly Advance was made. Subject to the foregoing, the
Master Servicer shall continue to make such advances through the date that the
related Servicer or First Union subservicer is required to do so. Any amount
used as a Certificate Account Advance shall be replaced by the Master Servicer
by deposit in the Certificate Account on or before any future date on which and
to the extent that funds in the Certificate Account on such date are less than
the amount required to be transferred by the Master Servicer to such Certificate
Account. 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 6.08. 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 not serviced by Countrywide or First Union 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 Servicer pursuant to the related Servicing
Agreement. The Master Servicer shall not be entitled to any reimbursement of any
Compensating Interest Payment.

         Section 6.09. REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED
PROPERTY. Each year the Master Servicer shall report or cause to be reported by
the related Servicer to the Internal Revenue Service foreclosures and
abandonments of any Mortgaged Property as required by Section 6050J of the Code
and shall provide a copy of such report to the Trustee.

         Section 6.10. SURETY BOND. (a) If a Required Surety Payment is payable
pursuant to the Surety Bond with respect to any Additional Collateral Mortgage
Loans, the related Servicer shall so notify the Trustee as soon as reasonably
practicable and the Trustee shall promptly complete the notice in the form of
Attachment 1 to the Surety Bond and shall promptly submit such notice to the
surety as a claim for a required surety. The related Servicer shall upon request
assist the Trustee in completing such notice and shall provide any information
requested by the Trustee in connection therewith.

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

                                      -86-

<PAGE>

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

                                      -87-

<PAGE>

                                   ARTICLE VII

                               The Master Servicer

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

         Section 7.02. MERGER OR CONSOLIDATION OF THE MASTER SERVICER. (a) The
Master Servicer will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation,
and will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its duties under this
Agreement.

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

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

         (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

                                      -88-

<PAGE>

or representations made herein or any liability which would otherwise be imposed
by reason of such Person's willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations and
duties hereunder.

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

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

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

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

                  (f) The Master Servicer shall not be liable for any acts or
omissions of any Servicer, except as otherwise expressly provided herein. In
particular, the Master Servicer shall not be liable for any servicing errors or
interruptions resulting from any failure of any Servicer to maintain computer
and other information systems that are year-2000 compliant.

                                      -89-

<PAGE>

         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 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. If the successor master
servicer does not agree that such market value is a fair price, such successor
master servicer shall obtain two quotations of market value from third parties
actively engaged in the servicing of single-family mortgage loans.

         Section 7.07. SALE AND ASSIGNMENT OF MASTER SERVICING. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in 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.

                                      -90-

<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 such deposit was required to be made;
         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.

                                      -91-

<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 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, 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 advances deemed recoverable and not previously made) incurred by the Master
Servicer at or prior to the time of receipt by the Master Servicer of such
notice or by the Trustee of such Opinion of Independent Counsel, including any
liabilities associated with the Master Servicer's failure to modify its computer
and any other systems in a manner such that the Master Servicer can service the
Mortgage Loans in accordance with the terms of this Agreement on and after
January 1, 2000. 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

                                      -92-

<PAGE>

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 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

                                      -93-

<PAGE>

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.

                                      -94-

<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. In
addition, the Trustee shall immediately notify the Master Servicer if, on any
Funds Transfer Date, EMC or First Union fails to remit to the Trustee the funds
required to be remitted by EMC or First Union under its Servicing Agreement.

         (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;

                                      -95-

<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; and

                  (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.

         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 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, 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:

                                      -96-

<PAGE>

                  (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 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;

                                      -97-

<PAGE>

                  (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 the Mortgage Loan Seller pursuant to
         this Agreement or the Mortgage Loan Purchase Agreement or the
         eligibility of any Mortgage Loan for purposes of this Agreement.

         Section 9.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other than the signature
and countersignature of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee shall have no responsibility for their
correctness. The Trustee makes no representation as to the validity or
sufficiency of the Certificates (other than the signature and countersignature
of the Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.04 hereof; provided, however, that the foregoing
shall not relieve the Trustee or Custodian 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.

         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 will be
entitled to certain fees and reimbursement for certain expenses for its services
hereunder by the Master Servicer as mutually agreed to between the Master
Servicer and the Trustee. The Trust 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 as
set forth in a fee letter sent by

                                      -98-

<PAGE>

the Trustee to the Seller (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.

         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.

                                      -99-

<PAGE>

         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 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.

                                      -100-

<PAGE>

         (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. The Mortgage Loan Seller
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 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.

                                      -101-

<PAGE>

         (e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.

         (f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact,
with full power and authority, to do any lawful act under or with respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.

         (g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
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.

         (h) The Trustee hereby appoints Bank One, N.A. as co-trustee hereunder
for the sole and limited purpose of accepting the assignment of any Mortgage
Loan insured by FHA.

         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; REMIC ADMINISTRATION. (a) For federal income tax purposes,
the taxable year of each Series REMIC shall be a calendar year and the Master
Servicer shall maintain or cause the maintenance of the books of each Series
REMIC on the accrual method of accounting.

         (b) The Master Servicer shall prepare and file or cause to be filed
with the Internal Revenue Service Federal tax information returns or elections
required to be made by the Trustee hereunder with respect to each Series REMIC
and the Certificates containing such information and at the times and in the
manner as may be required by the Code or applicable Treasury regulations, and
shall furnish to each Holder of Certificates at any time during the calendar
year for which such returns or reports are made such statements or information
at the times and in the manner as may be required thereby. In connection with
the foregoing, the Master Servicer shall provide the name and address of the
person who can be contacted to obtain information required to be reported to the
holders of regular interests in each Series REMIC (the "REMIC Reporting Agent")
as required by

                                      -102-

<PAGE>

IRS Form 8811. The Trustee shall make the elections to treat REMIC I and REMIC
II as a REMIC (which election shall apply to the taxable period ending December
31, 2000 and each calendar year thereafter) in such manner as the Code or
applicable Treasury regulations may prescribe. The Trustee shall sign all tax
information returns filed pursuant to this Section and any other returns as may
be required by the Code. The Holder of each Class of Class R Certificate is
hereby designated as the "Tax Matters Person" (within the meaning of Treas. Reg.
ss.ss. 1.860F-4(d)) for each Series REMIC. The Master Servicer 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 Master
Servicer as agent and attorney-in-fact for the purpose of acting as Tax Matters
Person for the related Series REMIC during such time as the Master Servicer 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 Master Servicer from acting as agent for the
Tax Matters Person, the Master Servicer 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 Master Servicer shall provide upon request and upon reasonable
compensation such information (which shall be provided by the Master Servicer)
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 Master Servicer shall prepare and file or cause to be filed any
state income tax returns required under Applicable State Law with respect to
each Series REMIC or the Trust Fund.

         (e) To the extent that the affairs of the Trust Fund are within its
control and the scope of its specific responsibilities under this Agreement, the
Master Servicer shall take such action and shall cause each Series REMIC to take
such action as shall be reasonably necessary to create or maintain the status
thereof as a REMIC under the REMIC Provisions (and the Trustee shall assist it,
to the extent reasonably requested by it). Neither the Trustee nor the Master
Servicer shall knowingly or intentionally take any action, cause any Series
REMIC to take any action or fail to take (or fail to cause to be taken) any
action that, under the REMIC Provisions, if taken or not taken, as the case may
be, could (i) endanger the status of any Series REMIC as a REMIC or (ii) result
in the imposition of a tax upon any Series REMIC (including but not limited to
the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code
and the tax on contributions to a REMIC set forth in Section 860G(d) of the
Code) (either such event, an "Adverse REMIC Event") unless the Master Servicer
and the Trustee have received an Opinion of Counsel to the effect that the
contemplated action will not, with respect to any Series REMIC created
hereunder, endanger such status or result in the imposition of such a tax. The
Master Servicer may consult with counsel as to the rendering of such written
advice, and the cost of such consultation and the production of any Opinions of
Counsel, or written advice, shall be borne by the party seeking to take the
action not

                                      -103-

<PAGE>

otherwise permitted by this Agreement; provided, however that in no event shall
the Master Servicer or the Trustee be liable or responsible for such costs. The
Trustee and the Master Servicer may conclusively presume that any action taken
or omitted at the written direction or request of the holders of the Residual
Certificates or the Seller will not result in an Adverse REMIC Event, and
neither the Master Servicer nor the Trustee shall be liable or responsible for
any Adverse REMIC Event arising out of or resulting from any such action or
omission.

         (f) In the event that any tax is imposed on "prohibited transactions"
of any Series REMIC created hereunder as defined in Section 860F(a)(2) of the
Code, on "net income from foreclosure property" of the REMIC, as defined in
Section 860G(c) of the Code, on any contributions to the REMIC after the Startup
Day pursuant to Section 860G(d) of the Code, or any other tax is imposed by the
Code or any applicable provisions of state or local tax laws, such tax shall be
charged (i) against the party the actions of which gave rise to such taxes
(subject, in the case of the Master Servicer, to Section 7.04) and (ii)
otherwise against amounts on deposit in the related Certificate Account and
shall be paid by withdrawal therefrom.

         (g) On or before April 15 of each calendar year, commencing April 15,
2001, the Master Servicer shall deliver to the Trustee a Certificate from a
Responsible Officer of the Master Servicer stating the Master Servicer's
compliance with this Section 9.13.

         (h) The Trustee and the Master Servicer shall, for federal income tax
purposes, maintain books and records with respect to each Series REMIC on a
calendar year and on an accrual basis, to the extent such books and records are
maintained pursuant to this Agreement.

         (i) After the 90-day period commencing on the Startup Day, the Master
Servicer shall not accept any contributions of assets to any Series REMIC,
unless it shall have received an Opinion of Counsel (at the expense of the
person seeking to make such contribution) to the effect that the inclusion of
such assets in the Trust Fund will not cause any Series REMIC to fail to qualify
as a REMIC at any time that any Certificates are outstanding or subject any
Series REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.

         (j) Neither the Master Servicer nor the Trustee shall enter into any
arrangement by which any Series REMIC will receive a fee or other compensation
for services nor permit any Series REMIC to receive any income from assets other
than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.

         (k) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the "latest possible maturity date" for the Certificates and the
REMIC I Regular Interests is the Assumed Final Distribution Date, February 25,
2030.

         (l) Neither the Seller, the Trustee nor the Master Servicer shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of any
Series REMIC pursuant to Article X or (iv) a purchase of Mortgage Loans pursuant
to Articles II or III),

                                      -104-

<PAGE>

nor acquire any assets for the Trust Fund, nor sell or dispose of any
investments in the Certificate Account for gain, nor accept any contributions to
any Series REMIC after the Closing Date unless it has received an Opinion of
Counsel (at the expense of the party seeking to cause such sale, disposition,
substitution or acquisition, which shall not in any event be an expense of the
Master Servicer or the Trustee) indicating that such sale, disposition,
substitution or acquisition will not (a) affect adversely the status of any
Series REMIC as a REMIC or (b) cause any Series REMIC to be subject to a tax on
"prohibited transactions", "contributions" or, except as otherwise provided for
in this Agreement, "net income from foreclosure property" pursuant to the REMIC
Provisions.

         (m) Neither the Trustee nor the Master Servicer shall modify or consent
to or approve (if any such consent or approval is required) any modification of
a Mortgage Loan (including the Mortgage Interest Rate, the method of determining
the Mortgage Interest Rate, the Outstanding Principal Balance of the Mortgage
Loan, the amortization schedule, or any other term affecting the amount or
timing of payments on the Mortgage Loan or the collateral for the Mortgage
Loan), or any other material term of a Mortgage Loan unless the related
Mortgagor is in default with respect to the Mortgage Loan or such default is (in
the reasonable judgment of the Trustee or Master Servicer) reasonably
forseeable.

         Section 9.14. APPOINTMENT OF CUSTODIANS. The Trustee may, with the
consent of the Master Servicer and the Seller, appoint one or more Custodians
who are not Affiliates of the Seller or the Servicers to hold all or a portion
of the Mortgage Files as agent for the Trustee, by entering into a Custodial
Agreement. The appointment of Norwest Bank Minnesota, National Association as
Custodian under the related Custodial Agreement dated the Closing Date is hereby
authorized. Subject to Article IX, the Trustee agrees to comply with the terms
of each Custodial Agreement and to enforce the terms and provisions thereof
against the Custodian for the benefit of the Certificateholders. Each Custodian
shall be a depository institution subject to supervision by federal or state
authority, shall have a combined capital and surplus of at least $15,000,000 and
shall be qualified to do business in the jurisdiction in which it holds any
Mortgage File. Each Custodial Agreement may be amended only as provided in
Section 11.02. The Trustee shall notify the Certificateholders of the
appointment of any Custodian (other than the Custodian appointed as of the
Closing Date) pursuant to this Section 9.14.

                                      -105-

<PAGE>

                                    ARTICLE X

                                   Termination

         Section 10.01. TERMINATION UPON REPURCHASE BY THE SELLER OR ITS
DESIGNEE OR LIQUIDATION OF THE MORTGAGE LOANS. (a) Subject to Section 10.02, the
respective obligations and responsibilities of the Seller, the 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 with respect to the Mortgage Loans:

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

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

                                      -106-

<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
fifth Business Day after the Trustee receives notice of such termination, 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 the Mortgage Loans under Subsection 10.01(a)(i) above is exercised, the
Seller and/or its designee shall deliver to the Trustee for deposit in the
Certificate Account, by the Business Day prior to the applicable Distribution
Date, an amount equal to the repurchase price for the related Mortgage Loans
being purchased by it and all property acquired with respect to such Mortgage
Loans remaining in any Series REMIC. Upon the presentation and surrender of the
Certificates, the Trustee shall distribute an amount equal to (i) the amount
otherwise distributable to the related Certificateholders (other than the holder
of the Residual Certificate) on such Distribution Date but for such repurchase,
(ii) the Current Principal Amount and any accrued but unpaid interest at the
Pass-Through Rate to the related Certificateholders of each Class, and (iii) the
remainder to the Class R-I Certificateholder. If the Available Funds are not
sufficient to pay all of the related Certificates in full, any such deficiency
will be allocated to the outstanding Class or Classes of Group 1, Group 2 or
Group 3 Subordinate Certificates, respectively, having the highest numerical
designation or, if after the Group 1, Group 2 or Group 3 Cross-Over Date,
respectively, to the Group 1, Group 2 or Group 3 Senior Certificates,
respectively, PRO RATA. Upon deposit of the required repurchase price and
following such final Distribution Date, the Trustee or Custodian shall release
promptly to the Seller and/or its designee, as the case may be, 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(f).

         (f) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above,
the Master Servicer shall deliver to the Trustee for deposit in the Certificate
Account all distributable amounts remaining in the Protected Account, and shall
cause any 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 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 or Custodian 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 obligation to hold any amounts payable to
the Certificateholders in trust without interest pending final distributions
pursuant to this Subsection 10.01(f).

                                      -107-

<PAGE>

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

         Section 10.02. ADDITIONAL TERMINATION REQUIREMENTS. (a) If the option
of the Seller to repurchase all the Mortgage Loans under Subsection 10.01(a)(i)
above is exercised, the Trust Fund 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 the
REMIC or (ii) cause any Series REMIC to fail to qualify as a REMIC at any time
that any Regular Certificates are outstanding:

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

                  (ii) at or after the time of adoption of such a plan of
         complete liquidation of any of each Series REMIC 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

                  (iii) at the time of the making of the final payment on any
         such Certificates, the Trustee shall distribute or credit from the
         Certificate Account (or cause to be distributed or credited) (i) to the
         Certificateholders, other than the Holder of the corresponding Residual
         Certificates, the Current Principal Amount of the Certificates plus 30
         days' interest thereon at the applicable Pass-Through Rate, and (ii) to
         the corresponding Residual Certificateholder, all cash on hand from the
         Certificate Account (other than cash retained to meet claims); and each
         Series REMIC 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 each
Series REMIC upon the written request of the Seller and to take such action in
connection therewith as may be reasonably requested by the Seller and (ii)
appoint the Master Servicer as their attorney-in-fact, with full power of
substitution, for purposes of adopting such a plan of complete liquidation. The
Master Servicer shall adopt such plan of liquidation by filing the appropriate
statement on the final tax return of such Series REMICs.

                                      -108-

<PAGE>

                                   ARTICLE XI

                            Miscellaneous Provisions

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

         Section 11.02. AMENDMENT. (a) This Agreement may be amended from time
to time by the Seller, 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 any Series REMIC 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 Fractional Undivided Interests with respect to
matters affecting such Certificates.

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

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

                                      -109-

<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

                                      -110-

<PAGE>

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

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

         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, 1761 E. St. Andrew Place, Santa Ana, California 92705, Attention: SAMI
2000-1 (BS2000-1), telecopier number: (714) 247-6465, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the Master Servicer, 11000 Broken Land Parkway, Columbia, Maryland 21044
(Attention: SAMI 2000- 1), telecopier number: (410) 884-2360; (iv) in the case
of the Rating Agencies, Standard & Poor's, 55 Water Street, New York, New York,
10041, Attention: Residential Mortgage Surveillance, telecopier number: (212)
412-0224, Duff & Phelps Credit Rating Co., 17 State Street, New York, New York
10004, Attention: RMBS Monitoring Group and Moody's Investors Service, Inc., 99
Church Street, 4th Floor, New York, New York 10004; or (v) in the case of
Thornburg Mortgage, Inc., Thornburg Mortgage Asset Corporation 119 East Marcy
Street, Suite 201, Santa Fe, New Mexico 87501, Attention: Deborah Burns. Any
notice delivered to the Seller, the Master Servicer or the Trustee under this
Agreement shall be effective only upon receipt. Any notice required or permitted
to be mailed to a Certificateholder, unless otherwise provided herein, shall be
given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given when mailed, whether or not the Certificateholder receives
such notice.

                                      -111-

<PAGE>

         Section 11.08. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.

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

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

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

         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 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 6.04 and Section 3.19, the
Trustee and the Master Servicer, respectively, shall promptly furnish to each
Rating Agency copies of the following:

         1. Each report to Certificateholders described in Section 6.04; and

         2. Each annual independent public accountants' servicing report
received as described in Section 3.19.

                                      -112-

<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:

                                       BANKERS TRUST COMPANY, as Trustee

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

                                       NORWEST BANK MINNESOTA,
                                       NATIONAL ASSOCIATION, as
                                       Master Servicer

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

Accepted and Agreed:

EMC MORTGAGE CORPORATION

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

<PAGE>

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

         On the 28th day of January, 2000 before me, a notary public in and for
said State, personally appeared ______________________________, known to me to
be a ___________________ of Structured Asset Mortgage Investments Inc., the
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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

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

[Notarial Seal]

<PAGE>

STATE OF          )
                  ) ss.:
COUNTY OF         )

         On the 28th day of January, 2000 before me, a notary public in and for
said State, personally appeared ______________________________, known to me to
be a _______________________ of Bankers Trust Company, 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 28th day of January, 2000 before me, a notary public in and for
said State, personally appeared ______________________________, known to me to
be an ______________________ of Norwest Bank Minnesota, National Association,
the corporation that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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

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

[Notarial Seal]

<PAGE>

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

         On the 28th day of January, 2000 before me, a notary public in and for
said State, personally appeared ______________________________, known to me to
be a _______________________ of EMC Mortgage Corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                             ----------------------------
                                                    Notary Public
[Notarial Seal]

<PAGE>

                                                                     EXHIBIT A-1

              FORM OF CLASS [I-A-___][II-A-1][III-A-1] CERTIFICATE

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

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

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

          [THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS JANUARY 28, 2000.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT 100% OF THE PREPAYMENT ASSUMPTION (AS
DESCRIBED IN THE PROSPECTUS SUPPLEMENT), AND ASSUMING A CONSTANT PASS-THROUGH
RATE EQUAL TO THE INITIAL PASS-THROUGH RATE, THIS CERTIFICATE HAS BEEN ISSUED
WITH NO MORE THAN $[_______] OF OID PER $1,000 OF INITIAL CURRENT PRINCIPAL
AMOUNT, THE YIELD TO MATURITY IS [______]% AND THE AMOUNT OF OID ATTRIBUTABLE TO
THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $[_____] PER $1,000 OF INITIAL
CURRENT PRINCIPAL AMOUNT, COMPUTED USING THE APPROXIMATE METHOD. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]

                                      A-1-1

<PAGE>

Certificate No. __                         [______%][Variable] Pass-Through Rate

Class [I-A-___][II-A-1][III-A-1] Senior

Date of Pooling and Servicing              Aggregate Initial [Current Principal
                                           Amount][Notional Amount] of this
                                           Certificate as of the Cut-off Date:
                                           $___________________

First Distribution Date:                   Initial Current Principal Amount of
February 25, 2000                          this Certificate as of the Cut-off
                                           Date:  $___________________

Master Servicer:
Norwest Bank Minnesota, National
Association

Assumed Final Distribution Date:           CUSIP __________
February 25, 2030

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2000-1

     evidencing  a  fractional  undivided  interest  in  the  distributions
     allocable  to the Class  [I-A-__][II-A-1][III-A-1]  Certificates  with
     respect to a Trust Fund consisting primarily of a pool of conventional
     one- to  four-family  adjustable  interest rate mortgage loans sold by
     STRUCTURED ASSET MORTGAGE INVESTMENTS INC.

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

          This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional first lien, adjustable rate
mortgages loans secured by one- to four- family residences, units in planned
unit developments and individual condominium and cooperative units
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to SAMI. Norwest Bank Minnesota, National Association
("Norwest") will act as master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the

                                      A-1-2

<PAGE>

"Agreement"), among SAMI, as seller (the "Seller"), Norwest, as master servicer
and Bankers Trust Company, as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.

          Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
[Current Principal Amount][Notional Amount] hereof at a per annum rate equal to
the Pass-Through Rate set forth above. The Trustee will distribute on the 25th
day of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day (or if such last
day is not a Business Day, the Business Day immediately preceding such last day)
of the calendar month preceding the month of such Distribution Date, an amount
equal to the product of the Fractional Undivided Interest evidenced by this
Certificate and the amount (of interest and principal, if any) required to be
distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the first anniversary of the
Distribution Date immediately following the latest scheduled maturity date of
any Mortgage Loan and is not likely to be the date on which the [Current
Principal Amount][Notional Amount] of this Class of Certificates will be reduced
to zero.

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

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

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

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

                                      A-1-3

<PAGE>

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

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

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

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

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

                                      A-1-4

<PAGE>

Agreement continue beyond the expiration of 21 years after the death of certain
persons identified in the Agreement.

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

                                      A-1-5

<PAGE>

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

Dated: January 28, 2000               BANKERS TRUST COMPANY
                                      Not in its individual capacity but solely
                                      as Trustee

                                      By:______________________________________
                                               Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class [I-A-__][II-A-1][III-A-1]
Certificates referred to in the within-mentioned Agreement.

                                      BANKERS TRUST COMPANY
                                      Authorized signatory of Bankers Trust
                                      Company, not in its individual capacity
                                      but solely as Trustee

                                      By:______________________________________
                                               Authorized Signatory

                                      A-1-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

_______________________________________________________________________________

_______________________________________________________________________________

Dated:                         ________________________________________________
                                     Signature by or on behalf of assignor

                                      _________________________________________
                                                Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________ account number _____________,
or, if mailed by check, to _________________________________________. Applicable
statements should be mailed to ______________________________________.

          This information is provided by ______________________, the assignee
named above, or ____________________________, as its agent.

<PAGE>

                                                                     EXHIBIT A-2

              FORM OF CLASS [I-B-__][II-B-__][III-B-__] CERTIFICATE

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

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

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

          [THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,

                                      A-2-1

<PAGE>

SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER
IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND
ANY OTHER APPLICABLE JURISDICTION.]

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

          [THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS JANUARY 28, 2000.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT 100% OF THE PREPAYMENT ASSUMPTION (AS
DESCRIBED IN THE PROSPECTUS SUPPLEMENT), AND ASSUMING A CONSTANT PASS-THROUGH
RATE EQUAL TO THE INITIAL PASS-THROUGH RATE, THIS CERTIFICATE HAS BEEN ISSUED
WITH NO MORE THAN $[_______] OF OID PER $1,000 OF INITIAL CURRENT PRINCIPAL
AMOUNT, THE YIELD TO MATURITY IS [______]% AND THE AMOUNT OF OID ATTRIBUTABLE TO
THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $[_____] PER $1,000 OF INITIAL
CURRENT PRINCIPAL AMOUNT, COMPUTED USING THE APPROXIMATE METHOD. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]

                                      A-2-2

<PAGE>

Certificate No. 1                      Variable Pass-Through Rate

Class [I-B-__][II-B-__][III-B-__]

Date of Pooling and Servicing          Aggregate Initial Current Principal of
Agreement and Cut-off Date:            this Certificate as of the Cut-off Date:
January 1, 2000                        $___________

First Distribution Date:               Initial Current Principal Amount of this
February 25, 2000                      Certificate as of the Cut-off Date:
                                       $__________

Master Servicer:
Norwest Bank Minnesota,
National Association

Assumed Final Distribution Date:       CUSIP __________
February 25, 2030

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2000-1

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

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

          This certifies that _______________ is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional first lien, adjustable rate
mortgages loans secured by one- to four- family residences, units in planned
unit developments and individual condominium and cooperative units
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to SAMI. Norwest Bank Minnesota, National Association
("Norwest") will act as master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund

                                      A-2-3

<PAGE>

was created pursuant to the Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement"), between SAMI, as seller (the
"Seller"), Bankers Trust Company, as trustee (the "Trustee") and Norwest, as
master servicer (the "Master Servicer"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.

          Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum rate equal to the Pass-Through
Rate set forth above. The Trustee will distribute on the 25th day of each month,
or, if such 25th day is not a Business Day, the immediately following Business
Day (each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day (or if such last day is not a
Business Day, the Business Day immediately preceding such last day) of the
calendar month preceding the month of such Distribution Date, an amount equal to
the product of the Fractional Undivided Interest evidenced by this Certificate
and the amount (of interest and principal, if any) required to be distributed to
the Holders of Certificates of the same Class as this Certificate. The Assumed
Final Distribution Date is the first anniversary of the Distribution Date
immediately following the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.

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

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

                                      A-2-4

<PAGE>

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

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

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

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

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

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

          No service charge will be made to the Certificateholders for any such
registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the

                                      A-2-5

<PAGE>

owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.

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

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

                                      A-2-6

<PAGE>

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

Dated: January 28, 2000               BANKERS TRUST COMPANY
                                      Not in its individual capacity but solely
                                      as Trustee

                                      By:_______________________________________
                                              Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

          This is one of the Class [I-B-__][II-B-__][III-B-__] Certificates
referred to in the within-mentioned Agreement.

                                      BANKERS TRUST COMPANY
                                      Authorized signatory of Bankers Trust
                                      Company, not in its  individual capacity
                                      but solely as Trustee

                                      By:_______________________________________
                                               Authorized Signatory

                                      A-2-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

_______________________________________________________________________________

_______________________________________________________________________________

Dated:                    _____________________________________________________
                               Signature by or on behalf of assignor

                                      _________________________________________
                                              Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________ account number __________,
or, if mailed by check, to _________________________________________. Applicable
statements should be mailed to _______________________________________.

          This information is provided by ______________________, the assignee
named above, or ____________________________, as its agent.

                                      A-2-8

<PAGE>

                                                                     EXHIBIT A-3

                        FORM OF CLASS [R-__] CERTIFICATE

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

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

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

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

                                      A-3-1

<PAGE>

IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.

                                      A-3-2

<PAGE>

Certificate No. 1                     Variable Pass-Through Rate

Class [R-__] Senior

Date of Pooling and Servicing         Aggregate Initial Current Principal Amount
Agreement and Cut-off Date:           of this Certificate as of the Cut-off
January 1, 2000                       Date:  $50.00

First Distribution Date:              Initial Current Principal Amount of this
February 25, 2000                     Certificate as of the Cut-off Date: $50.00

Master Servicer:
Norwest Bank Minnesota,
National Association

Assumed Final Distribution Date:      CUSIP __________
February 25, 2030

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2000-1

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

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

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

                                      A-3-3

<PAGE>

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

          Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum rate equal to the Pass-Through
Rate set forth above. The Trustee will distribute on the 25th day of each month,
or, if such 25th day is not a Business Day, the immediately following Business
Day (each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day (or if such last day is not a
Business Day, the Business Day immediately preceding such last day) of the
calendar month preceding the month of such Distribution Date, an amount equal to
the product of the Fractional Undivided Interest evidenced by this Certificate
and the amount (of interest and principal, if any) required to be distributed to
the Holders of Certificates of the same Class as this Certificate. The Assumed
Final Distribution Date is the first anniversary of the Distribution Date
immediately following the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.

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

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

                                      A-3-4

<PAGE>

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

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

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

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

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

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

                                      A-3-5

<PAGE>

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

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

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

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

                                      A-3-6

<PAGE>

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

Dated: January 28, 2000               BANKERS TRUST COMPANY
                                      Not in its individual capacity but solely
                                      as Trustee

                                      By:_______________________________________
                                                  Authorized Signatory

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

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

                                      BANKERS TRUST COMPANY
                                      Authorized signatory of Bankers Trust
                                      Company, not in its  individual capacity
                                      but solely as Trustee

                                      By:_______________________________________
                                               Authorized Signatory

                                      A-3-7

<PAGE>

                                   ASSIGNMENT

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

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

_______________________________________________________________________________

_______________________________________________________________________________

Dated:                _________________________________________________________
                            Signature by or on behalf of assignor

                                      _________________________________________
                                            Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________ account number __________,
or, if mailed by check, to _________________________________________. Applicable
statements should be mailed to _______________________________________.

          This information is provided by ______________________, the assignee
named above, or ____________________________, as its agent.

                                      A-3-8

<PAGE>

                                                                     EXHIBIT B-1

                         GROUP 1 MORTGAGE LOAN SCHEDULE

                            (Available upon request)

                                      B-1-1

<PAGE>

                                                                     EXHIBIT B-2

                         GROUP 2 MORTGAGE LOAN SCHEDULE

                            (Available upon request)

                                      B-2-1

<PAGE>

                                                                     EXHIBIT B-3

                         GROUP 3 MORTGAGE LOAN SCHEDULE

                            (Available upon request)

                                      B-3-1

<PAGE>

                                                                       EXHIBIT C

                      REPRESENTATIONS AND WARRANTIES OF EMC
                          CONCERNING THE MORTGAGE LOANS

               [SEE SECTION 7 OF MORTGAGE LOAN PURCHASE AGREEMENT]

                                       C-1

<PAGE>

                                                                       EXHIBIT D

                        REQUEST FOR RELEASE OF DOCUMENTS

                                                                          [DATE]
To:  Bankers Trust Company,
     as Trustee
     123 Washington Avenue
     New York, New York 10006

or

     Norwest Bank Minnesota, National Association
     1015 10th Avenue S.E.
     MS 0031
     Minneapolis, Minnesota 55414

     RE:  Pooling and Servicing Agreement dated as of January 1, 2000, among
          Structured Asset Mortgage Investments Inc., Norwest Bank Minnesota,
          National Association, Inc., as Master Servicer and Bankers Trust
          Company, as Trustee, regarding Structured Asset Mortgage Investments
          Trust 2000-1, Mortgage Pass-Through Certificates, Series 2000-1
          --------------------------------------------------------------------

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

MORTGAGE LOAN NUMBER:

MORTGAGOR NAME, ADDRESS & ZIP CODE:

REASON FOR REQUESTING DOCUMENTS (check one):

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

______   2.   Foreclosure

______   3.   Substitution

______   4.   Other Liquidation

______   5.   Nonliquidation

______   6.   Other Reason:_______________________________________

                                       D-1

<PAGE>

                                    By:_______________________________________
                                                 (authorized signer)

                                    Issuer:___________________________________
                                    Address:__________________________________
                                    Date:_____________________________________

                                       D-2

<PAGE>

TRUSTEE

Bankers Trust Company

Please acknowledge the execution of the above request by your signature and date
below:

_______________________________     _______________________
Signature                           Date

Documents returned to Trustee:

_______________________________     _______________________
Trustee                             Date

Date:______________

     ___________________________________
     [NAME OF MASTER SERVICER]

     By: _______________________________
         Name:
         Title:

                                       D-3

<PAGE>

                                                                       EXHIBIT E

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

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

STATE OF       )
               )ss:
COUNTY OF      )

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

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

     2. That (i) the Investor is not a "disqualified organization" as defined in
Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the
"Code"), and will not be a disqualified organization as of [Closing Date] [date
of purchase]; (ii) it is not acquiring the Structured Asset Mortgage Investments
Inc. Mortgage Pass-Through Certificates, Series 2000-1, Class [R-__]
Certificates (the "Residual Certificates") for the account of a disqualified
organization; (iii) it consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by Structured Asset Mortgage
Investments Inc. (upon advice of counsel) to constitute a reasonable arrangement
to ensure that the Residual Certificates will not be owned directly or
indirectly by a disqualified organization; and (iv) it will not transfer such
Residual Certificates unless (a) it has received from the transferee an
affidavit in substantially the same form as this affidavit containing these same
four representations and (b) as of the time of the transfer, it does not have
actual knowledge that such affidavit is false.

     3. That the Investor is one of the following: (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity taxable as
such created or organized in or under the laws of the United States or any
political subdivision thereof or (iii) an estate that is subject to U.S. federal
income tax regardless of the source of its income, or (iv) a trust other than a
"foreign trust," as defined in Section [7701 (a)(3 1 )] of the Code.

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

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

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

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

                                       E-1

<PAGE>

     IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to authority of its Board of Directors, by its [Title of
Officer] this____ day of __________,200__.

                               [NAME OF INVESTOR]

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

                                   Address of Investor for receipt of tax
                                   information:

                                       E-2

<PAGE>

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

     Subscribed and sworn before me this ___ day of _____________, 200__.

NOTARY PUBLIC

COUNTY OF

STATE OF

     My commission expires the ___ day of _____________, 200__.

                                       E-3

<PAGE>

                                                                     EXHIBIT F-1

                            FORM OF INVESTMENT LETTER

                                                                          [Date]

Bankers Trust Company
123 Washington Street
New York, New York 10006

Structured Asset Mortgage Investments Inc.
245 Park Avenue
New York, New York 10167

      Re: SAMI Series 2000-1 Mortgage Pass-Through Certificates (the
          "Certificates"), including the [Class [I-][II-][III-]B-4, Class
          [I-][II-][III-]B-5 and [I-][II-][III-]Class B-6] Certificates (the
          "Privately Offered Certificates")
          ------------------------------------------------------------------

Dear Ladies and Gentlemen:

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

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

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

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

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

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

                                      F-1-1

<PAGE>

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

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

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

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

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

          (viii)we either: (i) are not acquiring the Privately Offered
               Certificate directly or indirectly by, or on behalf of, an
               employee benefit plan or other retirement arrangement which is
               subject to Title I of the Employee Retirement Income Security Act
               of 1974, as amended, and/or section 4975 of the Internal Revenue
               Code of 1986, as amended, or (ii) are providing a representation
               or an opinion of counsel to the effect that the proposed transfer
               and/or holding of a Privately Offered Certificate and the
               servicing, management and/or operation of the Trust and its
               assets: (I) will not result in any prohibited transaction which
               is not covered under an individual or class prohibited
               transaction exemption, including, but not limited to, Prohibited
               Transaction Exemption ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE
               95-60, PTE 96-23 or

                                     F-1-2

<PAGE>

               Section 401(c) of ERISA and the regulations promulgated
               thereunder and (II) will not give rise to any additional
               fiduciary duties on the part of the Seller, the Master Servicer
               or the Trustee.

          (ix) We understand that each of the [Class [I-][II-][III-]B-4, Class
               [I-][II-][III-]B-5 and [I-][II- ][III-]Class B-6] Certificates
               bears, and will continue to bear, a legend to substantiate the
               following effect: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
               REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
               "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER
               HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS
               CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
               TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
               APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
               SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER
               REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
               MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR
               A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS
               INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER
               TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO
               AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
               SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
               "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN
               RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR
               ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
               PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE
               SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A
               LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
               (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE
               TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS
               IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
               OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS
               OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION. THIS
               CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
               BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
               ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
               RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, AND/OR
               SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
               UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND
               THE SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS

                                     F-1-3

<PAGE>

               ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH
               IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED
               TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED
               TRANSACTION EXEMPTION ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE
               95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
               FIDUCIARY OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER
               SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN
               OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND
               WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO
               SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL ACCREDITED
               INVESTOR."

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

     Terms not otherwise defined herein shall have the meanings assigned to them
in the Pooling and Servicing Agreement dated as of January 1, 2000 among
Structured Asset Mortgage Investments Inc. and Bankers Trust Company, as Trustee
(the "Pooling and Servicing Agreement").

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

Name of Nominee (if any):___________________________

                                      F-1-4

<PAGE>

     IN WITNESS WHEREOF, this document has been executed by the undersigned who
is duly authorized to do so on behalf of the undersigned Eligible Purchaser on
the____ day of _______, 200__.

                                     Very truly yours,

                                     [PURCHASER]

                                     By:___________________________________
                                             (Authorized Officer)

                                    [By:___________________________________
                                              Attorney-in-fact]

                                      F-1-5

<PAGE>

                             Nominee Acknowledgment

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

                                     [NAME OF NOMINEE]

                                     By:___________________________________
                                         (Authorized Officer)

                                     [By:__________________________________
                                           Attorney-in-fact]

                                      F-1-6

<PAGE>

                                                                     EXHIBIT F-2

                FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE

                                                                          [Date]

Bankers Trust Company
3 Park Plaza, 16th Floor
Irvine, California 92614

Structured Asset Mortgage Investments Inc.
245 Park Avenue
New York, New York 10167

         Re:   SAMI Series 2000-1 Mortgage Pass-Through Certificates, [Class
               [I-][II-][III-]B-4, Class [I-][II-][III-]B-5 and Class
               [I-][II-][III-]B-6] Certificates (the "Privately Offered
               Certificates")
               --------------------------------------------------------------

Dear Ladies and Gentlemen:

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

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

     Date: ______________, 19__ (must be on or after the close of its most
     recent fiscal year)

     Amount: $_____________; and

2.   The dollar amount set forth above is:

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

          (a)  / /  an insurance company as defined in Section 2(13) of the
                    Act/1; or

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

________________

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

                                      F-2-1

<PAGE>

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

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

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

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

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

          (h)  / /  an investment adviser registered under the Investment
                    Advisers Act; or

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

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

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

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

     The undersigned further certifies that it is purchasing a Privately Offered
Certificate for its own account or for the account of others that independently
qualify as "Qualified Institutional Buyers" as defined in Rule 144A. It is aware
that the sale of the Privately Offered Certificates is being made in reliance on
its continued compliance with Rule 144A. It is aware that the transferor may
rely on the exemption from the provisions of Section 5 of the Act provided by
Rule 144A. The undersigned understands that the Privately Offered Certificates
may be resold, pledged or transferred only to (i) a person reasonably believed
to be a Qualified Institutional Buyer that purchases for its own account or for
the account of a Qualified Institutional Buyer to whom notice is given that the

                                     F-2-2

<PAGE>

resale, pledge or transfer is being made in reliance in Rule 144A, or (ii) an
institutional "accredited investor," as such term is defined under Rule 501 of
the Act in a transaction that otherwise does not constitute a public offering.

     The undersigned agrees that if at some future time it wishes to dispose of
or exchange any of the Privately Offered Certificates, it will not transfer or
exchange any of the Privately Offered Certificates to a Qualified Institutional
Buyer without first obtaining a Rule 144A and Related Matters Certificate in the
form hereof from the transferee and delivering such certificate to the
addressees hereof. Prior to making any transfer of Privately Offered
Certificates, if the proposed

     Transferee is an institutional "accredited investor," the transferor shall
obtain from the transferee and deliver to the addressees hereof an Investment
Letter in the form attached to the Pooling and Servicing Agreement dated as of
January 1, 2000 among Structured Asset Mortgage Investments Inc. and Bankers
Trust Company, as Trustee, pursuant to Certificates were issued.

     The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, and/or
section 4975 of the Internal Revenue Code of 1986, as amended, or (ii) is
providing a representation or an opinion of counsel to the effect that the
proposed transfer and/or holding of a Privately Offered Certificate and the
servicing, management and/or operation of the Trust and its assets: (I) will not
result in any prohibited transaction which is not covered under a prohibited
transaction exemption, including, but not limited to, Prohibited Transaction
Exemption ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60, PTE 96-23 or Section
401(c) of ERISA and the regulations to be promulgated thereunder and (II) will
not give rise to any additional fiduciary duties on the part of the Seller, the
Master Servicer or the Trustee.

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

                                      F-2-3

<PAGE>

Name of Nominee (if any):

IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on
the___ day of ________, 200__.

                                   Very truly yours,

                                   [PURCHASER]

                                   By:___________________________________
                                           (Authorized Officer)

                                   [By:___________________________________
                                            Attorney-in-fact]

                                      F-2-4

<PAGE>

                             Nominee Acknowledgment

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

                                   [NAME OF NOMINEE]

                                   By:___________________________________
                                            (Authorized Officer)

                                   [By:___________________________________
                                              Attorney-in-fact]

                                      F-2-5

<PAGE>

                                                                       EXHIBIT G

                           FORM OF CUSTODIAL AGREEMENT

          THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement"), dated as of January 28, 2000, by and among BANKERS TRUST
COMPANY, as trustee (including its successors under the Pooling and Servicing
Agreement defined below, the "Trustee"), STRUCTURED ASSET MORTGAGE INVESTMENTS
INC., as company (together with any successor in interest, the "Company"),
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as master servicer (together with
any successor in interest or successor under the Pooling and Servicing Agreement
referred to below, the "Master Servicer") and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as custodian (together with any successor in interest or any
successor appointed hereunder, the "Custodian").

                        W I T N E S S E T H   T H A T :
                        -------------------   -------

          WHEREAS, the Company, the Master Servicer and the Trustee have entered
into a Pooling and Servicing Agreement, dated as of January 1, 2000, relating to
the issuance of Structured Asset Mortgage Investments Inc., Mortgage
Pass-Through Certificates, Series 2000-1 (as in effect on the date of this
agreement, the "Original Pooling and Servicing Agreement," and as amended and
supplemented from time to time, the "Pooling and Servicing Agreement"); and

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

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

                                    ARTICLE I

                                   Definitions

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

                                       G-1

<PAGE>

                                   ARTICLE II

                          Custody of Mortgage Documents

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

          Section 2.2. RECORDATION OF ASSIGNMENTS. If any Mortgage File includes
one or more assignments of Mortgage to the Trustee that have not been recorded,
each such assignment shall be delivered by the Custodian to the Company for the
purpose of recording it in the appropriate public office for real property
records, and the Company, at no expense to the Custodian, shall promptly cause
to be recorded in the appropriate public office for real property records each
such assignment of Mortgage and, upon receipt thereof from such public office,
shall return each such assignment of Mortgage to the Custodian; PROVIDED,
HOWEVER, that such assignments need not be recorded if the Custodian receives
from the Company an Opinion of Counsel pursuant to Section 2.01 of the Pooling
and Servicing Agreement.

          Section 2.3. REVIEW OF MORTGAGE FILES.

          (a) On or prior to the Closing Date, in accordance with Section 2.02
of the Pooling and Servicing Agreement, the Custodian shall deliver to the
Trustee an Initial Certification in the form annexed hereto as Exhibit One
evidencing receipt (subject to any exceptions noted therein) of a Mortgage File
for each Group 1 and Group 2 Mortgage Loan listed on the Schedule attached
hereto (the "Mortgage Loan Schedule").

          (b) Within 45 days of the Closing Date, the Custodian agrees, for the
benefit of Certificateholders, to review, in accordance with the provisions of
Section 2.02 of the Pooling and Servicing Agreement, each such document, and
shall deliver to the Trustee an Interim Certification in the form annexed hereto
as Exhibit Two to the effect that all such documents have been executed and
received and that such documents relate to the Mortgage Loans identified on the
Mortgage Loan Schedule, except for any exceptions listed on Schedule A attached
to such Interim Certification; PROVIDED, HOWEVER, with respect to any Mortgage
Files relating to the Group 3 Mortgage Loans not delivered to the Custodian
within five (5) Business Days after the Closing Date, the Custodian shall
deliver the Interim Certification within 45 days of receipt of such Mortgage
Files. The Custodian shall be under no duty or obligation to inspect, review or
examine said documents, instruments, certificates or other papers to determine
that the same are genuine, enforceable, or appropriate for the represented
purpose or that they have actually been recorded or that they are other than
what they purport to be on their face.

          (c) Not later than 180 days after the Closing Date, the Custodian
shall review the Mortgage Files as provided in Section 2.02 of the Pooling and
Servicing Agreement and deliver to

                                      G-2

<PAGE>

the Trustee a Final Certification in the form annexed hereto as Exhibit Three
evidencing the completeness of the Mortgage Files.

          (d) In reviewing the Mortgage Files as provided herein and in the
Pooling and Servicing Agreement, the Custodian shall make no representation as
to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.

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

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

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

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

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

                                       G-3

<PAGE>

Mortgaged Property either judicially or non-judicially, and the related Servicer
has delivered to the Custodian a certificate of a Servicing Officer certifying
as to the name and address of the Person to which such Mortgage File or such
document was delivered and the purpose or purposes of such delivery.

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

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

                                   ARTICLE III

                            Concerning the Custodian

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

          Section 3.2. [Reserved]

                                       G-4

<PAGE>

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

          Section 3.4. MASTER SERVICER TO PAY CUSTODIAN'S FEES AND EXPENSES. The
Master Servicer covenants and agrees to pay to the Custodian from time to time,
and the Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith or to the extent that such cost or expense is
indemnified for by the Company pursuant to the Pooling and Servicing Agreement.

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

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

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

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

                                      G-5

<PAGE>

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

                                   ARTICLE IV

                            Miscellaneous Provisions

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

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

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

          Section 4.4. RECORDATION OF AGREEMENT. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Company and at the Trust's expense on
direction by the Trustee, but only upon direction accompanied by an Opinion of
Counsel reasonably satisfactory to the Company to the effect that the failure to
effect such recordation is likely to materially and adversely affect the
interests of the Certificateholders.

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

          Section 4.5. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid,

                                      G-6

<PAGE>

then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of the Certificates or the rights of the holders
thereof.

                                       G-7

<PAGE>

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

Address:                                BANKERS TRUST COMPANY
                                       as Trustee
123 Washington Street
New York, New York 10006

Attention: SAMI
           Series 2000-1
                                       By:___________________________________
                                       Name:
                                       Title:

Address:                               STRUCTURED ASSET MORTGAGE
                                       INVESTMENTS INC.
245 Park Avenue
New York, New York 10167

                                       By:___________________________________
                                       Name:
                                       Title:

Address:                               NORWEST BANK MINNESOTA,
                                       NATIONAL ASSOCIATION, as
                                       Master Servicer
11000 Broken Land Parkway
Columbia, Maryland 21044
                                       By:___________________________________
                                       Name:
                                       Title:

Address:                               NORWEST BANK MINNESOTA,
                                       NATIONAL ASSOCIATION, as Custodian
1015 10th Avenue S.E., MS 0031
Minneapolis, Minnesota 55414

                                       By:___________________________________
                                       Name:
                                       Title:

                                       G-8

<PAGE>

STATE OF             )
                     ) ss:
COUNTY OF            )

          On the 28th day of January, 2000, before me, a notary public in and
for said State, personally appeared _________________________, known to me to be
a ___________________ of Bankers Trust Company, a national banking association
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation and acknowledged to me that such
corporation executed the within instrument.

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

                                       ___________________________________
                                                   Notary Public

[SEAL]

                                       G-9

<PAGE>

STATE OF NEW YORK        )
                         ) ss:
COUNTY OF                )

          On the 28th day of January, 2000, before me, a notary public in and
for said State, personally appeared Randall S. Reider, known to me to be a Trust
Officer of Norwest Bank Minnesota, National Association, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national banking association, and
acknowledged to me that such national banking association executed the within
instrument.

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

                                       ___________________________________
                                                  Notary Public

[SEAL]

                                      G-10

<PAGE>

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

          On the 28th day of January, 2000, before me, a notary public in and
for said State, personally appeared ________________________, known to me to be
a _____________________ of Structured Asset Mortgage Investments Inc., one of
the corporations that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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

                                       ___________________________________
                                              Notary Public

[Notarial Seal]

                                      G-11

<PAGE>

                                                                       EXHIBIT H

                                THORNBURG REPORT

     The Report shall set forth the following information with respect to each
Group 3 Mortgage Loan:

     (i)    Master Servicer Loan Number, if any ("Loan ID");

     (ii)   Servicer Loan Number ("Servicer ID");

     (iii)  Thornburg Loan Number ("Other Loan ID");

     (iv)   Cutoff Date ("Cutoff Date");

     (v)    Actual Principal Balance ("Current Balance");

     (vi)   Note Rate ("Note Rate");

     (vii   Principal & Interest Payment ("Current PI");

     (viii) Scheduled Principal Balance ("Schedule Balance");

     (ix)   Scheduled Interest Paid to Date ("Sched.Int.Pd. to Date");

     (x)    Flag ("Bankrupt");

     (xi)   Flag ("Foreclose"); and

     (xii)  Flag ("Payoff").

                                       H-1

<PAGE>

                                                                       EXHIBIT I

                                   [RESERVED]

                                       I-1

<PAGE>

                                                                       EXHIBIT J

                                   [RESERVED]

                                       J-1

<PAGE>

                                                                       EXHIBIT K

            LIST OF MORTGAGE LOANS FOR WHICH MORTGAGE NOTES ARE LOST

                            (Available upon request)

                                       K-1

<PAGE>

                                                                       EXHIBIT L

                                   [RESERVED]

                                       L-1

<PAGE>

                                                                       EXHIBIT M

                                   [RESERVED]

                                       M-1

<PAGE>

                                                                     EXHIBIT N-1

                            CHASE SERVICING AGREEMENT

                            (Available upon request)

                                      N-1-1

<PAGE>

                                   EXHIBIT N-2

                             EMC SERVICING AGREEMENT

                            (Available upon request)

                                      N-2-1

<PAGE>

                                   EXHIBIT N-3

                          ALLIANCE SERVICING AGREEMENT

                            (Available upon request)

                                      N-3-1

<PAGE>

                                   EXHIBIT N-4

                         COUNTRYWIDE SERVICING AGREEMENT

                            (Available upon request)

                                      N-4-1

<PAGE>

                                   EXHIBIT N-5

                         FIRST UNION SERVICING AGREEMENT

                            (Available upon request)

                                      N-5-1

<PAGE>

                                   EXHIBIT N-6

                         SOUTHTRUST SERVICING AGREEMENTS

                            (Available upon request)

                                      N-6-1

<PAGE>

                                   EXHIBIT N-7

                           CENDANT SERVICING AGREEMENT

                            (Available upon request)

                                      N-7-1

<PAGE>

                                   EXHIBIT N-8

                          CITICORP SERVICING AGREEMENT

                            (Available upon request)

                                      N-8-1

<PAGE>

                                   EXHIBIT N-9

                            MLCC SERVICING AGREEMENT

                            (Available upon request)

                                      N-9-1

<PAGE>

                                  EXHIBIT N-10

                            GMAC SERVICING AGREEMENT

                            (Available upon request)

                                     N-10-1<PAGE>

                                 PROMISSORY NOTE

--------------                                                New York, New York
10%                                                             December 8, 1999

FOR VALUE RECEIVED, the undersigned, PREDICT IT INC., a Delaware corporation
("Maker"), promises to pay to the order of ____________________ ("Payee"), at
New York City, New York, or such other place as Payee may from time to time
designate by written notice to Maker, in lawful money of the United States of
America, the sum of Two Hundred Fifty Thousand Dollars ($250,000), plus interest
from the date of this Note on the unpaid balance. All principal and interest is
to be paid without setoff or counterclaim as set forth below. Maker further
agrees as follows:

Section 1. Interest Rate and Conversion Right.

         (a) Interest shall accrue at a rate equal to ten percent (10%) per
annum, compounded annually.

         (b) Interest shall be computed on the basis of a year of 365 days for
the actual number of days elapsed. After maturity (whether by acceleration or
otherwise, and before as well as after judgment), all unpaid principal and
interest shall bear interest until it is paid at three percent (3%) in excess of
the rate otherwise applicable to the unpaid balance under this Note.

         (c) At the options of the Payee, interest on the Note may be paid in
shares of common stock of the Company, which shares shall be valued at $1.60 per
share.

         (d) All agreements between Maker and Payee are expressly limited so
that in no contingency or event whatsoever shall the amount paid or agreed to be
paid to Payee for the use, forbearance, or detention of the indebtedness
evidenced by this Note exceed the maximum amount permissible under applicable
law. If from any circumstance Payee should ever receive as interest an amount
which would exceed the highest lawful rate, such amount as would be excessive
interest shall be applied to the reduction of the principal amount owing under
this Note and not to the payment of interest.

         (e) At the options of the Payee, upon the first round of financing of
the Maker which occurs subsequent to the date hereof, this Note or any portion
of the principal amount thereof, and the interest related thereto may, at any
time and from time to time until this Note is satisfied in full, be converted
into the securities of the Maker which are sold in such financing. Such
securities shall be treated, upon conversion of this Note, as fully paid and
nonassessable. The amount of such securities which shall be received upon such
conversion

<PAGE>

shall be equal to a fraction, the numerator of which is the dollar amount of the
principal and interest being satisfied by the conversion, and the denominator of
which is the per security purchase price which is paid by the investors in such
financing.

Section 2. Payments.

         (a) Interest on this Note is due and payable semi-annually (June 8,
2000 and December 8, 2000). The principal amount owing under this note is due
and payable on December 8, 2000.

         (b) Maker shall have the right to prepay this Note in full or in part
at any time, without premium or penalty. All prepayments shall be applied first
to accrued interest and then to principal.

Section 3. Rank.

         This Note shall rank be as a senior obligation of Maker and all other
obligations of Maker shall be subordinated to this Note, regardless of whether
such obligations are presently existing or are subsequently incurred.

Section 4. Default.

         It shall be an event of default ("Event of Default"), and the entire
unpaid principal of this Note, together with accrued interest, shall become
immediately due and payable, at the election of Payee, upon the occurrence of
any of the following events:

         (a) any failure on the part of Maker to make any payment under this
Note when due, whether by acceleration or otherwise, and the continuation of
such failure for a period of five (5) days after written notice thereof from
Payee.

         (b) any failure on the part of Maker to keep or perform any of the
terms or provisions (other than payment) of this Note or any amendment thereof,
which failure is not cured within ten (10) days and the continuation of such
failure for more than ten (10) days after written notice thereof from Payee.

         (c) Maker shall commence (or take any action for the purpose of
commencing) any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, moratorium or similar law or statute.

         (d) A proceeding shall be commenced against Maker under any bankruptcy,
reorganization, arrangement, readjustment of debt, moratorium or similar law or
statute and

                                        2

<PAGE>

relief is ordered against it, or the proceeding is controverted but is not
dismissed within sixty (60) days after the commencement thereof.

         (e) Maker consents to or suffers the appointment of a receiver, trustee
or custodian to any substantial part of its assets that is not vacated within
thirty (30) days.

         (f) Dissolution, termination of existence, or insolvency of Maker.

         (g) Maker consents to or suffers an attachment, garnishment, execution
or other legal process against any of its assets that is not released within
thirty (30) days.

Section 5. Jurisdiction and Service of Process.

         Maker irrevocably consents to the jurisdiction of the courts of the
State of New York and of any federal court located in such State in connection
with any action or proceeding arising out of or relating to this Note, any
document or instrument delivered pursuant to, in connection with, or
simultaneously with this Note, or a breach of this Note or any such document or
instrument. Maker waives, to the full extent permitted by law, any objection
which it may now or hereafter have to the laying of venue of any action or
proceeding arising out of or relating to this Note brought in the State of New
York, and further irrevocably waives, to the full extent permitted by law, any
claim that any such action or proceeding brought in such State has been brought
in an inconvenient forum. In any such action or proceeding, Maker waives, to the
full extent permitted by law, personal service of any summons, complaint, or
other process and agrees that service thereof may be made on Maker by certified
or registered U.S. mail or by personal delivery. Within thirty (30) days after
such service, or such other time as may be mutually agreed upon in writing by
the attorneys for the parties to such action or proceeding Maker shall appear or
answer such summons, complaint, or other process. Should Maker so served fail to
appear or answer within such thirty (30)-day period or such extended period, as
the case may be, Maker shall be deemed in default and judgment may be entered by
Payee against Maker for the amount as demanded in any summons, complaint, or
other process so served.

Section 6. Waivers.

         Maker waives demand, presentment, protest, notice of protest, notice of
dishonor, and all other notices or demands of any kind or nature with respect to
this Note.

         (a) Maker agrees that a waiver of rights under this Note shall not be
deemed to be made by Payee unless such waiver shall be in writing, duly signed
by Payee, and each such waiver, if any, shall apply only with respect to the
specific instance involved and shall in no way impair the rights of Payee or the
obligations of Maker in any other respect at any other time.

                                        3

<PAGE>

         (b) Maker agrees that in the event Payee demands or accepts partial
payment of this Note, such demand or acceptance shall not be deemed to
constitute a waiver of any right to demand the entire unpaid balance of this
Note at any time in accordance with the terms of this Note.

         (c) Maker agrees and acknowledges that Payee may disclose to any other
Obligor confidential information relating to this Note, and waives, to the full
extent permitted by law, any right to privacy or similar right under federal or
state laws which Maker may have with respect to such disclosures.

         (d) In any action or proceeding arising out of or relating to this
Note, Maker waives (to the full extent permitted by law) all right to a trial by
jury or to plead as a defense any statute of limitations or any other similar
law or equitable doctrine.

Section 7. Collection Costs.

         Maker will upon demand pay to Payee the amount of any and all
reasonable costs and expenses, including, without limitation, the reasonable
fees and disbursements of its counsel (whether or not suit is instituted) and of
any experts and agents, which Payee may incur in connection with the following:
(i) the enforcement of this Note; and (ii) the enforcement of payment of all
obligations of Maker by any action or participation in, or in connection with, a
case or proceeding under Chapters 7, 11, or 13 of the Bankruptcy Code, or any
successor statute thereto.

Section 8. Assignment of Note.

         Maker may not assign or transfer this Note or any of its obligations
under this Note in any manner whatsoever (including, without limitation, by the
consolidation or merger of Maker, if a corporation, with or into another
corporation) without the prior written consent of Payee. The Note may be
assigned at any time by Payee. Maker agrees not to assert against any assignee
of this Note any claim or defense which Maker may have against any assignor of
this Note.

Section 9. Miscellaneous.

         This Note may be altered only by prior written agreement signed by the
party against whom enforcement of any waiver, change, modification, or discharge
is sought. This Note may not be modified by an oral agreement, even if supported
by new consideration.

         (a) This Note shall be governed by, and construed in accordance with,
the laws of the State of New York, without giving effect to such state's
principles of conflict of laws.

                                        4

<PAGE>

         (b) Subject to Section 8, the covenants, terms, and conditions
contained in this Note apply to and bind the heirs, successors, executors,
administrators and assigns of the parties.

         (c) This Note and a warrant issued as of the dated hereof, constitutes
a final written expression of all the terms of the agreement between the parties
regarding the subject matter hereof, are a complete and exclusive statement of
those terms, and supersede all prior and contemporaneous agreements,
understandings, and representations between the parties. If any provision or any
word, term, clause, or other part of any provision of this Note shall be invalid
for any reason, the same shall be ineffective, but the remainder of this Note
shall not be affected and shall remain in full force and effect.

         (d) The singular includes the plural. If more than one Maker executes
this Note, the term "Maker" shall be deemed to refer to each of the undersigned
Makers as well as to all of them, and their obligations and agreements under
this Note shall be joint and several. If any of the undersigned is a married
person, recourse may be had against his or her separate property for all of his
or her obligations under this Note. The term "Obligor" shall be deemed to refer
to each Maker, endorser, guarantor, or surety of this Note as well as to all of
them. The term "Payee" shall include the initial party to whom payment is
designated to be made and, in the event of an assignment of this Note, the
successor assignee or assignees, and, as to each successive additional
assignment, such successor assignee or assignees.

         (e) All notices, consents, or other communications provided for in this
Note or otherwise required by law shall be in writing and may be given to or
made upon the respective parties at the following mailing addresses:

         Payee:
                -------------------------

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

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

         Maker:      Predict It Inc.
                     694 Eighth Avenue
                     New York, NY 10036
                     Attention: Andrew P. Merkatz, President

Such addresses may be changed by notice given as provided in this subsection.
Notices shall be effective upon the date of receipt; provided, however, that a
notice (other than a notice of a changed address) sent by certified or
registered U.S. mail, with postage prepaid, shall be presumed received not later
than three (3) business days following the date of sending.

                                        5

<PAGE>

         IN WITNESS WHEREOF, Maker has executed this Note effective as of the
date first set forth above.

                             MAKER: PREDICT IT INC.

                             ------------------------------------------------
                             Andrew P. Merkatz, President and
                             Chief Executive Officer

                                        6

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