Document:

EXHIBIT 4.2

THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAW OF ANY STATE OR
OTHER JURISDICTION, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
UNLESS (I) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY
APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION COVERING SUCH
SECURITIES, (II) THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT AND
ANY APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION, OR (III) THE
COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE ACT AND ANY APPLICABLE SECURITIES LAW OF ANY STATE
OR OTHER JURISDICTION.

                          SUTTER HOLDING COMPANY, INC.

                          COMMON STOCK PURCHASE WARRANT

No. [__]                                                      December ___, 2002

FOR VALUE RECEIVED, Sutter Holding Company,
         Inc., a Delaware corporation (the "Company"), hereby grants
to __________________ and its permitted successors and assigns (referred to
herein as the "holder" or "holder hereof") the right, subject to the terms and
conditions herein set forth, to purchase at any time prior to the termination of
this Warrant pursuant to Section 7 below, at a price equal to $11.00 per share,
subject to adjustment as provided herein (the "Warrant Price"), that number of
fully paid and nonassessable shares of the Common Stock of the Company
determined in accordance with Section 1 below (subject to adjustment as provided
herein, the "Warrant Shares"). This Warrant is nontransferable (except as
provided Section 6 below) and may only be exercised at one time for all Warrant
Shares and not in partial increments. Capitalized terms used in this Warrant,
but not otherwise defined herein, will have the respective meanings set forth in
that certain Stock Purchase Agreement dated as of the date hereof among the
Company, the holder hereof, RCH, LLC, Lawrence Anspach, and Diana Mead (as the
same may be amended, supplemented or otherwise modified from time to time, the
"Purchase Agreement"). This Warrant is one of the Warrants issued by the Company
pursuant to Section 2.1.1(d) of the Purchase Agreement (together, as the same
may be amended, supplemented or otherwise modified from time to time, the
"Warrants").

         1. Number of Warrant Shares. The number of Warrant Shares for which
this Warrant is exercisable is equal to _________________________, subject to
adjustment as provided herein.

         2. Adjustment of Warrant Price and Warrant Shares. The Warrant Shares
issuable upon the exercise of this Warrant and the Warrant Price will be subject
to adjustment from time

<PAGE>
to time as follows, and the Company agrees to give the holder of this Warrant 15
days advance notice of the effective date of the following:

              (a) Consolidation, Merger, Sale of Assets, etc. If at any time the
Company proposes to (i) consolidate with or merge into any other Person and will
not be the continuing or surviving Person of such consolidation or merger, or
(ii) permit any other Person to consolidate with or merge into the Company and
the Company will be the continuing or surviving Person but, in connection with
such consolidation or merger, the Warrant Shares will be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (iii) sell or otherwise transfer all or substantially all of its
properties or assets to any other Person, or (iv) effect a capital
reorganization or reclassification of any Warrant Shares or other capital stock
of the Company (other than a capital reorganization or reclassification to the
extent that such capital reorganization or reclassification results in an
adjustment in the Warrant Shares and/or the Warrant Price as provided in Section
2(b) or 2(c) hereof), then, and in the case of each such transaction, the
Company will make and/or arrange to be made proper provision so that, upon the
basis and the terms and in the manner provided in this Warrant, the holder of
this Warrant, upon the exercise hereof at any time after the consummation of
such transaction, will be entitled to receive (at the aggregate Warrant Price in
effect at the time of such consummation for all Warrant Shares issuable upon
such exercise immediately prior to such consummation), in lieu of the Warrant
Shares issuable upon such exercise prior to such consummation, the greatest
amount of securities, cash or other property to which such holder would actually
have been entitled as a member upon such consummation if such holder had
exercised the rights represented by this Warrant immediately prior thereto,
subject to adjustments (subsequent to such consummation) as nearly equivalent as
possible to the adjustments provided for in Section 2(b) or 2(c) hereof, and, to
the extent this Warrant has not been exercised by the effective date of such
transaction, this Warrant will, at the holder's option, (i) terminate or (ii) be
exchanged for a warrant for the number of shares provided in the following
sentence. The foregoing notwithstanding, a merger or consolidation of the
Company with or into another corporation after which the shareholder(s) of the
Company holding more than 50% of the voting power of the Company immediately
prior to such transaction hold more than 50% of the voting power of the
surviving entity, will not result in termination of this Warrant; instead this
Warrant will be exchanged for a warrant of the surviving corporation that will
entitle the holder hereof to acquire upon the exercise thereof the number of
shares of stock or other property to which the holder of the number of shares of
the Warrant Shares which are subject to this Warrant on the effective date of
the merger would have been entitled to receive for such securities under the
terms of the merger.

              (b) Reclassification, etc. If the Company at any time will, by
subdivision, combination or reclassification of securities or otherwise, change
any of the securities to which purchase rights under this Warrant exist into the
same or a different number of securities of any class or classes, this Warrant
will thereafter be to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities which
were subject to the purchase rights under this Warrant immediately prior to such
subdivision, combination, reclassification, or other change. If shares of the
class of the Company's stock for which this Warrant is being exercised are
subdivided or combined into a greater or smaller number of shares of stock, the
Warrant Price will be proportionately reduced in the case of subdivision of
shares or proportionately increased in the case of combination of shares, in
both cases by the ratio which the total number of shares of such class of stock
to be outstanding

<PAGE>
immediately after such event bears to the total number of shares of such class
of stock outstanding immediately prior to such event.

              (c) Adjustment for Dividends in Stock or other Securities or
Property. In case at any time or from time to time on, whether before or after
the date hereof, the holders of the shares of the Company's capital stock of the
same class and series as the Warrant Shares (or any shares of stock or other
securities or property at the time receivable upon the exercise of this Warrant)
will have received, or, on or after the record date fixed for the determination
of eligible shareholders, will have become entitled to receive, without payment
therefor, other or additional stock or other securities or property of the
Company by way of dividend or distribution, then and in each case, the holder of
this Warrant will, upon the exercise hereof, be entitled to receive, in addition
to the number of shares of Warrant Shares receivable thereupon, and without
payment of any additional consideration therefor, the amount of such other or
additional stock or securities in or property of the Company which such holder
would hold on the date of such exercise had it been the holder of record of such
Warrant Shares on the date hereof and had thereafter, during the period from the
date hereof to and including the date of such exercise, retained such shares
and/or all other additional stock or other securities or property receivable by
it as aforesaid during such period, giving effect to all adjustments called for
during such period by this Section 2, and all such additional stock or other
securities or property will thenceforth constitute part of the Warrant Shares.

              (d) No Impairment. The Company will not, by amendment of its
certificate of incorporation or other organizational documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 2 and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant against impairment.

         3. No Shareholder Rights. Subject to Sections 2 and 5 of this Warrant,
this Warrant, by itself, as distinguished from any shares purchased hereunder,
will not entitle its holder to any of the rights of a shareholder of the
Company. Nothing contained in this Warrant will be construed as imposing any
obligation on its holder to purchase any securities or as imposing any
liabilities on such holder as a shareholder of the Company, whether such
obligation or liabilities are asserted by the Company or by creditors of the
Company.

         4. Exercise of Warrant. This Warrant may be exercised in whole or in
part by the holder, at any time after the date hereof and prior to the
termination of this Warrant, by the surrender of this Warrant, together with the
Notice of Exercise attached hereto as Attachment 1, duly completed and executed
at the principal office of the Company, accompanied by payment in full of the
Warrant Price in cash or by check with respect to the shares of Warrant Shares
being purchased. This Warrant will be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the person entitled to receive the shares of Warrant Shares
issuable upon such exercises will be treated for all purposes as holder of such
shares of record as of the close of business on such date. As promptly as
practicable (and in any event within seven (7) calendar days) after such date,
the Company, at its sole expense (including the payment by it of any applicable
issue taxes), will issue and deliver to

<PAGE>
the person or persons entitled to receive the same a certificate or certificates
for the number of full shares of Warrant Shares issuable upon such exercise. No
fractional shares or scrip representing fractional shares will be issued upon
the exercise of this Warrant. In lieu of any fractional share to which the
holder would otherwise be entitled, the Company will make a cash payment equal
to the fair market value of one share of the Company's common stock (and/or
other securities and/or property corresponding to Warrant Shares) multiplied by
such fraction. In the event that this Warrant is exercised in part but not in
whole, the Company will issue the holder a replacement warrant on substantially
the same terms representing the portion of this Warrant not exercised.

         5. Certificate of Adjustment. Whenever the Warrant Price or number or
type of Warrant Shares is adjusted, as herein provided, the Company will
promptly (and no less than seven (7) calendar days thereafter) deliver to the
record holder of this Warrant a certificate of an executive officer of the
Company setting forth in reasonable detail the reason for and nature of such
adjustment, the method of calculation, and other facts upon which such
adjustment is based, and the Warrant Price and Warrant Shares before and after
such adjustment. In addition, upon the written request at any time of the
holder, the Company will furnish to such holder a report setting forth the then
current number of Warrant Shares and the then current Warrant Price and showing
in reasonable detail how same were calculated.

         6. Transfer of Warrant. This Warrant may not be transferred or assigned
by the holder hereof in whole or in part, except that the holder may assign or
transfer this Warrant to (i) any affiliate of the holder, or (ii) if the holder
is an individual or trust, to his or her spouse, children, grandchildren,
parents, grandparents, siblings or other lineal descendants, or a trust,
partnership or other entity for the exclusive benefit of the foregoing, or his
or her heirs, legates, executors, or other legal representatives. This Warrant
will bind the Company and Company's successors and assigns (to the extent
permitted under this Warrant) and will inure to the benefit of the holder
including its permitted successors and assigns. The Company will not, without
the prior written consent of the holder, assign any of its rights or obligations
under this Warrant.

         7. Termination. This Warrant will terminate at 5:00 p.m., Eastern
standard time, on the fifth anniversary of the date hereof.

         8. Registration. The Company shall notify the holder of this Warrant in
writing at least five (5) days prior to filing any registration statement on
Form S-8 under the Securities Act of 1933, as amended, for purposes of effecting
a the registration of securities of the Company and will afford the holder an
opportunity to include in such registration statement all or any part of the
Warrant Shares; provided, that, at such time, the Warrant Shares are eligible
for registration on a Form S-8 registration statement.

         9. Miscellaneous. This Warrant will be governed by the laws of the
State of Delaware, as such laws are applied to contracts to be entered into and
performed entirely in Delaware by Delaware residents. The headings in this
Warrant are for purposes of convenience and reference only, and will not be
deemed to constitute a part hereof. Neither this Warrant nor any term hereof may
be changed or waived orally, but only by an instrument in writing signed by the
Company and the holder of this Warrant. All notices and other communications
from the Company to the holder of this Warrant will be delivered personally or
mailed by overnight

<PAGE>
courier or first class mail, postage prepaid, to the address furnished to the
Company in writing by the last holder of this Warrant who will have furnished an
address to the Company in writing, and if mailed will be deemed given three days
after deposit in the United States mail.

         10. Reservation of Shares, etc. The Company will at all times reserve
and keep available, solely for issuance and delivery upon exercise of this
Warrant and the other Warrants, the number of Warrant Shares from time to time
issuable upon exercise of this Warrant and all other Warrants at the time
outstanding. All Warrant Shares issuable upon exercise of this or any other
Warrants will be duly authorized and, when issued upon such exercise, will be
validly issued and fully paid and nonassessable with no liability on the part of
the holders thereof.

         11. Replacement of Warrant. If this Warrant becomes mutilated and is
surrendered by the holder with respect thereto to the Company, or if holder
claims that this Warrant has been lost, destroyed or wrongfully taken, the
Company will execute and deliver to such holder a replacement Warrant, in like
tenor, upon the affidavit attesting to such loss, destruction or wrongful taking
with respect to this Warrant and upon the provision of customary indemnification
of the Company by the holder. Such lost, destroyed, mutilated, surrendered or
wrongfully taken Warrant will be deemed to be replaced for all purposes hereof.

         ISSUED:  December ___, 2002

                                                SUTTER HOLDING COMPANY, INC.

                                        By:  ________________________________
                                        Name:    William G. Knuff, III
                                        Title:   Chief Executive Officer
<PAGE>
                                  Attachment 1

                               NOTICE OF EXERCISE

TO:      SUTTER HOLDING COMPANY, INC.

         1. The undersigned hereby elects to purchase _____________________
shares of Common Stock of Sutter Holding Company, Inc., pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price in
full, together with all applicable transfer taxes, if any.

         2. Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:

         (Name)

         (Address)

-------------------------------------      -------------------------------------
(Date)                                     (Name of Warrant Holder)

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

                                     Title:
                                           -------------------------------------
                                             Name:
                                                   -----------------------------
                                             Title:
                                                    ----------------------------STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
                                     SELLER

                         BANK ONE, NATIONAL ASSOCIATION,
                                     TRUSTEE

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

                                       and

                            EMC MORTGAGE CORPORATION

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

                         POOLING AND SERVICING AGREEMENT

                          Dated as of December 1, 2002

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

                   Structured Asset Mortgage Investments Inc.
       Bear Stearns ARM Trust 2002-12, Mortgage Pass-Through Certificates

                                 Series 2002-12

<PAGE>

<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

                                                     ARTICLE I

                                                    Definitions

                                                    ARTICLE II

                                           Conveyance of Mortgage Loans;
                                         Original Issuance of Certificates
<S>                        <C>                                                                                <C>
         Section 2.01      Conveyance of Mortgage Loans to Trustee.............................................34
         Section 2.02      Acceptance of Mortgage Loans by Trustee.............................................35
         Section 2.03      Assignment of Interest in the Mortgage Loan Purchase Agreement......................38
         Section 2.04      Substitution of Mortgage Loans......................................................39
         Section 2.05      Issuance of Certificates............................................................40
         Section 2.06      Representations and Warranties Concerning the Seller................................40

                                                    ARTICLE III

                                  Administration and Servicing of Mortgage Loans
         Section 3.01      Master Servicer.....................................................................42
         Section 3.02      REMIC-Related Covenants.............................................................43
         Section 3.03      Monitoring of Servicers.............................................................43
         Section 3.04      Fidelity Bond.......................................................................44
         Section 3.05      Power to Act; Procedures............................................................44
         Section 3.06      Due-on-Sale Clauses; Assumption Agreements..........................................45
         Section 3.07      Release of Mortgage Files...........................................................45
         Section 3.08      Documents, Records and Funds in Possession of Master Servicer To Be Held for
Trustee........................................................................................................46
         Section 3.09      Standard Hazard Insurance and Flood Insurance Policies..............................47
         Section 3.10      Presentment of Claims and Collection of Proceeds....................................47
         Section 3.11      Maintenance of the Primary Mortgage Insurance Policies..............................47
         Section 3.12      Trustee to Retain Possession of Certain Insurance Policies and Documents............48
         Section 3.13      Realization Upon Defaulted Mortgage Loans...........................................48
         Section 3.14      Compensation for the Master Servicer................................................48
         section 3.15      REO Property........................................................................49
         section 3.16      Annual Officer's Certificate as to Compliance.......................................49
         section 3.17      Annual Independent Accountant's Servicing Report....................................50
         section 3.18      Reports Filed with Securities and Exchange Commission...............................50
         section 3.19      EMC.................................................................................52
         section 3.20      UCC.................................................................................52
         section 3.21      Optional Purchase of Defaulted Mortgage Loans.......................................52

                                                        -i-

<PAGE>

                                                    ARTICLE IV

                                                     Accounts
         Section 4.01      Protected Accounts..................................................................53
         Master Servicer Collection Account....................................................................54
         Permitted Withdrawals and Transfers from the Master Servicer Collection  Account......................55
         Distribution Account..................................................................................56
         Permitted Withdrawals and Transfers from the Distribution Account.....................................57

                                                     ARTICLE V

                                                   Certificates
         Section 5.01      Certificates........................................................................59
         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 Losses................................................................80
         Section 6.03      Payments............................................................................82
         Section 6.04      Statements to Certificateholders....................................................83
         Section 6.05      Monthly Advances....................................................................85
         Section 6.06      Compensating Interest Payments......................................................86

                                                    ARTICLE VII

                                                The Master Servicer
         Section 7.01      Liabilities of the Master Servicer..................................................87
         Section 7.02      Merger or Consolidation of the Master Servicer......................................87
         Section 7.03      Indemnification of the Trustee, the Master Servicer and the Securities Administrator
................................................................................................................87
         Section 7.04      Limitations on Liability of the Master Servicer and Others..........................88
         Section 7.05      Master Servicer Not to Resign.......................................................89
         Section 7.06      Successor Master Servicer...........................................................89
         Section 7.07      Sale and Assignment of Master Servicing.............................................89

                                                   ARTICLE VIII

                                                      Default

                                                       -ii-

<PAGE>

         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..........................................................94

                                                    ARTICLE IX

                                                  Indemnification
         Section 9.01      Indemnification of the Trustee and the Securities Administrator.....................95

                                                     ARTICLE X

                              Concerning the Trustee and the Securities Administrator
         Section 10.01     Duties of Trustee...................................................................96
         Section 10.02     Certain Matters Affecting the Trustee and the Securities Administrator..............98
         Section 10.03     Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans
...............................................................................................................100
         Section 10.04     Trustee and Securities Administrator May Own Certificates..........................100
         Section 10.05     Trustee's and Securities Administrator's Fees and Expenses.........................100
         Section 10.06     Eligibility Requirements for Trustee and Securities Administrator..................101
         Section 10.07     Insurance..........................................................................101
         Section 10.08     Resignation and Removal of the Trustee and Securities Administrator................101
         Section 10.09     Successor Trustee and Successor Securities Administrator...........................102
         Section 10.10     Merger or Consolidation of Trustee or Securities Administrator.....................103
         Section 10.11     Appointment of Co-Trustee or Separate Trustee......................................103
         Section 10.12     Federal Information Returns and Reports to Certificateholders; REMIC
Administration................................................................................................104

                                                    ARTICLE XI

                                                    Termination
         Section 11.01     Termination Upon Repurchase by the Seller or its Designee or Liquidation of the
Mortgage Loans................................................................................................107
         Section 11.02     Additional Termination Requirements................................................109

                                                    ARTICLE XII

                                           Mandatory Auction Provisions
         Section 12.01     The Market Value Swap..............................................................111
         Section 12.02     Rights of the Auction Administrator................................................111
         Section 12.03     Removal of the Auction Administrator...............................................111
         Section 12.04     Duties of the Trustee with respect to the Mandatory Auction........................111
         Section 12.05     Mandatory Auction Certificates.....................................................112

                                                       -iii-

<PAGE>

                                                   ARTICLE XIII

                                             Miscellaneous Provisions
         Section 13.01     Intent of Parties..................................................................-113-
         Section 13.02     Amendment..........................................................................-113-
         Section 13.03     Recordation of Agreement...........................................................-114-
         Section 13.04     Limitation on Rights of Certificateholders.........................................-114-
         Section 13.05     Acts of Certificateholders.........................................................-115-
         Section 13.06     Governing Law......................................................................-116-
         Section 13.07     Notices............................................................................-116-
         Section 13.08     Severability of Provisions.........................................................-117-
         Section 13.09     Successors and Assigns.............................................................-117-
         Section 13.10     Article and Section Headings.......................................................-117-
         Section 13.11     Counterparts.......................................................................-117-
         Section 13.12     Notice to Rating Agencies..........................................................-117-

</TABLE>

                                                       -iv-

<PAGE>

                                    EXHIBITS

Exhibit A-1          -    Form of Class [__-A-__] and [__X-__] Certificates
Exhibit A-2          -    Form of Class B Certificates
Exhibit A-3          -    Form of Class R Certificates
Exhibit B            -    Mortgage Loan Schedule
Exhibit C            -    [Reserved]
Exhibit D            -    Request for Release of Documents
Exhibit E            -    Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1          -    Form of Investment Letter
Exhibit F-2          -    Form of Rule 144A and Related Matters Certificate
Exhibit G            -    Form of Custodial Agreement
Exhibit H-1 to H-2   -    Servicing Agreements
Exhibit I            -    Assignment Agreements
Exhibit J            -    Mortgage Loan Purchase Agreement
Exhibit K            -    Market Value Swap
Exhibit L            -    Swap Guarantee

                                       -v-

<PAGE>

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

         Pooling and Servicing Agreement dated as of December 1, 2002, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as seller
(the "Seller"), Bank One, National Association, a national banking association,
not in its individual capacity but solely as trustee (the "Trustee"), Bank One,
National Association, as auction administrator ("the "Auction Administrator"),
Wells Fargo Bank Minnesota, National Association, as master servicer (in such
capacity, the "Master Servicer"), Wells Fargo Bank Minnesota, National
Association, as securities administrator (in such capacity, the "Securities
Administrator") and EMC Mortgage Corporation ("EMC").

                              PRELIMINARY STATEMENT

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

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

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

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

         The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of approximately $1,346,558,186. The initial principal amount of
the Certificates will not exceed such Outstanding Principal Balance.

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

<PAGE>

                                    ARTICLE I

                                   Definitions

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

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

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

         ACCRUED CERTIFICATE INTEREST: For any Certificate (other than the Class
I-X-2 Certificates) for any Distribution Date, the interest accrued during the
related Interest Accrual Period at the applicable Pass-Through Rate on the
Current Principal Amount, or Notional Amount, as applicable, of such Certificate
immediately prior to such Distribution Date, and, in the case of each Component
of the Class I-X-2 Certificates, for any Distribution Date, interest accrued
during the related Interest Accrual Period at the applicable Pass-Through Rate
on the Notional Amount of such Component immediately prior to such Distribution
Date, less (i) in the case of a Senior Certificate (or a Component of the Class
I-X-2 Certificates), such Certificate's or Component's share of any Net Interest
Shortfall from the related Mortgage Loan and, after the related Cross-Over Date,
the interest portion of any Realized Losses on the Mortgage Loans allocated
thereto in accordance with Section 6.02(g), (ii) in the case of a Senior
Mezzanine Certificate, such Certificate's share of any Net Interest Shortfall
and the interest portion of any Realized Losses on the Mortgage Loans allocated
thereto in accordance with Section 6.02(g) and (iii) in the case of a
Subordinate Certificate, such Certificate's share of any Net Interest Shortfall
and the interest portion of any Realized Losses on the Mortgage Loans allocated
thereto in accordance with Section 6.02(g). Interest on the Certificates and the
Components of the Class I-X-2 Certificates shall be calculated on the basis of a
360-day year consisting of twelve 30-day months.

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

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

                                       -2-

<PAGE>

         ALLOCABLE SHARE:

         With respect to each Class of Group 1 Subordinate Certificates:

         (a) as to any Distribution Date and amounts distributable pursuant to
clauses (i) and (iii) of the definition of Subordinate Optimal Principal Amount
for the Group 1 Mortgage Loans, 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 Subordinate Optimal Principal
Amount for the Group 1 Mortgage Loans, 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 Senior Mezzanine Certificates and Group 2
Subordinate Certificates:

         (a) as to any Distribution Date and amounts distributable pursuant to
clauses (i) and (iv) of the definition of Senior Mezzanine and Subordinate
Optimal Principal Amount for the Group 2 Mortgage Loans, 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 Senior Mezzanine Certificates and Group 2 Subordinate
Certificates; and

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

                           (1) for any Distribution Date on which the Group 2
                           Senior Mezzanine Loss and Delinquency Test has been
                           satisfied, as to each Class of Senior Mezzanine
                           Certificate and 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

                                       -3-

<PAGE>

                           Trigger has been satisfied on such Distribution Date,
                           the fraction, expressed as a percentage, the
                           numerator of which is the Current Principal Amount of
                           such Class and the denominator of which is the
                           aggregate Current Principal Amount of all such
                           Classes of Senior Mezzanine Certificates and Group 2
                           Subordinate Certificates for which the related Class
                           Prepayment Distribution Trigger has been satisfied
                           and (y) the related Class Prepayment Distribution
                           Trigger has not been satisfied on such Distribution
                           Date, 0%; provided that if on a Distribution Date,
                           the Current Principal Amount of any Class of Senior
                           Mezzanine Certificates or 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)(1), to the
                           extent of such Class's remaining Allocable Share,
                           shall be distributed to the Senior Mezzanine
                           Certificates, or if the Current Principal Amount of
                           the Senior Mezzanine Certificates has been reduced to
                           zero, the Class of Group 2 Subordinate Certificates
                           having the lowest numerical designation and to the
                           Group 2 Subordinate Certificates which satisfy the
                           related Class Prepayment Distribution Trigger in
                           reduction of their respective Current Principal
                           Amounts, for to the Senior Mezzanine Certificates and
                           then to the Group 2 Subordinate Certificates in the
                           order of their numerical Class designations; and

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

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

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

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

                                       -4-

<PAGE>

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

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

         AUCTION ADMINISTRATOR: Bank One, National Association, in its
individual capacity and not as trustee, or its successor in interest, or any
successor auction administrator appointed as herein provided.

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

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

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

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

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

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

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

         CERTIFICATE GROUP: The Group 1 Senior Certificates and Group 2 Senior
Certificates as applicable.

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

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.

         CERTIFICATEHOLDER: A Holder of a Certificate.

                                       -5-

<PAGE>

         CLASS: With respect to the Certificates, I-A-1, I-A-2, I-A-3, I-A-4,
I-A-5, I-A-6, I-A-7, I-X-1, I-X-2, II-A-1, II-A-2, R-I, R-II, R-III, II-M-1,
I-B-1, I-B-2, I-B-3, I-B-4, I-B-5, I-B-6, II-B-1, II-B-2, II-B-3, II-B-4, II-B-5
and II-B-6.

         CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Senior Mezzanine
Certificates, Group 1 Subordinate Certificates or 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 Senior Mezzanine Certificates, Group 1 Subordinate Certificates or Group 2
Subordinate Certificates, respectively, subordinate thereto, if any, and the
denominator of which is the Scheduled Principal Balance of all of the Group 1
Mortgage Loans or Group 2 Mortgage Loans, respectively, as of the related Due
Date, equals or exceeds such percentage calculated as of the Closing Date.

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

         CLOSING DATE: December 30, 2002.

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

         COMPENSATING INTEREST PAYMENT: As defined in Section 6.06.

         COMPONENT: With respect to the Class I-X-2 Certificates, the following
components: Component I-X-2-1, Component I-X-2-2, Component I-X-2-3, Component
I-X-2-4, Component I-X- 2-5 and Component I-X-2-6.

         CORPORATE TRUST OFFICE: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at 1 Bank One Plaza,
Mail Suite IL1-0126, Chicago, Illinois 60670, Attention: Global Corporate Trust
Services.

         CORRESPONDING CERTIFICATE: With respect to the REMIC I Regular
Interests and the REMIC II Regular Interests, the REMIC III Certificates
designated in the table below:

     REMIC I or            REMIC III
      REMIC II            Certificate
      Interest
      LTI-IA1                I-A-1
      LTI-IA2                I-A-2
      LTI-IA3                I-A-3
      LTI-IA4                I-A-4
      LTI-IA5                I-A-5
      LTI-IA6                I-A-6
      LTI-IA7                I-A-7
      LTI-IB1                I-B-1
      LTI-IB2                I-B-2

                                       -6-

<PAGE>

      LTI-IB3                I-B-3
      LTI-IB4                I-B-4
      LTI-IB5                I-B-5
      LTI-IB6                I-B-6
     LTII-IIA1               II-A-1
     LTII-IIA2               II-A-2
     LTII-IIA3               II-A-3
     LTII-IIB1               II-B-1
     LTII-IIB2               II-B-2
     LTII-IIB3               II-B-3
     LTII-IIB4               II-B-4
     LTII-IIB5               II-B-5
     LTII-IIB6               II-B-6
     LTII-RIII               R-III

         CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other than
an Interest Only Certificate) as of any Distribution Date, the initial principal
amount of such Certificate, and reduced by (i) all amounts distributed on
previous Distribution Dates on such Certificate with respect to principal, (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Certificate, taking account of the Loss Allocation
Limitation (iii) in the case of a Senior Mezzanine Certificate, such
Certificate's pro rata share, if any, of the Senior Mezzanine Certificate
Writedown Amount for previous Distribution Dates and (iv) in the case of a
Subordinate Certificate, such Certificate's pro rata share, if any, of the
applicable Subordinate Certificate Writedown Amount for previous Distribution
Dates. With respect to any Class of Certificates (other than the Interest Only
Certificates), the Current Principal Amount thereof will equal the sum of the
Current Principal Amounts of all Certificates in such Class. Notwithstanding the
foregoing, solely for purposes of giving consents, directions, waivers,
approvals, requests and notices, the Class R-I, Class R-II and Class R-III
Certificates after the Distribution Date on which they each receive the
distribution of the last dollar of their respective original principal amount
shall be deemed to have Current Principal Amounts equal to their respective
Current Principal Amounts on the day immediately preceding such Distribution
Date.

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

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

         CUT-OFF DATE: December 1, 2002.

         CUT-OFF DATE BALANCE: $1,346,558,186.

         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.

                                       -7-

<PAGE>

         DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.

         DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.

         DEPOSITORY AGREEMENT: The meaning specified in Subsection 5.01(a)
hereof.

         DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.

         DESIGNATED DEPOSITORY INSTITUTION: A depository institution (commercial
bank, federal savings bank mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.

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

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

         DISTRIBUTION ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.04, which shall be denominated "Bank One,
National Association, as Trustee f/b/o holders of Structured Asset Mortgage
Investments Inc., Bear Stearns ARM Trust 2002-12, Mortgage Pass- Through
Certificates, Series 2002-12 - Distribution Account," and which shall be an
Eligible Account.

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

                                       -8-

<PAGE>

         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 Senior Certificates or Group 2
Senior Certificates, as applicable, for such date pursuant to Section 6.02(e).

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

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

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

         ELIGIBLE ACCOUNT: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1 or better by Standard & Poor's and P-1 by Moody's at the
time of any deposit therein or (B) insured by the FDIC (to the limits
established by such Corporation), the uninsured deposits in which account are
otherwise secured such that, as evidenced by an Opinion of Counsel (obtained by
the Person requesting that the account be held pursuant to this clause (ii))
delivered to the Trustee prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
Distribution Account) securing such funds that is superior to claims of any
other depositors or general creditors of the depository institution with which
such account is maintained, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by
the Rating Agencies). Eligible Accounts may bear interest.

         EMC: EMC Mortgage Corporation.

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

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

                                       -9-

<PAGE>

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

         FDIC: Federal Deposit Insurance Corporation or any successor thereto.

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

         FITCH: Fitch Ratings and its successors in interest.

         FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the Current Principal Amount of such
Class. With respect to the Certificates in the aggregate, the fractional
undivided interest evidenced by (i) a Residual Certificate will be deemed to
equal 0.25% multiplied by the percentage interest of such Residual Certificate,
(ii) an Interest Only Certificate will be deemed to equal 1.0% multiplied by a
fraction, the numerator of which is the Notional Amount of such Certificate and
the denominator of which is the aggregate Notional Amount of such respective
Class and (iii) a Certificate of any other Class will be deemed to equal 97.25%
multiplied by a fraction, the numerator of which is the Current Principal Amount
of such Certificate and the denominator of which is the aggregate Current
Principal Amount of all the Certificates.

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

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

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

         GROUP 1 AVAILABLE FUNDS OR GROUP 2 AVAILABLE FUNDS: With respect to any
Distribution Date, an amount equal to the aggregate of the following amounts
with respect to the Mortgage Loans in the related Loan Group: (a) all previously
undistributed payments on account of principal (including the principal portion
of Scheduled Payments, Principal Prepayments and the principal portion of Net
Liquidation Proceeds) and all previously undistributed payments on account of
interest received after the Cut-off Date and on or prior to the related
Determination Date, (b) any Monthly Advances and Compensating Interest Payments
by the Master Servicer or the Servicers with respect to such Distribution Date,
(c) any other miscellaneous amounts remitted by the Servicers pursuant to the
related Servicing Agreements, and (d) any reimbursed amount in connection with
losses on investments of deposits in an account, except:

                                      -10-

<PAGE>

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

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

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

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

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

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

               (vii) to pay the Servicing Fee or to reimburse the Master
          Servicer, the Servicers, the Trustee, the Custodian or the Securities
          Administrator, as applicable, for such amounts as are due under the
          applicable Servicing Agreement, the Custodial Agreement and the
          Agreement and have not been retained by or paid to the Master
          Servicer, the Servicers, the Custodian, the Trustee or the Securities
          Administrator; and

               (viii) and any expenses, or other amounts reimbursable to, the
          Trustee or the Securities Administrator pursuant to Section 10.05.

         In addition, on each Distribution Date, the Group 1 or Group 2
Available Funds shall be increased or decreased, as applicable, by any Diverted
Amount allocated thereto pursuant to Section 6.02(e).

         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 (after 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 Senior Mezzanine Certificates and
Group 2 Subordinate Certificates has been reduced to zero (after giving effect
to all distributions on such Distribution Date).

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

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

                                      -11-

<PAGE>

         GROUP 1 ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The aggregate Current
Principal Amount of the Group 1 Subordinate Certificates as of the Cut-off Date.

         GROUP 1 OPTIONAL TERMINATION DATE: The Distribution Date on which the
aggregate Scheduled Principal Balance of the Group 1 Mortgage Loans is less than
10% of the aggregate Scheduled Principal Balance as of the Cut-off Date of the
Group 1 Mortgage Loans.

         GROUP 2 OPTIONAL TERMINATION DATE: The Distribution Date on which the
aggregate Scheduled Principal Balance of the Group 2 Mortgage Loans is less than
10% of the aggregate Scheduled Principal Balance as of the Cut-off Date of the
Group 2 Mortgage Loans.

         GROUP 1 SENIOR CERTIFICATES: The Class I-A-1, Class I-A-2, Class I-A-3,
Class, I-A-4, Class I-A-5, Class I-A-6, Class I-A-7, Class I-X-1 and Class
I-X-2.

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

         Group 2 Senior Mezzanine Loss and Delinquency Test: On any Distribution
Date, the Group I Senior Mezzanine Loss and Delinquency Test is satisfied if, as
of the last day of the month preceding such Distribution Date, (A) the aggregate
Scheduled Principal Balance of the 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 Current Principal Amount of the Senior Mezzanine and Group 2
Subordinate Certificates does not exceed 100%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Senior Mezzanine and
Group 2 Original Subordinate Principal Balance if such Distribution Date occurs
between and including January 2010 and December 2010, (b) 35% of the Senior
Mezzanine and Group 2 Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2011 and December 2011,
(c) 40% of the Senior Mezzanine and Group 2 Original Subordinate Principal
Balance if such Distribution Date occurs between and including January 2012 and
December 2012, (d) 45% of the Senior Mezzanine and Group 2 Original Subordinate
Principal Balance if such Distribution Date occurs between and including January
2013 and December 2013, and (e) 50% of the Senior Mezzanine and Group 2 Original
Subordinate Principal Balance if such Distribution Date occurs during or after
January 2014.

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

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

                                      -12-

<PAGE>

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

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

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

               (v) any Diverted Amount allocated to the Group 1 or Group 2
          Senior Optimal Principal Amount, as applicable;

         MINUS

               (vi) any Diverted Amount from the Group 1 or Group 2 Senior
          Optimal Principal Amount, as applicable, for such Distribution Date.

         GROUP 1 SENIOR PERCENTAGE: Initially, 97.30%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group 1
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 1 Mortgage Loans as of the
beginning of the related Due Period.

         GROUP 2 SENIOR PERCENTAGE: Initially, 95.00%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group 2
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 2 Mortgage Loans as of the
beginning of the related Due Period.

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

                                      -13-

<PAGE>

<TABLE>
<CAPTION>

<S>                                                   <C>
January 25, 2003 - December 25, 2007                  100%
January 25, 2008 - December 25, 2008                  Group 1 Senior Percentage plus 70% of the Group
                                                      1 Subordinate Percentage
January 25, 2009 - December 25, 2009                  Group 1 Senior Percentage plus 60% of the Group
                                                      1 Subordinate Percentage
January 25, 2010 - December 25, 2010                  Group 1 Senior Percentage plus 40% of the Group
                                                      1 Subordinate Percentage
January 25, 2011 - December 25, 2011                  Group 1 Senior Percentage plus 20% of the Group
                                                      1 Subordinate Percentage
January 25, 2012 and thereafter                       Group 1 Senior Percentage
</TABLE>

         In addition, no reduction of the Group 1 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (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 Mortgage Loans with respect
to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Group 1 Subordinate Certificates does not exceed 50% 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 January 2008 and December 2008, (b) 35% of the
Group 1 Original Subordinate Principal Balance if such Distribution Date occurs
between and including January 2009 and December 2009, (c) 40% of the Group 1
Original Subordinate Principal Balance if such Distribution Date occurs between
and including January 2010 and December 2010, (d) 45% of the Group 1 Original
Subordinate Principal Balance if such Distribution Date occurs between and
including January 2011 and December 2011, and (e) 50% of the Group 1 Original
Subordinate Principal Balance if such Distribution Date occurs during or after
January 2012.

         In addition, if the current Group 1 Subordinate Percentage is equal to
or greater than two times the initial Group 1 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 aggregate Current Principal
Amount of the Group 1 Subordinate Certificates does not exceed 50% and (b)(i)
prior to the Distribution Date in January 2006, cumulative Realized Losses on
the Group 1 Mortgage Loans do not exceed 20% of the Group 1 Original Subordinate
Principal Balance and (ii) on or after the Distribution Date in January 2006,
cumulative Realized Losses on the Group 1 Mortgage Loans do not exceed 30% of
the Group 1 Original Subordinate Principal Balance, then, in each case, the
Group 1 Senior Prepayment Percentage for such Distribution Date will equal the
Group 1 Senior Percentage; provided, however, if the current Group 1 Subordinate
Percentage for the Group 1 Certificates is equal to or greater than two times
the initial Group I Subordinate Percentage for the Group 1 Certificates prior to
January 25, 2006 and the above delinquency and loss tests are met, then the
Group 1 Senior Prepayment Percentage for such Distribution Date will equal the
Group 1 Senior Percentage plus 50% of the Group 1 Subordinate Percentage.

                                      -14-

<PAGE>

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

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

<TABLE>
<CAPTION>

Period (dates inclusive)                      Group 2 Senior Prepayment Percentage
--------------------------------------------- ---------------------------------------------
<S>                                           <C>
January 25, 2003 - December 25, 2009          100%
January 25, 2010 - December 25, 2010          Group 2 Senior Percentage plus 70% of the
                                              Senior Mezzanine and Subordinate Percentage
January 25, 2011 - December 25, 2011          Group 2 Senior Percentage plus 60% of the
                                              Senior Mezzanine and Subordinate Percentage
January 25, 2012 - December 25, 2012          Group 2 Senior Percentage plus 40% of the
                                              Senior Mezzanine and Subordinate Percentage
January 25, 2013 - December 25, 2013          Group 2 Senior Percentage plus 20% of the
                                              Senior Mezzanine and Subordinate Percentage
January 25, 2014 and thereafter               Group 2 Senior Percentage
</TABLE>

         In addition, no reduction of the Group 2 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (i) 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 aggregate Current
Principal Amount of the Senior Mezzanine Certificates and Group 2 Subordinate
Certificates does not exceed 50% and (ii) cumulative Realized Losses on the
Group 2 Mortgage Loans do not exceed (a) 30% of the Senior Mezzanine and Group 2
Original Subordinate Principal Balance if such Distribution Date occurs between
and including January 2010 and December 2010, (b) 35% of the Senior Mezzanine
and Group 2 Original Subordinate Principal Balance if such Distribution Date
occurs between and including January 2011 and December 2011, (c) 40% of the
Senior Mezzanine and Group 2 Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2012 and December 2012,
(d) 45% of the Senior Mezzanine and Group 2 Original Subordinate Principal
Balance if such Distribution Date occurs between and including January 2013 and
December 2013, and (e) 50% of the Senior Mezzanine and Group 2 Original
Subordinate Principal Balance if such Distribution Date occurs during or after
January 2014.

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

                                      -15-

<PAGE>

averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Senior Mezzanine and Group 2 Subordinate Certificates
does not exceed 50% and (b)(i) prior to the Distribution Date in January 2006
cumulative Realized Losses on the Group 2 Mortgage Loans do not exceed 20% of
the Senior Mezzanine and Group 2 Original Subordinate Principal Balance and (ii)
on or after the Distribution Date in January 2006 cumulative Realized Losses on
the Group 2 Mortgage Loans do not exceed 30% of the Senior Mezzanine and Group 2
Original Subordinate Principal Balance, then, in each case, the Group 2 Senior
Prepayment Percentage for such Distribution Date will equal the Group 2 Senior
Percentage; provided, however, if the current Senior Mezzanine and Subordinate
Percentage for the Certificates is equal to or greater than two times the
initial weighted average Senior Mezzanine and Subordinate Percentage for the
Certificates prior to January 25, 2006 and the above delinquency and loss tests
are met, then the Group 2 Senior Prepayment Percentage for such Distribution
Date will equal the Group 2 Senior Percentage plus 50% of the Senior Mezzanine
and Subordinate Percentage.

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

         GROUP 1 SUBORDINATE CERTIFICATES: 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.

         GROUP 2 SUBORDINATE CERTIFICATES: 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.

         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 Certificates on such Distribution Date)
exceeds (b) the aggregate Scheduled Principal Balance 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 Certificates on such Distribution Date)
exceeds (b) the aggregate Scheduled Principal Balance of the Group 2 Mortgage
Loans on the Due Date related to such Distribution Date.

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

         GROUP 1 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group 1
Mortgage Loans, on any Distribution Date, 100% minus the Group 1 Senior
Prepayment Percentage, except that on

                                      -16-

<PAGE>

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%.

         HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 13.02(b) and 13.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller or the Trustee or any Affiliate
thereof shall be deemed not to be outstanding and the Fractional Undivided
Interest evidenced thereby shall not be taken into account in determining
whether the requisite percentage of Fractional Undivided Interests necessary to
effect any such consent has been obtained.

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

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

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

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

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

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

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

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

         INTEREST ACCRUAL PERIOD: With respect to the Certificates (other than
the Class I-A-2 Certificates) will be the calendar month preceding the month in
which the Distribution Date occurs, beginning in December 2002. With respect to
the Class I-A-2 Certificates will be the period

                                      -17-

<PAGE>

commencing on the 25th day of the preceding calendar month (or, in the case of
the first Distribution Date, from the Closing Date) to the 24th day of the month
of that Distribution Date.

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

         INTEREST ONLY CERTIFICATES: The Class I-X-1, Class I-X-2 and Class
II-X-1 Certificates.

         INTEREST SHORTFALL: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:

         (a) Partial principal prepayments received during the relevant
         Prepayment Period: The difference between (i) one month's interest at
         the applicable Net Rate on the amount of such prepayment and (ii) the
         amount of interest for the calendar month of such prepayment (adjusted
         to the applicable Net Rate) received at the time of such prepayment;

         (b) Principal prepayments in full received during the relevant
         Prepayment Period: The difference between (i) one month's interest at
         the applicable Net Rate on the Scheduled Principal Balance of such
         Mortgage Loan immediately prior to such prepayment and (ii) the amount
         of interest for the calendar month of such prepayment (adjusted to the
         applicable Net Rate) received at the time of such prepayment; and

         (c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan, the
         excess of (i) 30 days' interest (or, in the case of a principal
         prepayment in full, interest to the date of prepayment) on the
         Scheduled Principal Balance thereof (or, in the case of a principal
         prepayment in part, on the amount so prepaid) at the related Net Rate
         over (ii) 30 days' interest (or, in the case of a principal prepayment
         in full, interest to the date of prepayment) on such Scheduled
         Principal Balance (or, in the case of a Principal Prepayment in part,
         on the amount so prepaid) at the Net Rate required to be paid by the
         Mortgagor as limited by application of the Relief Act.

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

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

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

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

                                      -18-

<PAGE>

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

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

         LOAN GROUP: Loan Group 1 or Loan Group 2 as applicable.

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

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

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

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

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

         MANDATORY AUCTION CERTIFICATES: The Class I-A-4 Certificates and Class
I-A-5 Certificates.

         MANDATORY AUCTION DISTRIBUTION DATE: October 25, 2009, or if such day
is not a Business Day, the next succeeding Business Day.

         MANDATORY AUCTION WINNER: Each of the highest bidders for the Mandatory
Auction Certificates on the Mandatory Auction Distribution Date in accordance
with the Market Value Swap.

         MARKET VALUE SWAP: The ISDA Master Agreement and Confirmation between
the Swap Counterparty and the Auction Administrator, attached hereto as Exhibit
K. The Market Value Swap shall not be part of the Trust Fund, the Trust, or any
REMIC.

         MARKET VALUE SWAP PROCEEDS: The amount payable by the Swap Counterparty
pursuant to the Market Value Swap on the Mandatory Auction Distribution Date.

         MASTER SERVICER: Wells Fargo Bank Minnesota, National Association.

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

                                      -19-

<PAGE>

f/b/o holders of Structured Asset Mortgage Investments Inc., Bear Stearns ARM
Trust 2002-12, Mortgage Pass-Through Certificates, Series 2002-12 - Master
Servicer Collection Account,"and which shall be an Eligible Account.

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

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

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

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

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

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

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

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

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of December 30, 2002, between EMC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto, attached as Exhibit J.

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

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

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

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

                                      -20-

<PAGE>

         MORTGAGOR: The obligor on a Mortgage Note.

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

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

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

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

         NOTIONAL AMOUNT: The Notional Amount of the Class I-X-1 Certificates,
as of any date of determination, is equal to the Current Principal Amount of the
Class I-A-1 Certificates, which for federal income tax purposes is the economic
equivalent of REMIC I Regular Interest LTI-IA1. The Notional Amount of the Class
I-X-2 Certificates is equal to the sum of the Notional Amounts of Component
I-X-2-1, Component I-X-2-2, Component I-X-2-3, Component I-X-2-4, Component I-X-
2-5 and Component I-X-2-6. On any Distribution Date, the Notional Amount of
Component I-X-2- 1, Component I-X-2-2, Component I-X-2-3, Component I-X-2-4,
Component I-X-2-5 and Component I-X-2-6 is equal to the Current Principal Amount
of the Class I-A-2, Class I-A-3, Class I-A-4, Class I-A-5, Class I-A-6 and Class
I-A-7 Certificates, respectively, immediately preceding that distribution date,
which for federal income tax purposes is the economic equivalent of REMIC I
Regular Interests LTI-IA2, LTI-IA3, LTI-IA4, LTI-IA5, LTI-IA6 and LTI-IA7,
respectively, immediately preceding that distribution date. The Notional Amount
of the Class II-X-1 Certificates, as of any date of determination, is equal to
the Current Principal Amount of the Class II-A-1 Certificates, which for federal
income tax purposes is the economic equivalent of REMIC II Regular Interest
LTII-IIA1.

         OFFERED CERTIFICATE: Any Senior Certificate or Offered Subordinate
Certificate.

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

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

                                      -21-

<PAGE>

of the Master Servicer or the Seller, as applicable, and delivered to the
Trustee, as required by this Agreement.

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

         PAR PRICE: With respect to each Mandatory Auction Certificate and the
Mandatory Auction Distribution Date, the Current Principal Amount thereof
immediately following the distributions made on the Mandatory Auction
Distribution Date.

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

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

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

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

         PERIODIC RATE CAP: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.

         PERMITTED INVESTMENTS: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:

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

                                      -22-

<PAGE>

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

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

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

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

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

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

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

                                      -23-

<PAGE>

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

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

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

         PHYSICAL CERTIFICATES: The Residual Certificates and the Private
Certificates.

         PREPAYMENT CHARGE: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.

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

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

         PRIVATE CERTIFICATES: Any Class I-B-4, Class I-B-5, Class I-B-6, Class
II-B-4, Class II-B-5, Class II-B-6 Certificate.

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

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

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

                                      -24-

<PAGE>

         QUALIFIED SUBSTITUTE MORTGAGE LOAN: as defined in the Servicing
Agreements.

         RATING AGENCIES: S&P and Moody's.

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

         RECORD DATe: For each class of Certificates (other than the Class I-A-2
Certificates) and the first Distribution Date, the Closing Date and for any
Distribution Date thereafter, the close of business on the last Business Day of
the month preceding the month in which such Distribution Date occurs. For the
Class Class I-A-2 Certificates, the Business Day preceding the applicable
Distribution Date so long as the Class I-A-2 Certificates remain in book-entry
form; and otherwise the Record Date shall be the same as for the other classes
of offered certificates.

         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 Group 1 Mortgage Loans, (ii) the portion of the
Master Servicer Collection Account relating to the Group 1 Mortgage Loans, (iii)
any REO Property relating to the Group 1 Mortgage Loans, (iv) the rights with
respect to the Servicing Agreements in respect of the Group 1 Mortgage Loans,
(v) the Mortgage Loan Purchase Agreement to the extent provided in Subsection
2.03(a) in respect of the Group 1 Mortgage Loans and (vi) any proceeds of the
foregoing.

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

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

         REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of (i) the Group 2 Mortgage Loans, (ii) the portion of the
Master Servicer Collection Account relating to the Group 2 Mortgage Loans, (iii)
any REO Property relating to the Group 2 Mortgage Loans, (iv) the rights with
respect to the Servicing Agreements in respect of the Group 2 Mortgage Loans,
(v) the Mortgage Loan Purchase Agreement to the extent provided in Subsection
2.03(a) in respect of the Group 2 Mortgage Loans and (vi) any proceeds of the
foregoing.

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

                                      -25-

<PAGE>

         REMIC II Regular Certificates: As defined in Section 5.01(c).

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

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

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

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

         REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Mortgage Loan
Seller or EMC pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02,
2.03 or 3.21 of this Agreement, an amount equal to the sum of (i) 100% of the
Outstanding Principal Balance of such Mortgage Loan as of the date of repurchase
(or if the related Mortgaged Property was acquired with respect thereto, 100% of
the Outstanding Principal Balance at the date of the acquisition), plus (ii)
accrued but unpaid interest on the Outstanding Principal Balance at the related
Mortgage Interest Rate, through and including the last day of the month of
repurchase, and reduced by (iii) any portion, if any, of the Servicing Fee,
Monthly Advances and advances payable to the purchaser of the Mortgage Loan.

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

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

         RESIDUAL CERTIFICATES: Any of the Class R Certificates.

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

         RULE 144A CERTIFICATE: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate) which
is a Qualified Institutional Buyer as defined

                                      -26-

<PAGE>

under Rule 144A promulgated under the Securities Act, substantially in the form
set forth as Exhibit F-2 hereto.

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

         SCHEDULED PAYMENT: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.

         SCHEDULED PRINCIPAL: The principal portion of any Scheduled Payment.

         SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) and less (ii) any Principal Prepayments (including the principal portion
of Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.

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

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

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

                                      -27-

<PAGE>

BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT
AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE
TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR
ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED [in the case of the Class I-B-4, Class I-B-5, Class I-B-6,
Class II-B-4, Class II-B-5 and Class II-B-6 Certificates:, UNLESS THE PROPOSED
TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND/OR
OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED
TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION
EXEMPTION ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23 AND (II)
WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY DUTIES ON THE PART OF THE SELLER,
THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER OR THE TRUSTEE,
WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A
GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF
COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR.

         SECURITY 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 or Group 2 Senior
Certificates.

         SENIOR MEZZANINE CERTIFICATE WRITEDOWN AMOUNT: As to any Distribution
Date after the aggregate Current Principal Amount of the Group 2 Subordinate
Certificates has been reduced to zero, 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 Certificates on
such Distribution Date) exceeds (b) the aggregate Scheduled Principal Balance of
the Group 2 Mortgage Loans on the Due Date related to such Distribution Date.

         SENIOR MEZZANINE AND GROUP 2 ORIGINAL SUBORDINATE PRINCIPAL BALANCE:
The aggregate Current Principal Amounts of each Class of Senior Mezzanine
Certificates and Group 2 Subordinate Certificates as of the Cut-off Date.

                                      -28-

<PAGE>

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

         SENIOR MEZZANINE AND SUBORDINATE PERCENTAGE: Initially, 5.00%. On any
Distribution Date, 100% minus the Group 2 Senior Percentage for the Group 2
Senior Certificates.

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

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

         SERVICER: With respect to the Group 1 Mortgage Loans, WFHM, or any
successor thereto, and with respect to the Group 2 Mortgage Loans, WMBFA, or any
successor thereto.

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

         SERVICING AGREEMENTS: The WFHM Servicing Agreement and the WMBFA
Servicing Agreement.

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

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

         STARTUP DAY: December 30, 2002.

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

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

                  (i) the applicable Group I Subordinate Percentage of the
         principal portion of all Scheduled Payments due on each Outstanding
         Mortgage Loan in the related Loan Group on the related Due Date as
         specified in the amortization schedule at the time applicable thereto
         (after adjustment for previous Principal Prepayments but before any
         adjustment to such

                                      -29-

<PAGE>

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

                  (ii) the applicable Group I 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 I
         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 definitions of
         Group 1 Senior Optimal Principal Amount on such Distribution Date;

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

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

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

                  (ii) the applicable Senior Mezzanine and 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 Senior Mezzanine and 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;

                                      -30-

<PAGE>

                  (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 definitions of
         Group 2 Senior Optimal Principal Amount on such Distribution Date;

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

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

         SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee
pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, in each case, (i) which has an Outstanding Principal
Balance not greater nor materially less than the Mortgage Loan for which it is
to be substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less
than, and not materially greater than, such Mortgage Loan; (iii) which has a
maturity date not materially earlier or later than such Mortgage Loan and not
later than the latest maturity date of any Mortgage Loan; (iv) which is of the
same property type and occupancy type as such Mortgage Loan; (v) which has a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage
Loan; (vi) which is current in payment of principal and interest as of the date
of substitution; (vii) as to which the payment terms do not vary in any material
respect from the payment terms of the Mortgage Loan for which it is to be
substituted and (viii) which has a Gross Margin, Periodic Rate Cap and Maximum
Lifetime Mortgage Rate no less than those of such Mortgage Loan, has the same
Index and interval between Interest Adjustment Dates as such Mortgage Loan, and
a Minimum Lifetime Mortgage Rate no lower than that of such Mortgage Loan.

         SWAP COUNTERPARTY: Bear Stearns International Limited, or any successor
swap counterparty appointed in accordance with the Market Value Swap.

         SWAP GUARANTEE: The guarantee of the Swap Guarantor of the obligations
of the Swap Counterparty attached hereto as Exhibit L.

         SWAP GUARANTOR: The Bear Stearns Companies, Inc., or any successor
thereto.

         SWAP TERMINATION EVENT: A default by the Swap Counterparty of its
obligations under the Market Value Swap and the failure of the Swap Guarantor to
honor the obligations of the Swap Counterparty under the Swap Guarantee.

         TAX MATTERS PERSON: The Securities Administrator or any successor
thereto or assignee thereof shall serve as tax administrator hereunder and as
agent for the Tax Matters Person. The

                                      -31-

<PAGE>

Holder of each Class of Residual Certificates shall be the Tax Matters Person
for the related REMIC, as more particularly set forth in Section 10.12 hereof.

         TERMINATION EVENT: As defined in the Market Value Swap.

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

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

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

         UNDERLYING SELLER: With respect to each Group 1 Mortgage Loan, WFHM,
and with respect to each Group 2 Mortgage Loan, WMBFA.

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

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

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

         WFHM Servicing Agreement: The Seller's Warranties and Servicing
Agreement, dated as of November 1, 2002, between EMC and WFHM, and the Seller's
Warranties and Servicing Agreement, dated as of December 1, 2002, between EMC
and WFHM, both of which are attached hereto as Exhibit H-1.

                                      -32-

<PAGE>

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

         WMBFA Servicing Agreement: The Servicing Agreement, dated as of April
1, 2001, between EMC and WMBFA, which is attached hereto as Exhibit H-2.

                                      -33-

<PAGE>

                                   ARTICLE II

                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates

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

         (b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Trustee or the Custodian, as its agent, with respect to
each Mortgage Loan, (i) the original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements from the
original payee thereof to the Person endorsing it to the Trustee, or lost note
affidavit, (ii) the original Security Instrument, which shall have been
recorded, with evidence of such recording indicated thereon, (iii) a certified
copy of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is located) to
"Bank One, National Association, as Trustee", with evidence of recording with
respect to each Mortgage Loan in the name of the Trustee thereon (or if clause
(x) in the proviso below applies or for Mortgage Loans with respect to which the
related Mortgaged Property is located in a state other than Maryland or an
Opinion of Counsel has been provided as set forth in this Section 2.01(b), shall
be in recordable form), (iv) all intervening assignments of the Security
Instrument, if applicable and only to the extent available to the Seller with
evidence of recording thereon, (v) the original or a copy of the policy or
certificate of primary mortgage guaranty insurance, to the extent available, if
any, (vi) the original policy of title insurance or mortgagee's certificate of
title insurance or commitment or binder for title insurance and (vii) originals
of all modification agreements, if applicable and available;

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<PAGE>

provided, however, that in lieu of the foregoing, the Seller may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording and have
not been returned to the Seller in time to permit their delivery as specified
above, the Seller may deliver a true copy thereof with a certification by the
Seller, on the face of such copy, substantially as follows: "Certified to be a
true and correct copy of the original, which has been transmitted for
recording"; (y) in lieu of the Security Instrument, assignment to the Trustee or
intervening assignments thereof, if the applicable jurisdiction retains the
originals of such documents (as evidenced by a certification from the Seller to
such effect) the Seller may deliver photocopies of such documents containing an
original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) the Seller shall not be
required to deliver intervening assignments or Mortgage Note endorsements
between the Underlying Seller and EMC Mortgage Corporation, between EMC Mortgage
Corporation and the Depositor, and between the Depositor and the Trustee; and
provided, further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-off Date and prior to the Closing Date, the
Seller, in lieu of delivering the above documents, may deliver to the Trustee or
the Custodian, as its agent, a certification to such effect and shall deposit
all amounts paid in respect of such Mortgage Loans in the Master Servicer
Collection Account on the Closing Date. The Seller shall deliver such original
documents (including any original documents as to which certified copies had
previously been delivered) to the Trustee or the Custodian, as its agent,
promptly after they are received. The Seller shall cause, at its expense, the
assignment of the Security Instrument to the Trustee to be recorded not later
than 180 days after the Closing Date, unless such recordation is not required by
the Rating Agencies or an Opinion of Counsel has been provided to the Trustee
(with a copy to the Custodian) which states that recordation of such Security
Instrument is not required to protect the interests of the Certificateholders in
the related Mortgage Loans; provided, however, that each assignment shall be
submitted for recording by the Seller in the manner described above, at no
expense to the Trust or the Trustee or the Custodian, as its agent, upon the
earliest to occur of : (i) reasonable direction by the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25% of the
Trust, (ii) the occurrence of an Event of Default, (iii) the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Seller and (iv) the
occurrence of a servicing transfer as described in Section 8.02 hereof.
Notwithstanding the foregoing, if the Seller fails to pay the cost of recording
the assignments, such expense will be paid by the Trustee and the Trustee shall
be reimbursed for such expenses by the Trust in accordance with Section 9.05.

         Section 2.02 ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust to it by the Seller
and receipt of, subject to further review and the exceptions which may be noted
pursuant to the procedures described below, and declares that it holds, the
documents (or certified copies thereof) delivered to it pursuant to Section
2.01, and declares that it will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it as Trustee in trust for the use and benefit of all
present and future Holders of the Certificates. On the Closing Date, the
Custodian, with respect to the Mortgage Loans, shall acknowledge with respect to
each Mortgage Loan by an Initial Certification substantially in the form of
Exhibit One to the Custodial Agreement receipt of the Mortgage File, but without
review of such Mortgage File, except to the extent

                                      -35-

<PAGE>

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

         (b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Seller a Final Certification substantially in the
form annexed as Exhibit Three to the Custodial Agreement. In conducting such
review, the Trustee or the Custodian, as its agent, will ascertain whether an
original of each document required to be recorded has been returned from the
recording office with evidence of

                                      -36-

<PAGE>

recording thereon or a certified copy has been obtained from the recording
office. If the Trustee or the Custodian, as its agent, finds any document
constituting part of the Mortgage File has not been received, or to be
unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans identified in Exhibit B or to
appear defective on its face, the Trustee or the Custodian, as its agent, shall
promptly notify the Mortgage Loan Seller (provided, however, that with respect
to those documents described in subsection (b)(iv), (b)(v) and (b)(vii) of
Section 2.01, the Trustee's obligations shall extend only to the documents
actually delivered pursuant to such subsections). In accordance with the
Mortgage Loan Purchase Agreement, the Mortgage Loan Seller shall correct or cure
any such defect or EMC shall deliver to the Trustee an Opinion of Counsel to the
effect that such defect does not materially or adversely affect the interests of
Certificateholders in such Mortgage Loan within 90 days from the date of notice
from the Trustee of the defect and if the Mortgage Loan Seller is unable to cure
such defect within such period, and if such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Trustee shall enforce the Mortgage Loan Seller's obligation under the
Mortgage Loan Purchase Agreement to purchase such Mortgage Loan at the
Repurchase Price, provided, however, that if such defect relates solely to the
inability of the Mortgage Loan Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy, because the
originals of such documents. or a certified copy, have not been returned by the
applicable jurisdiction, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan, if the Mortgage Loan Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date.

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

                                      -37-

<PAGE>

         Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE
AGREEMENT. (a) The Seller hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to Seller's rights and obligations
pursuant to the Servicing Agreements (noting that the Mortgage Loan Seller has
retained the right in the event of breach of the representations, warranties and
covenants, if any, with respect to the related Mortgage Loans of the Servicer
under the related Servicing Agreement to enforce the provisions thereof and to
seek all or any available remedies). The obligations of the Mortgage Loan Seller
to substitute or repurchase, as applicable, a Mortgage Loan shall be the
Trustee's and the Certificateholders' sole remedy for any breach thereof. At the
request of the Trustee, the Seller shall take such actions as may be necessary
to enforce the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.

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

                                      -38-

<PAGE>

         Section 2.04 SUBSTITUTION OF MORTGAGE LOANS. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this Agreement, the Mortgage Loan Seller may, no later than the date by which
such purchase by the Mortgage Loan Seller would otherwise be required, tender to
the Trustee a Substitute Mortgage Loan accompanied by a certificate of an
authorized officer of the Mortgage Loan Seller that such Substitute Mortgage
Loan conforms to the requirements set forth in the definition of "Substitute
Mortgage Loan" in the Mortgage Loan Purchase Agreement or this Agreement, as
applicable; provided, however, that substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, in lieu of
purchase shall not be permitted after the termination of the two-year period
beginning on the Startup Day; provided, further, that if the breach would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or substitution must occur within 90 days
from the date the breach was discovered. The Trustee or the Custodian, as its
agent, shall examine the Mortgage File for any Substitute Mortgage Loan in the
manner set forth in Section 2.02(a) and the Trustee or the Custodian, as its
agent, shall notify the Mortgage Loan Seller, in writing, within five Business
Days after receipt, whether or not the documents relating to the Substitute
Mortgage Loan satisfy the requirements of the fourth sentence of Subsection
2.02(a). Within two Business Days after such notification, the Mortgage Loan
Seller shall provide to the Trustee for deposit in the Distribution Account the
amount, if any, by which the Outstanding Principal Balance as of the next
preceding Due Date of the Mortgage Loan for which substitution is being made,
after giving effect to Scheduled Principal due on such date, exceeds the
Outstanding Principal Balance as of such date of the Substitute Mortgage Loan,
after giving effect to Scheduled Principal due on such date, which amount shall
be treated for the purposes of this Agreement as if it were the payment by the
Mortgage Loan Seller of the Repurchase Price for the purchase of a Mortgage Loan
by the Mortgage Loan Seller. After such notification to the Mortgage Loan Seller
and, if any such excess exists, upon receipt of such deposit, the Trustee shall
accept such Substitute Mortgage Loan which shall thereafter be deemed to be a
Mortgage Loan hereunder. In the event of such a substitution, accrued interest
on the Substitute Mortgage Loan for the month in which the substitution occurs
and any Principal Prepayments made thereon during such month shall be the
property of the Trust Fund and accrued interest for such month on the Mortgage
Loan for which the substitution is made and any Principal Prepayments made
thereon during such month shall be the property of the Mortgage Loan Seller. The
Scheduled Principal on a Substitute Mortgage Loan due on the Due Date in the
month of substitution shall be the property of the Mortgage Loan Seller and the
Scheduled Principal on the Mortgage Loan for which the substitution is made due
on such Due Date shall be the property of the Trust Fund. Upon acceptance of the
Substitute Mortgage Loan (and delivery to the Trustee or Custodian of a Request
for Release for such Mortgage Loan), the Trustee shall release to the Mortgage
Loan Seller the related Mortgage File related to any Mortgage Loan released
pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, and shall execute and deliver all instruments of
transfer or assignment, without recourse, in form as provided to it as are
necessary to vest in the Mortgage Loan Seller title to and rights under any
Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable. The Mortgage Loan Seller shall
deliver the documents related to the Substitute Mortgage Loan in accordance with
the provisions of the Mortgage Loan Purchase Agreement or Subsections 2.01(b)
and 2.02(b) of this Agreement, as applicable, with the date of acceptance of the
Substitute Mortgage Loan deemed to be the Closing Date for purposes of the time
periods set forth in those Subsections. The representations and warranties set
forth in the Mortgage

                                      -39-

<PAGE>

Loan Purchase Agreement shall be deemed to have been made by the Mortgage Loan
Seller with respect to each Substitute Mortgage Loan as of the date of
acceptance of such Mortgage Loan by the Trustee. The Trustee shall amend the
Mortgage Loan Schedule to reflect such substitution and shall provide a copy of
such amended Mortgage Loan Schedule to the Trustee and the Rating Agencies.

         Section 2.05 ISSUANCE OF CERTIFICATES. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the other assets comprising the Trust
Fund and, concurrently therewith, has signed, and countersigned and delivered to
the Seller, in exchange therefor, Certificates in such authorized denominations
representing such Fractional Undivided Interests as the Seller has requested.
The Trustee agrees that it will hold the Mortgage Loans and such other assets as
may from time to time be delivered to it segregated on the books of the Trustee
in trust for the benefit of the Certificateholders.

         The Seller, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Seller in and to the
REMIC I Regular Interests and REMIC II Regular Interests and the other assets of
REMIC I and REMIC II for the benefit of the holders of the REMIC III
Certificates. The Trustee acknowledges receipt of the REMIC I Regular Interests
and REMIC II Regular Interests (each of which are uncertificated) and the other
assets of REMIC I and REMIC II and declares that it holds and will hold the same
in trust for the exclusive use and benefit of the holders of the REMIC III
Certificates.

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

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

                  (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;

                                      -40-

<PAGE>

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

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

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

                  (vii) immediately prior to the transfer and assignment to the
         Trustee, each Mortgage Note and each Mortgage were not subject to an
         assignment or pledge, and the Seller had good and marketable title to
         and was the sole owner thereof and had full right to transfer and sell
         such Mortgage Loan to the Trustee free and clear of any encumbrance,
         equity, lien, pledge, charge, claim or security interest.

                                      -41-

<PAGE>

                                   ARTICLE III

                 Administration and Servicing of Mortgage Loans

         Section 3.01 MASTER SERVICER. (a) 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, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers to the Protected Account
pursuant to the applicable Servicing Agreements.

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

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

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

                                      -42-

<PAGE>

         Section 3.02 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Seller, the related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, accept any contribution to any REMIC after the
Startup Day without receipt of a REMIC Opinion.

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

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

         (c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of the Servicer as a result of an event of default
by such

                                      -43-

<PAGE>

Servicer and (ii) all costs and expenses associated with the complete transfer
of servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account.

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

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

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

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

                                      -44-

<PAGE>

action relating to the Mortgage Loans or the Mortgaged Property, in accordance
with the related Servicing Agreement and this Agreement, and the Trustee shall
execute and deliver such other documents, as the Master Servicer may request, to
enable the Master Servicer to master service and administer the Mortgage Loans
and carry out its duties hereunder, in each case in accordance with Accepted
Master Servicing Practices (and the Trustee shall have no liability for misuse
of any such powers of attorney by the Master Servicer or any Servicer). If the
Master Servicer or the Trustee has been advised that it is likely that the laws
of the state in which action is to be taken prohibit such action if taken in the
name of the Trustee or that the Trustee would be adversely affected under the
"doing business" or tax laws of such state if such action is taken in its name,
the Master Servicer shall join with the Trustee in the appointment of a
co-trustee pursuant to Section 10.11 hereof. In the performance of its duties
hereunder, the Master Servicer shall be an independent contractor and shall not,
except in those instances where it is taking action in the name of the Trustee,
be deemed to be the agent of the Trustee.

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

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

                                      -45-

<PAGE>

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

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

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

                                      -46-

<PAGE>

and payable to the Master Servicer or such Servicer under this Agreement or the
applicable Servicing Agreement.

         Section 3.09   STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.

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

         (b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, or by any Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.03 or Section 4.05. Any cost incurred by the Master Servicer or any Servicer
in maintaining any such insurance if the Mortgagor defaults in its obligation to
do so shall be added to the amount owing under the Mortgage Loan where the terms
of the Mortgage Loan so permit; provided, however, that the addition of any such
cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by the
Master Servicer or such Servicer pursuant to Section 4.03 or Section 4.05.

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

         Section 3.11   MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

         (a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of such Master
Servicer or Servicer, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause each Servicer (to the extent
required under the related Servicing Agreement) to keep in force and effect (to
the extent that the Mortgage Loan

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<PAGE>

requires the Mortgagor to maintain such insurance), primary mortgage insurance
applicable to each Mortgage Loan in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. The Master
Servicer shall not, and shall not permit any Servicer (to the extent required
under the related Servicing Agreement) to, cancel or refuse to renew any such
Primary Mortgage Insurance Policy that is in effect at the date of the initial
issuance of the Mortgage Note and is required to be kept in force hereunder
except in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable.

         (b) The Master Servicer agrees to present, or to cause each Servicer
(to the extent required under the related Servicing Agreement) to present, on
behalf of the Trustee and the Certificateholders, claims to the insurer under
any Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.03 or Section 4.05.

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

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

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

         Section 3.14      COMPENSATION FOR THE MASTER SERVICER.

         The Master Servicer will be entitled to all income and gain realized
from any investment of funds in the Distribution Account and the Master Servicer
Collection Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be

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<PAGE>

deposited in the Protected Account. The Master Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder and
shall not be entitled to reimbursement therefor except as provided in this
Agreement.

         Section 3.15      REO PROPERTY.

         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
related Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the Servicing Agreement, in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

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

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

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

         Section 3.16      ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

         The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before May 31 of each year, commencing on May 31, 2004, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been

                                      -49-

<PAGE>

a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that each Servicer
has failed to perform any of its duties, responsibilities and obligations under
the applicable 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.

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

         Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Seller on or
before May 31 of each year, commencing on May 31, 2004 to the effect that, with
respect to the most recently ended fiscal year, such firm has examined certain
records and documents relating to the Master Servicer's performance of its
servicing obligations under this Agreement and pooling and servicing and trust
agreements in material respects similar to this Agreement and to each other and
that, on the basis of such examination conducted substantially in compliance
with the audit program for mortgages serviced for Freddie Mac or the Uniform
Single Attestation Program for Mortgage Bankers, such firm is of the opinion
that the Master Servicer's activities have been conducted in compliance with
this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Freddie Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies. If
such report discloses exceptions that are material, the Master Servicer shall
advise the Trustee whether such exceptions have been or are susceptible of cure,
and will take prompt action to do so.

         Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION. (a)
Within 15 days after each Distribution Date, the Master Servicer shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System ("EDGAR"), a Form 8-K with a copy of the
statement to the Trustee who shall furnish a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. If
requested by the Seller, the Master Servicer shall, in accordance with industry
standards, file a Form 15 Suspension Notice with respect to the Trust Fund.
Prior to March 30, 2003 and annually thereafter, the Master Servicer shall,
subject to subsection (c), file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. Such Form 10-K shall include, to the
extent available, as exhibits (i) each applicable Servicer's annual statement of
compliance described under the related Servicing Agreement, (ii) each applicable
Servicer's accountant's report described under the related Servicing

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<PAGE>

Agreement, and (iii) the Master Servicer's accountant's report described under
Section 3.17, if applicable, in each case to the extent timely delivered, if
applicable, to the Master Servicer. If items (i) and (ii) in the preceding
sentence are not timely delivered, the Master Servicer shall file an amended
Form 10-K including such documents as exhibits reasonably promptly after they
are delivered to the Master Servicer. The Seller hereby grants to the Master
Servicer a limited power of attorney to execute and file each Form 8-K on behalf
of the Seller. Such power of attorney shall continue until either the earlier of
(i) receipt by the Master Servicer from the Seller of written termination of
such power of attorney and (ii) the termination of the Trust Fund. The Seller
and the Trustee each agree to promptly furnish to the Master Servicer, from time
to time upon request, such further information, reports and financial statements
within its control related to this Agreement and the Mortgage Loans as the
Master Servicer reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Master Servicer will cooperate with the Seller
in connection with any additional filings with respect to the Trust Fund as the
Seller deems necessary under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Copies of all reports filed by the Master Servicer under
the Exchange Act shall be sent to: the Seller c/o Bear, Stearns & Co. Inc.,
Attn: Managing Director-Analysis and Control, One Metrotech Center North,
Brooklyn, New York 11202-3859.

         (b) The Master Servicer shall indemnify and hold harmless the Seller,
the Trustee and their respective officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the Master Servicer's obligations under
this Section 3.18 or the Master Servicer's negligence, bad faith or willful
misconduct in connection therewith. Fees and expenses incurred by the Master
Servicer in connection with this Section 3.18 shall not be reimbursable from the
Trust Fund.

         (c) Nothing shall be construed from the foregoing subsection (a) and
(b) to require the Seller or the Master Servicer or any officer, director or
Affiliate thereof to sign any Form 10-K or any certification contained therein.
The failure of the Seller or the Master Servicer to sign the Form 10-K or any
certification contained therein shall not be regarded as a breach by the related
party of this Agreement. Furthermore, the inability of the Master Servicer to
file a Form 10-K as a result of the lack of required signatures on such Form
10-K or any certification contained therein shall not be regarded as a breach by
the Master Servicer of any obligation under this Agreement. However, the Seller,
the Master Servicer and the Trustee agree to negotiate in good faith to comply
with further guidance from the Commission concerning the filing of Form 10-Ks.

         (d) In connection with the preparation of any Form 8-Ks and the Form
10-K, the Seller, the Master Servicer, the Mortgage Loan Seller, the Securities
Administrator and the Trustee shall comply with all reasonable requests for
information, and shall promptly report to each other in writing any events which
materially and adversely affect the interests of the Certificateholders for
which such party has actual knowledge and which are not reflected in the
statements to Certificateholders, including, without limitation, the termination
of and transfer of servicing of any Servicers, downgrades of the rating of any
of the Certificates by the Rating Agencies, and any fraud discovered in the
origination of or servicing of the Mortgage Loans. With respect to the
Securities Administrator and the Master Servicer, actual knowledge requires
knowledge of any officer of the Securities Administrator or the Master Servicer
who is responsible for performing the duties of such

                                      -51-

<PAGE>

party hereunder who has actual knowledge of any such events. Actions taken or
actions not taken of which the Securities Administrator or the Master Servicer
should have had knowledge, or have constructive knowledge, do not constitute
actual knowledge herein; provided, however, that (a) the Master Servicer and the
Securities Administrator shall make reasonable inquiries as to any such events
from responsible employees of the Master Servicer and the Securities
Administrator, respectively, and (b) the Master Servicer shall make reasonable
inquiries from each Servicer as to any such events.

         (e) Notwithstanding the provisions of Section 13.02, this Section 3.18
may be amended without the consent of the Certificateholders.

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

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

         Section 3.21      OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.

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

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

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<PAGE>

                                   ARTICLE IV

                                    Accounts

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

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

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

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

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

                                      -53-

<PAGE>

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

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

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

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

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

                  (i) Any amounts withdrawn from a Protected Account;

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

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

                  (iv) The Repurchase Price with respect to any Mortgage Loans
         purchased by the Mortgage Loan Seller or Section 2.02 or 2.03, any
         amounts which are to be treated pursuant to Section 2.04 of this
         Agreement as the payment of such a Repurchase Price, the Repurchase
         Price with respect to any Mortgage Loans purchased by EMC pursuant to
         Section 3.21, and all proceeds of any Mortgage Loans or property
         acquired with respect thereto repurchased by the Seller or its designee
         pursuant to Section 11.01;

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

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

                                      -54-

<PAGE>

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

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

         Section 4.03 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER
SERVICER COLLECTION ACCOUNT. (a) The Master Servicer will, from time to time on
demand of a Servicer or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the related Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 11.01 and
remove amounts from time to time deposited in error.

         (b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any fees or expenses recoverable by the
Trustee, the Master Servicer or the Securities Administrator or the Custodian
pursuant to Sections 3.03, 7.04, 9.01 and 10.05 and (ii) any amounts payable to
the Master Servicer as set forth in Section 3.14.

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

                                      -55-

<PAGE>

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

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

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

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

         (d) On the Closing Date, the Seller will deposit $50 into the
Distribution Account in order to pay the Class R-I Certificates on the first
Distribution Date.

                                      -56-

<PAGE>

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

                  (i) to reimburse the Master Servicer or any Servicer for any
         Monthly Advance of its own funds 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 in good faith in connection with the restoration of the
         related Mortgaged Property which was damaged by an Uninsured Cause or
         in connection with the liquidation of such Mortgage Loan;

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

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

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

                  (vi)     to reimburse the Master Servicer or any Servicer for
         advances of funds pursuant to Sections, and the right to reimbursement
         pursuant to this subclause being limited

                                      -57-

<PAGE>

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

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

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

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

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

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

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

                  (xiii)   to remove amounts deposited in error; and

                  (xiv)    to clear and terminate the Distribution Account
         pursuant to Section 11.01.

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

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

                                      -58-

<PAGE>

                                    ARTICLE V

                                  Certificates

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

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

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

         (b) If (i)(A) the Seller advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Trustee or the Seller is unable to
locate a qualified successor within 30 days or (ii) the Seller at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. Neither the Seller nor the
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.

         (c) (i) [RESERVED].

                                      -59-

<PAGE>

                  (ii) REMIC I will be evidenced by (x) the REMIC I Regular
         Interests (designated below), which will be uncertificated and
         non-transferable and are hereby designated as the "regular interests"
         in REMIC I and (y) the Class R-I Certificates, which is hereby
         designated as the single "residual interest" in REMIC I. Principal
         shall be payable to, and shortfalls, losses and prepayments are
         allocable to, the REMIC I Regular Interests as such amounts are payable
         and allocable to the Corresponding Certificates.

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

      REMIC I           Initial Balance         Pass-Through Rate
      Interest

      LTI-IA1       $75,000,000.00                     (1)
      LTI-IA2       $237,500,000.00                    (1)
      LTI-IA3       $90,000,000.00                     (1)
      LTI-IA4       $165,500,000.00                    (1)
      LTI-IA5       $230,500,000.00                    (1)
      LTI-IA6       $66,000,000.00                     (1)
      LTI-IA7       $111,917,600.00                    (1)
      LTI-IB1       $10,536,900.00                     (1)
      LTI-IB2       $8,028,100.00                      (1)
      LTI-IB3       $3,512,300.00                      (1)
      LTI-IB4       $2,007,000.00                      (1)
      LTI-IB5       $1,505,300.00                      (1)
      LTI-IB6       $1,505,269.00                      (1)
        R-I         $50.00                             (1)

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

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

REMIC II will be evidenced by (x) the REMIC II Regular Interests (designated
below), which will be uncertificated and non-transferable and are hereby
designated as the "regular interests" in REMIC II and (y) the Class R-II
Certificates, which is hereby designated as the single "residual interest" in
REMIC II. Principal shall be payable to, and shortfalls, losses and prepayments
are allocable to, the REMIC II Regular Interests as such amounts are payable and
allocable to the Corresponding Certificates.

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

      REMIC II          Initial Balance         Pass-Through Rate
      Interest

     LTII-IIA1      $300,000,000.00                    (1)
     LTII-IIA2      $25,893,300.00                     (1)
     LTII-IIA3      $7,203,900.00                      (1)

                                      -60-

<PAGE>

     LTII-IIB1      $3,945,100.00                      (1)
     LTII-IIB2      $2,744,300.00                      (1)
     LTII-IIB3      $1,372,200.00                      (1)
     LTII-IIB4      $857,600.00                        (1)
     LTII-IIB5      $514,600.00                        (1)
     LTII-IIB6      $514,616.00                        (1)
     LTII-RIII      $50.00                             (1)
        R-II        $50.00                             (1)

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

                  (iii) REMIC III will be evidenced by (x) the Certificates
         (other than the Class R Certificates) (the "REMIC III Regular
         Certificates"), which are hereby designated as the "regular interests"
         in REMIC III 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-III Certificate, which is hereby designated as the single
         "residual interest" in REMIC III.

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

                            Initial Principal
       Designation                 Amount            Pass-Through Rate
---------------------------------------------------------------------------
Class I-A-1                         $  75,000,000           (1)
Class I-A-2                          $237,500,000           (2)
Class I-A-3                         $  90,000,000           (3)
Class I-A-4                          $165,500,000           (4)
Class I-A-5                          $230,500,000           (5)
Class I-A-6                         $  66,000,000           (6)
Class I-A-7                          $111,917,600           (7)
Class I-X-1                                    (8)          (9)
Class I-X-2                                    (8)*         (10)
Class II-A-1                         $300,000,000           (11)
Class II-A-2                        $  25,893,300           (12)
Class II-X-1                                   (8)          (13)
Class II-A-3                       $    7,203,900           (12)
Class I-B-1                         $  10,536,900           (14)
Class I-B-2                        $    8,028,100           (14)
Class I-B-3                        $    3,512,300           (14)
Class I-B-4                        $    2,007,000           (14)
Class I-B-5                        $    1,505,300           (14)
Class I-B-6                        $    1,505,269           (14)
Class II-B-1                       $    3,945,100           (12)

                                      -61-

<PAGE>

Class II-B-2                      $     2,744,300           (12)
Class II-B-3                      $     1,372,200           (12)
Class II-B-4                      $       857,600           (12)
Class II-B-5                      $       514,600           (12)
Class II-B-6                      $       514,617           (12)
Class R-I                         $            50           N/A
Class R-II                        $            50           (15)
Class R-III                       $            50           (15)

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

* On any Distribution Date, the Notional Amount of the Class I-X-1 Certificates,
as of any date of determination, is equal to the Current Principal Amount of the
Class I-A-1 Certificates, which for federal income tax purposes is the economic
equivalent of REMIC I Regular Interest LTI-IA1. The Notional Amount of the Class
I-X-2 Certificates is equal to the sum of the Notional Amounts of Component
I-X-2-1, Component I-X-2-2, Component I-X-2-3, Component I-X-2- 4, Component
I-X-2-5 and Component I-X-2-6. On any Distribution Date, the Notional Amount of
Component I-X-2-1, Component I-X-2-2, Component I-X-2-3, Component I-X-2-4,
Component I-X-2-5 and Component I-X-2-6 is equal to the Current Principal Amount
of the Class I-A-2, Class I-A-3, Class I-A-4, Class I-A-5, Class I-A-6 and Class
I-A-7 Certificates, respectively, immediately preceding that distribution date,
which for federal income tax purposes is the economic equivalent of REMIC I
Regular Interests LTI-IA2, LTI-IA3, LTI-IA4, LTI-IA5, LTI-IA6 and LTI-IA7,
respectively, immediately preceding that distribution date. The Notional Amount
of the Class II-X-1 Certificates, as of any date of determination, is equal to
the Current Principal Amount of the Class II-A-1 Certificates, which for federal
income tax purposes is the economic equivalent of REMIC II Regular Interest
LTII-IIA1.

         (1) On or prior to the Distribution Date occurring in October 2009, the
Class I-A-1 Certificates will bear interest at a variable Pass-Through Rate
equal to the weighted average of the Net Rates of the Group 1 Mortgage Loans
(weighted on the basis of the Stated Principal Balances thereof as of the
beginning of the related Due Period), minus 0.481% per annum. After the
Distribution Date in October 2009, the Class I-A-1 Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group 1 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period);
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as (i) on or prior to
the Distribution Date occurring in October 2009, the weighted average of the
Pass-Through Rates on the REMIC I Regular Interests, weighted on the basis of
the Uncertificated Principal Balance of each such REMIC I Regular Interest
immediately preceding the related Distribution Date, minus 0.481% per annum and
(ii) after the Distribution Date in October 2009, the weighted average of the
Pass-Through Rates on the REMIC I Regular Interests, weighted on the basis of
the Uncertificated Principal Balance of each such REMIC I Regular Interest. The
Pass-Through Rate with respect to the first Interest Accrual Period is expected
to be approximately 4.875% per annum.

         (2) On or prior to the Distribution Date occurring in October 2009, the
Class I-A-2 Certificates will bear interest at a variable Pass-Through Rate
equal to the lesser of (a) 1.967% per annum and (b) the weighted average of the
Net Rates of the Group 1 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period). After
the Distribution Date in October 2009, the Class I-A-2 Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group 1 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period);
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as (i) on or prior to
the Distribution Date occurring in October 2009, the lesser of (x) 1.967% per
annum and (y) the weighted average of the Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest immediately preceding the related
Distribution Date and (ii) after the Distribution Date in October 2009, the
weighted average of the Pass-Through Rates on the REMIC I Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest.

                                      -62-

<PAGE>

         (3) On or prior to the Distribution Date occurring in October 2009, the
Class I-A-3 Certificates will bear interest at a variable Pass-Through Rate
equal to the lesser of (a) 3.131% per annum and (b) the weighted average of the
Net Rates of the Group 1 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period). After
the Distribution Date in October 2009, the Class I-A-3 Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group 1 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period);
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as (i) on or prior to
the Distribution Date occurring in October 2009, the lesser of (x) 3.131% per
annum and (y) the weighted average of the Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest immediately preceding the related
Distribution Date and (ii) after the Distribution Date in October 2009, the
weighted average of the Pass-Through Rates on the REMIC I Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest.

         (4) On or prior to the Distribution Date occurring in October 2009, the
Class I-A-4 Certificates will bear interest at a variable Pass-Through Rate
equal to the lesser of (a) 3.545% per annum and (b) the weighted average of the
Net Rates of the Group 1 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period). After
the Distribution Date in October 2009, the Class I-A-4 Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group 1 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period);
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as (i) on or prior to
the Distribution Date occurring in October 2009, the lesser of (x) 3.545% per
annum and (y) the weighted average of the Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest immediately preceding the related
Distribution Date and (ii) after the Distribution Date in October 2009, the
weighted average of the Pass-Through Rates on the REMIC I Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest.

         (5) On or prior to the Distribution Date occurring in October 2009, the
Class I-A-5 Certificates will bear interest at a variable Pass-Through Rate
equal to the lesser of (a) 4.334% per annum and (b) the weighted average of the
Net Rates of the Group 1 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period). After
the Distribution Date in October 2009, the Class I-A-5 Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group 1 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period);
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as (i) on or prior to
the Distribution Date occurring in October 2009, the lesser of (x) 4.334% per
annum and (y) the weighted average of the Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest immediately preceding the related
Distribution Date and (ii) after the Distribution Date in October 2009, the
weighted average of the Pass-Through Rates on the REMIC I Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest.

         (6) On or prior to the Distribution Date occurring in October 2009, the
Class I-A-6 Certificates will bear interest at a variable Pass-Through Rate
equal to the lesser of (a) 4.935% per annum and (b) the weighted average of the
Net Rates of the Group 1 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period). After
the Distribution Date in October 2009, the Class I-A-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 (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period);
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as (i) on or prior to
the Distribution Date occurring in October 2009, the lesser of (x) 4.935% per
annum and (y) the weighted average of the Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest immediately preceding the related
Distribution Date and (ii) after the Distribution Date in October 2009, the
weighted average of the Pass-Through Rates on the REMIC I Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest.

         (7) On or prior to the Distribution Date occurring in October 2009, the
Class I-A-7 Certificates will bear interest at a variable Pass-Through Rate
equal to the weighted average of the Net Rates of the Group 1 Mortgage Loans
(weighted on the basis of the Stated Principal Balances thereof as of the
beginning of the related Due Period), minus

                                      -63-

<PAGE>

0.244% per annum. After the Distribution Date in October 2009, the Class I-A-7
Certificates will bear interest at a variable Pass-Through Rate equal to the
weighted average of the Net Rates of the Group 1 Mortgage Loans (weighted on the
basis of the Stated Principal Balances thereof as of the beginning of the
related Due Period); provided that for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as (i) on or prior to the Distribution Date occurring in October 2009, the
weighted average of the Pass-Through Rates on the REMIC I Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest immediately preceding the related Distribution Date, minus
0.244% per annum and (ii) after the Distribution Date in October 2009, the
weighted average of the Pass-Through Rates on the REMIC I Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest. The Pass-Through Rate with respect to the first Interest
Accrual Period is expected to be approximately 5.112% per annum.

         (8  As described in the definition of Notional Amount herein.

         (9) The Class I-X-1 Certificates will bear interest at a fixed
Pass-Through Rate equal to 0.481% per annum based on a Notional Amount equal to
the aggregate Current Principal Amount of the Class I-A-1 Certificates. After
the Distribution Date in October 2009, the Class I-X-1 Certificates will not
bear any interest.

         (10) The Class I-X-2 Certificates will consist of six components,
Component I-X-2-1, Component I-X-2-2, Component I-X-2-3, Component I-X-2-4,
Component I-X-2-5 and Component I-X-2-6.

                  (a) Component I-X-2-1 will bear interest, up to and including
                  the Distribution Date in October 2009, at a variable
                  Pass-Through Rate equal to the greater of (i) zero and (ii)
                  the weighted average of the Net Rates of the Group 1 Mortgage
                  Loans (weighted on the basis of the Stated Principal Balances
                  thereof as of the beginning of the related Due Period) over
                  the Pass-Through Rate on the Class I-A-2 Certificates based on
                  a Notional Amount equal to the Current Principal Amount of the
                  Class I-A-2 Certificates. After the Distribution Date in
                  October 2009, the Component I-X-2-1 will not bear any
                  interest.

                  (b) Component I-X-2-2 will bear interest, up to and including
                  the Distribution Date in October 2009, at a variable
                  Pass-Through Rate equal to the greater of (i) zero and (ii)
                  the weighted average of the Net Rates of the Group 1 Mortgage
                  Loans (weighted on the basis of the Stated Principal Balances
                  thereof as of the beginning of the related Due Period) over
                  the Pass-Through Rate on the Class I-A-3 Certificates based on
                  a Notional Amount equal to the Current Principal Amount of the
                  Class I-A-3 Certificates. After the Distribution Date in
                  October 2009, the Component I-X-2-2 will not bear any
                  interest.

                  (c) Component I-X-2-3 will bear interest, up to and including
                  the Distribution Date in October 2009, at a variable
                  Pass-Through Rate equal to the greater of (i) zero and (ii)
                  the weighted average of the Net Rates of the Group 1 Mortgage
                  Loans (weighted on the basis of the Stated Principal Balances
                  thereof as of the beginning of the related Due Period) over
                  the Pass-Through Rate on the Class I-A-4 Certificates based on
                  a Notional Amount equal to the Current Principal Amount of the
                  Class I-A-4 Certificates. After the Distribution Date in
                  October 2009, the Component I-X-2-3 will not bear any
                  interest.

                  (d) Component I-X-2-4 will bear interest, up to and including
                  the Distribution Date in October 2009, at a variable
                  Pass-Through Rate equal to the greater of (i) zero and (ii)
                  the weighted average of the Net Rates of the Group 1 Mortgage
                  Loans (weighted on the basis of the Stated Principal Balances
                  thereof as of the beginning of the related Due Period) over
                  the Pass-Through Rate on the Class I-A-5 Certificates based on
                  a Notional Amount equal to the Current Principal Amount of the
                  Class I-A-5 Certificates. After the Distribution Date in
                  October 2009, the Component I-X-2-4 will not bear any
                  interest.

                  (e) Component I-X-2-5 will bear interest, up to and including
                  the Distribution Date in October 2009, at a variable
                  Pass-Through Rate equal to the greater of (i) zero and (ii)
                  the weighted average of the Net Rates of the Group 1 Mortgage
                  Loans (weighted on the basis of the Stated Principal Balances

                                      -64-

<PAGE>

                  thereof as of the beginning of the related Due Period) over
                  the Pass-Through Rate on the Class I-A-6 Certificates based on
                  a Notional Amount equal to the Current Principal Amount of the
                  Class I-A-6 Certificates. After the Distribution Date in
                  October 2009, the Component I-X-2-5 will not bear any
                  interest.

                  (f) Component I-X-2-6 will bear interest, up to and including
                  the Distribution Date in October 2009, at a fixed Pass-Through
                  Rate equal to 0.244% per annum based on a Notional Amount
                  equal to the aggregate Current Principal Amount of the Class
                  I-A-7 certificates. After the Distribution Date in October
                  2009, the Component I-X-2-6 will not bear any interest.

         (11) On or prior to the Distribution Date occurring in December 2007,
the Class II-A-1 Certificates will bear interest at a variable Pass-Through Rate
equal to the weighted average of the Net Rates of the Group 2 Mortgage Loans
(weighted on the basis of the Stated Principal Balances thereof as of the
beginning of the related Due Period), minus 0.722% per annum. After the
Distribution Date in December 2007, the Class II-A-1 Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group 2 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period);
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as (i) on or prior to
the Distribution Date occurring in December 2007, the weighted average of the
Pass-Through Rates on the REMIC II Regular Interests, weighted on the basis of
the Uncertificated Principal Balance of each such REMIC II Regular Interest
immediately preceding the related Distribution Date, minus 0.722% per annum and
(ii) after the Distribution Date in December 2007, the weighted average of the
Pass-Through Rates on the REMIC II Regular Interests, weighted on the basis of
the Uncertificated Principal Balance of each such REMIC II Regular Interest. .
The Pass- Through Rate with respect to the first interest accrual period is
expected to be approximately 4.155% per annum.

         (12) The Class II-A-2, Class II-A-3, 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 (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period);
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass-Through Rates on the REMIC II Regular Interests, weighted on
the basis of the Uncertificated Principal Balance of each such REMIC II Regular
Interest immediately preceding the related Distribution Date. The Pass-Through
Rate with respect to the first interest accrual period is expected to be
approximately 4.877% per annum.

         (13) The Class II-X-1 Certificates will bear interest at a fixed
Pass-Through Rate equal to 0.722% per annum based on a Notional Amount equal to
the aggregate Current Principal Amount of the Class II-A-1 Certificates. After
the Distribution Date in December 2007, the Class II-X-1 Certificates will not
bear any interest.

         (14) 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 will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 1 Mortgage
Loans (weighted on the basis of the Stated Principal Balances thereof as of the
beginning of the related Due Period); provided that for federal income tax
purposes such Certificates will bear interest at a rate equivalent to the
foregoing, expressed as the weighted average of the Pass-Through Rates on the
REMIC I Regular Interests, weighted on the basis of the Uncertificated Principal
Balance of each such REMIC I Regular Interest immediately preceding the related
Distribution Date. The Pass-Through Rate with respect to the first interest
accrual period is expected to be approximately 5.356% per annum.

         (15) The Class R-II Certificates and Class R-III Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group 2 Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof as of the beginning of the related Due Period);
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass- Through Rates on the REMIC II Regular Interests, weighted
on the basis of the Uncertificated Principal Balance of each such REMIC II
Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate with respect to the first interest accrual period is expected
to be approximately 4.877% per annum.

                                      -65-

<PAGE>

         (d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Trust Fund has been
designated as the "latest possible maturity date" for the REMIC I Regular
Interests, REMIC II Regular Interests and the Certificates.

         (e) With respect to each Distribution Date, each Class of Certificates,
or Component of the Class I-X-2 Certificates, shall accrue interest during the
related Interest Accrual Period. With respect to each Distribution Date and each
such Class or Component 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 or Component
applicable to such Distribution Date.

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

         (g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates) and the
Senior Mezzanine Certificates, $1,000 and in each case increments of $1.00 in
excess thereof, and (ii) in the case of the Subordinate Certificates, $25,000
and increments of $1.00 in excess thereof, except that one Certificate of each
such Class may be issued in a different amount so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Current Principal Amount of such Class on the Closing Date. On the Closing Date,
the Trustee shall execute and countersign Physical Certificates all in an
aggregate principal amount that shall equal the Current Principal Amount of such
Class on the Closing Date. The Residual Certificates shall each be issued in
certificated fully-registered form in the denomination of $50 and $50,
respectively. Each Class of Global Certificates, if any, shall be issued in
fully registered form in minimum dollar denominations of $50,000 and integral
multiples 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

                                      -66-

<PAGE>

of Offered Certificates, the Certificate in the entire Current Principal Amount
of the respective Class and (ii) in the case of each Class of Private
Certificates, Individual Certificates all in an aggregate principal amount that
shall equal the Current Principal Amount of each such respective Class on the
Closing Date. The Certificates referred to in clause (i) and if at any time
there are to be Global Certificates, the Global Certificates shall be delivered
by the Seller to the Depository or pursuant to the Depository's instructions,
shall be delivered by the Seller on behalf of the Depository to and deposited
with the DTC Custodian. The Trustee shall sign the Certificates by facsimile or
manual signature and countersign them by manual signature on behalf of the
Trustee by one or more authorized signatories, each of whom shall be Responsible
Officers of the Trustee or its agent. A Certificate bearing the manual and
facsimile signatures of individuals who were the authorized signatories of the
Trustee or its agent at the time of issuance shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
positions prior to the delivery of such Certificate.

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

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

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

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

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

         THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
         BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
         WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
         ACT OF 1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE
         CODE OF 1986, AS AMENDED [in the case of Private Certificates Only],
         UNLESS THE 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

                                      -67-

<PAGE>

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

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

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

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

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

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

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

                                      -71-

<PAGE>

                  COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL
                  ACCREDITED INVESTOR.

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

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

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

                                      -72-

<PAGE>

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

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

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

         Section 5.06 RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES. (a) No
offer, sale, transfer or other disposition (including pledge) of any Certificate
shall be made by any Holder thereof unless registered under the Securities Act,
or an exemption from the registration requirements of the Securities Act and any
applicable state securities or "Blue Sky" laws is available and the prospective
transferee (other than the Seller) of such Certificate signs and delivers to the
Trustee an Investment Letter, if the transferee is an Institutional Accredited
Investor, in the form set forth as Exhibit F-l hereto, or a Rule 144A
Certificate, if the transferee is a QIB, in the form set forth as Exhibit F-2
hereto. Notwithstanding the provisions of the immediately preceding sentence, no
restrictions shall apply with respect to the transfer or registration of
transfer of a beneficial interest in any Certificate that is a Global
Certificate of a Class to a transferee that takes delivery in the form of a
beneficial interest in the Global Certificate of such Class provided that each
such transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that it is
a QIB. In the case of a proposed transfer of any Certificate to a transferee
other than a QIB, the Trustee may require an Opinion of Counsel that such
transaction is

                                      -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)      The Private Certificates shall each bear a Securities Legend.

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

         (b) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that in the case of the Class B-4, Class B-5 and
Class B-6 Certificates, either: (i) it is not acquiring an interest in such
Certificate directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement which is subject to Title I of ERISA and/or
Section 4975 of the Code, or (ii) the transfer and/or holding of an interest in
such Certificate to that Person and the subsequent servicing, management and/or
operation of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to, PTE 84-14, PTE 91-38, PTE
90-1, PTE 95-60 or PTE 96- 23 and (II) will not give rise to any obligation on
the part of the Seller, the Master Servicer, the Securities Administrator or the
Trustee in addition to those undertaken in the Agreement.

         (c) Any person acquiring an interest in a Mandatory Auction Certificate
before the Mandatory Auction Distribution Date 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

                                      -74-

<PAGE>

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 acquisition and holding
of the Certificate are eligible for the exemptive relief available under PTE
84-14, PTE 91-38, PTE 90-1, PTE 95-60 or PTE 96-23.

         (d) None of the Trustee, the Master Servicer, or the Securities
Administrator will be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to the Global Certificates. Any
attempted or purported transfer of any Certificate in violation of the
provisions of Subsections (a) or (b) above shall be void ab initio and such
Certificate shall be considered to have been held continuously by the prior
permitted Certificateholder. Any transferor of any Certificate in violation of
such provisions, shall indemnify and hold harmless the Trustee, the Master
Servicer and the Securities Administrator from and against any and all
liabilities, claims, costs or expenses incurred by the Trustee, the Master
Servicer or the Securities Administrator as a result of such attempted or
purported transfer. The Trustee shall have no liability for transfer of any such
Global Certificates in or through book-entry facilities of any Depository or
between or among Depository Participants or Certificate Owners made in violation
of the transfer restrictions set forth herein.

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

                                      -75-

<PAGE>

                                   ARTICLE VI

                         Payments to Certificateholders

         Section 6.01 DISTRIBUTIONS ON THE CERTIFICATES. (a) Interest and
principal on the Certificates will be distributed monthly on each Distribution
Date, commencing in January 2003 in an aggregate amount equal to the Available
Funds for such Distribution Date.

                  (i) On the first Distribution Date, the amount deposited by
the Seller into the Distribution Account on the Closing Date pursuant to Section
4.04(d) will be distributed to the Class R-I Certificates, in reduction of its
Current Principal Amount, until its Current Principal Amount has been reduced to
zero.

                  (ii) On each Distribution Date, the Group 1 Available Funds
shall be distributed as follows:

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

                           (i)      FIRST, to the Group 1 Senior Certificates,
                                    including the related Components, the
                                    Accrued Certificate Interest on each such
                                    Class or Component for such Distribution
                                    Date. As described below, Accrued
                                    Certificate Interest on the Group 1 Senior
                                    Certificates is subject to reduction in the
                                    event of certain Net Interest Shortfalls
                                    allocable thereto. Any Net Interest
                                    Shortfalls shall be allocated among the
                                    Group 1 Senior Certificates as described
                                    below;

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

                           (iii)    THIRD, the Group 1 Senior Optimal Principal
                                    Amount for such Distribution Date, in each
                                    case, to the extent of remaining Group 1
                                    Available Funds, shall be distributed
                                    concurrently as follows, except as provided
                                    in clause (C) below:

                                    (a)     7.6811397091% of the Group 1 Senior
                                            Optimal Principal Distribution
                                            Amount to the Class I-A-1
                                            Certificates, in reduction of the
                                            Current Principal Amount thereof,
                                            until the Current Principal Amount
                                            of such Class has been reduced to
                                            zero; and

                                    (b)     92.3188602909% of the Group 1 Senior
                                            Optimal Principal Distribution
                                            Amount shall be distributed
                                            sequentially, to the Class I-A-2,
                                            Class I-A-3, Class I-A-4, Class
                                            I-A-5, Class I-A-

                                      -76-
<PAGE>

                                            6 and Class I-A-7 Certificates, in
                                            that order, in reduction of the
                                            Current Principal Amounts thereof,
                                            until the Current Principal Amounts
                                            of such Classes have been reduced to
                                            zero.

                  (B) On each Distribution Date prior to the Group 1 Cross-Over
                  Date, an amount equal to any remaining Group 1 Available Funds
                  after the distributions in (a)(ii)(A) above will be
                  distributed 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, in each case, to the extent
                  of remaining Group 1 Available Funds.

                  (C) On each Distribution Date after the Group 1 Cross-Over
                  Date, the amount payable to the Group 1 Senior Certificates as
                  provided in priority THIRD of clause (a)(ii)(A) above shall be
                  paid to the Group 1 Senior Certificates on a pro rata basis,
                  in reduction of the Current Principal Amounts thereof, until
                  reduced to zero.

                  (D) If, after distributions have been made pursuant to
                  priorities FIRST and SECOND of clause (a)(ii)(A) above on any
                  Distribution Date, the remaining Group 1 Available Funds is
                  less than the sum of the Group 1 Senior Optimal Principal
                  Amount, such amount shall be reduced, and such remaining funds
                  will be distributed on the related Senior Certificates on the
                  basis of such reduced amount.

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

         (iii) On each Distribution Date, the Group 2 Available Funds shall be
distributed as follows:

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

                           (i)      FIRST, to the Group 2 Senior Certificates,
                                    the Accrued Certificate Interest on each
                                    such Class for such Distribution Date. As
                                    described below, Accrued Certificate
                                    Interest on the Group 2 Senior Certificates
                                    is subject to reduction in the event of
                                    certain Net Interest Shortfalls

                                      -77-
<PAGE>

                                    allocable thereto. Any Net Interest
                                    Shortfalls shall be allocated among the
                                    Group 2 Senior Certificates as described
                                    below;

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

                           (iii)    THIRD, sequentially, in the following order,
                                    the Group 2 Senior Optimal Principal Amount
                                    for such Distribution Date, in each case, to
                                    the extent of remaining Group 2 Available
                                    Funds, shall be distributed as follows:

                                    (a)     first, concurrently, on a pro rata
                                            basis, to the Class R-II
                                            Certificates and Class R-III
                                            Certificates, in reduction of the
                                            Current Principal Amounts thereof,
                                            until the Current Principal Amounts
                                            of such Classes have been reduced to
                                            zero; and

                                    (b)     second, concurrently, on a pro rata
                                            basis, to the Class II-A-1
                                            Certificates and Class II-A-2
                                            Certificates, in reduction of the
                                            Current Principal Amounts thereof,
                                            until the Current Principal Amounts
                                            of such Classes have been reduced to
                                            zero.

                  (B) On each Distribution Date prior to the Group 2 Cross-Over
                  Date, an amount equal to any remaining Group 2 Available Funds
                  after the distributions in (a)(iii)(A) above will be
                  distributed to the Class II-A-3 Certificates, up to an amount
                  equal to and in the following order: (a) the Accrued
                  Certificate Interest thereon for such Distribution Date, (b)
                  any Accrued Certificate Interest thereon remaining
                  undistributed from previous Distribution Dates and (c) such
                  Class's Allocable Share for such Distribution Date, in each
                  case, to the extent of remaining Group 2 Available Funds.

                  (C) On each Distribution Date prior to the Group 2 Cross-Over
                  Date, an amount equal to any remaining Group 2 Available Funds
                  after the distributions in (a)(iii)(B) above will be
                  distributed 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, in each
                  case, to the extent of remaining Group 2 Available Funds.

                  (D) If, after distributions have been made pursuant to
                  priorities FIRST and SECOND of clause (a)(iii)(A) above on any
                  Distribution Date, the remaining Group 2 Available Funds is
                  less than the sum of the Group 2 Senior Optimal Principal
                  Amount, such

                                      -78-
<PAGE>

                  amount shall be reduced, and such remaining funds will be
                  distributed on the related Senior Certificates on the basis of
                  such reduced amount.

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

         (b) On the first Distribution Date, the Class I-X-2 Certificates will
be entitled to receive a distribution equal to five days of interest accrued on
the Current Principal Amount of the Class I- A-2 Certificates at the related
Pass-Through Rate of the Class I-A-2 Certificates;

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

         (d) No Accrued Certificate Interest will be payable with respect to any
Class of Certificates or Component of the Class I-X-2 Certificates after the
Distribution Date on which the Current Principal Amount or Notional Amount, as
applicable, of such Certificate or Component has been reduced to zero.

         (e) If on any Distribution Date the Group 1 or Group 2 Available Funds
for the Group 1 and Group 2 Senior Certificates, respectively, is less than the
Accrued Certificate Interest on such Senior Certificates for such Distribution
Date prior to reduction for Net Interest Shortfall and the interest portion of
Realized Losses, the shortfall will be allocated among the holders of each Class
of Senior Certificates in such Certificate Group in proportion to the respective
amounts of Accrued Certificate Interest that would have been allocated thereto
in the absence of such Net Interest Shortfall and/or Realized Losses for such
Distribution Date. In addition, the amount of any interest shortfalls will
constitute unpaid Accrued Certificate Interest and will be distributable to
holders of the Certificates of the related Classes entitled to such amounts on
subsequent Distribution Dates, to the extent of the applicable Available Funds
after current interest distributions as required herein. Any such amounts so
carried forward will not bear interest. Shortfalls in interest payments will not
be offset by a reduction in the servicing compensation of the Servicer, the
Master Servicer or otherwise, except to the extent of applicable Compensating
Interest Payments.

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

                                      -79-
<PAGE>

         Section 6.02 ALLOCATION OF LOSSES. (a) On or prior to each
Determination Date, the Master Servicer shall determine the amount of any
Realized Loss in respect of each Mortgage Loan that occurred during the
immediately preceding calendar month, based on information provided by the
related Servicer.

         (b) With respect to any Certificates on any Distribution 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;

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

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

                  seventh, to the Group 1 Senior Certificates (other than the
         Class I-X-1 Certificates and Class I-X-2 Certificates), on a pro rata
         basis.

         (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;

                                      -80-
<PAGE>

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

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

                  eighth, to the Group 2 Senior Certificates (other than the
         Class II-X-1 Certificates), on a pro rata basis.

         (d) Notwithstanding the foregoing clauses (b) and (c), 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").

         (e) Notwithstanding the foregoing clauses (b) and (c), any Special
Hazard Loss allocable to the Group 1 Senior Certificates or Group 2 Senior
Certificates pursuant to clauses (b) or (c) above after the Group 1 Cross-Over
Date or Group 2 Cross-Over Date, respectively, shall be allocated to such Senior
Certificates and the most subordinate Class or Classes of Group 2 Subordinate
Certificates and Group 1 Subordinate Certificates, respectively, on a pro rata
basis, based on the Current Principal Amounts of such Certificates, in reduction
of the Current Principal Amounts thereof until reduced to zero, with any such
loss allocable to such Subordinate Certificates allocated in the order described
in clause (b) or (c) above, as applicable.

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

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

         (f) On each Distribution Date, the Securities Administrator shall
determine and notify the Trustee of the Group 1 and Group 2 Subordinate
Certificate Writedown Amount and the Senior Mezzanine Certificate Writedown
Amount. Any such Group 1 Subordinate Certificate Writedown Amount, Group 2
Subordinate Certificate Writedown Amount or Senior Mezzanine Certificate
Writedown Amount shall effect a corresponding reduction in the 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, (ii) 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 then the Current
Principal Amount of the Senior Mezzanine Certificates, (iii) from and after the
Group 1 Cross-Over Date, the Group 1 Senior Certificates (other than the Class
I-X-1 Certificates and Class I-X-2 Certificates) which reduction

                                      -81-
<PAGE>

shall occur on such Distribution Date after giving effect to distributions made
on such Distribution Date and (iv) from and after the Group 2 Cross-Over Date,
the Group 2 Senior Certificates (other than the Class II-X-1 Certificates) which
reduction shall occur on such Distribution Date after giving effect to
distributions made on such Distribution Date.

         (g) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall for such Distribution Date. The interest portion of any
Realized Losses with respect to the Group 1 Mortgage Loans or Group 2 Mortgage
Loans occurring on or prior to the Group 1 Cross-Over Date or Group 2 Cross-Over
Date, respectively, will not be allocated among any Certificates, but will
reduce the amount of Group 1 Available Funds or Group 2 Available Funds,
respectively, on the related Distribution Date. As a result of the subordination
of the Group 1 Subordinate Certificates in right of distribution, such Realized
Losses on the Group 1 Mortgage Loans will be allocated sequentially to the Group
1 Subordinate Certificates in the following order, to the Class I-B-6, Class
I-B-5, Class I-B-4, Class I-B-3, Class I-B-2 and Class I-B-1 Certificates. As a
result of the subordination of the Senior Mezzanine Certificates and Group 2
Subordinate Certificates in right of distribution, such Realized Losses on the
Group 2 Mortgage Loans will allocated sequentially to the Senior Mezzanine
Certificates and Group 2 Subordinate Certificates in the following order, to the
Class I-B-6, Class I-B-5, Class I-B-4, Class I-B-3, Class I-B-2, Class I-B-1 and
Class II-A-3 Certificates. Following the Group 1 Cross- Over Date, the interest
portion of Realized Losses on the Group 1 Mortgage Loans will be allocated to
the Group 1 Senior Certificates. 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.

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

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

                                      -82-
<PAGE>

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

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

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

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

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

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

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

                  (vii) the Current Principal Amount 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 Servicer
         or the Master Servicer included in such distribution separately stated
         for each Loan Group;

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

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

                                      -83-

<PAGE>

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

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

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

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

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

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

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

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

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

                  (xx) any Diverted Amount for such Distribution Date.

         The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities

                                      -84-
<PAGE>

Administrator by the Servicer and the Trustee. The Securities Administrator may
conclusively rely on such information and shall not be required to confirm,
verify or recalculate any such information.

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

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

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

                                      -85-
<PAGE>

         Section 6.06 COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the lesser of (i) the sum
of the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to subclauses (a) and (b) of the definition of
Interest Shortfall with respect to the Mortgage Loans for the related
Distribution Date, and not so paid by the related Servicers and (ii) the Master
Servicing Compensation for such Distribution Date (such amount, the
"Compensating Interest Payment"). The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest Payment.

                                      -86-
<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.

         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.

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

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

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

                                      -87-
<PAGE>

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

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

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

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

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

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

                                      -88-
<PAGE>

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

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

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

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

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

                                      -89-
<PAGE>

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

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

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

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

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

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

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

         Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; provided, however, that EMC shall have the right to
either (a) immediately assume the duties of the Master Servicer or (b) select a
successor Master Servicer; provided further, however, that the Trustee shall
have no obligation whatsoever with respect to any liability (other than advances
deemed recoverable and not previously made) incurred by the Master Servicer at
or prior to the time of termination. As compensation therefor, but subject to
Section 7.06, the Trustee shall be entitled to all funds relating to the
Mortgage Loans which the Master Servicer would have been entitled to retain if
the Master Servicer had continued to act hereunder, except for those amounts due
the Master Servicer as reimbursement permitted under this Agreement for advances
previously made or expenses previously incurred. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act, appoint or petition a

                                      -92-
<PAGE>

court of competent jurisdiction to appoint, any established housing and home
finance institution which is a Fannie Mae- or Freddie Mac-approved servicer, and
with respect to a successor to the Master Servicer only, having a net worth of
not less than $10,000,000, as the successor to the Master Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Master Servicer hereunder; provided, that the Trustee shall obtain a
letter from each Rating Agency that the ratings, if any, on each of the
Certificates will not be lowered as a result of the selection of the successor
to the Master Servicer. Pending appointment of a successor to the Master
Servicer hereunder, the Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
the Mortgage Loans as it and such successor shall agree; provided, however, that
the provisions of Section 7.06 shall apply, no such compensation shall be in
excess of that permitted the Trustee under this Subsection 8.02(a), and that
such successor shall undertake and assume the obligations of the Trustee to pay
compensation to any third Person acting as an agent or independent contractor in
the performance of master servicing responsibilities hereunder. The Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.

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

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

         Section 8.04 WAIVER OF DEFAULTS. The Trustee shall transmit by mail to
all Certificateholders, within 60 days after the occurrence of any Event of
Default known to the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund may, on behalf of all Certificateholders,
waive any default by the Master Servicer in the performance of its obligations
hereunder and the consequences thereof, except a default in the making of or the
causing to be made any required distribution on the Certificates. Upon any such
waiver of a past default, such default shall be deemed to cease to exist, and
any Event of Default arising therefrom shall be deemed to have been timely
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived. The Trustee shall give notice of any such waiver to
the Rating Agencies.

                                      -93-
<PAGE>

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

                                      -94-
<PAGE>

                                   ARTICLE IX

                                 Indemnification

         Section 9.01 INDEMNIFICATION OF THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR. (a) 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.

         (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.

                                      -95-
<PAGE>

                                    ARTICLE X

             Concerning the Trustee and the Securities Administrator

         Section 10.01 DUTIES OF TRUSTEE. (a) The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiver of all Events
of Default which may have occurred, and the Securities Administrator each
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement as duties of the Trustee and the Securities
Administrator, respectively. If an Event of Default has occurred and has not
been cured or waived, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and subject to Section 8.02(b) use the same
degree of care and skill in their exercise, as a prudent person would exercise
under the circumstances in the conduct of his own affairs.

         (b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee and the Securities Administrator
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator, respectively, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that neither the Trustee
nor the Securities Administrator shall be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by each Servicer or the Master Servicer;
provided, further, that neither the Trustee nor the Securities Administrator
shall be responsible for the accuracy or verification of any calculation
provided to it pursuant to this Agreement.

         (c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.01 and 11.01 herein based the
report of the Securities Administrator. In addition, the Trustee shall
immediately notify the Master Servicer if, on any Servicer Remittance Date, the
applicable Servicer fails to remit to the Trustee the funds required to be
remitted by such Servicer under the related Servicing Agreement.

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

                  (i) Prior to the occurrence of an Event of Default, and after
         the curing or waiver of all such Events of Default which may have
         occurred, the duties and obligations of the Trustee and the Securities
         Administrator shall be determined solely by the express provisions of
         this Agreement, neither the Trustee nor the Securities Administrator
         shall be liable except for the performance of their respective duties
         and obligations as are specifically set forth in this Agreement, no
         implied covenants or obligations shall be read into this Agreement
         against the Trustee or the Securities Administrator and, in the absence
         of bad faith on the part of the Trustee or the Securities
         Administrator, respectively, the Trustee or the Securities
         Administrator, respectively, may conclusively rely, as to the truth of
         the statements and the correctness of the opinions expressed therein,
         upon any certificates or opinions furnished to the Trustee or the
         Securities Administrator, respectively, and conforming to the
         requirements of this Agreement;

                                      -96-
<PAGE>

                  (ii) Neither the Trustee nor the Securities Administrator
         shall be liable in its individual capacity for an error of judgment
         made in good faith by a Responsible Officer or Responsible Officers of
         the Trustee or an officer of the Securities Administrator,
         respectively, unless it shall be proved that the Trustee or the
         Securities Administrator, respectively, was negligent in ascertaining
         the pertinent facts;

                  (iii) Neither the Trustee nor the Securities Administrator
         shall be liable with respect to any action taken, suffered or omitted
         to be taken by it in good faith in accordance with the directions of
         the Holders of Certificates evidencing Fractional Undivided Interests
         aggregating not less than 25% of the Trust Fund, if such action or
         non-action relates to the time, method and place of conducting any
         proceeding for any remedy available to the Trustee or the Securities
         Administrator, respectively, or exercising any trust or other power
         conferred upon the Trustee or the Securities Administrator,
         respectively, under this Agreement;

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

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

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

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

         Neither the Trustee nor the Securities Administrator shall be required
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of each Servicer under the applicable Servicing Agreement or the
Master Servicer under the 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.

                                      -97-
<PAGE>

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

         (f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.

         Section 10.02     CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE
SECURITIES ADMINISTRATOR. Except as otherwise provided in Section 9.01:

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

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

                  (iii) Neither the Trustee nor the Securities Administrator
         shall be under any obligation to exercise any of the trusts or powers
         vested in it by this Agreement, other than its obligation to give
         notices pursuant to this Agreement, or to institute, conduct or defend
         any litigation hereunder or in relation hereto at the request, order or
         direction of any of the Certificateholders pursuant to the provisions
         of this Agreement, unless such Certificateholders shall have offered to
         the Trustee reasonable security or indemnity against the costs,
         expenses and liabilities which may be incurred therein or thereby.
         Nothing contained herein shall, however, relieve the Trustee of the
         obligation, upon the occurrence of an Event of Default of which a
         Responsible Officer of the Trustee's Corporate Trust Office has actual
         knowledge (which has not been cured or waived), subject to Section
         8.02(b), to exercise such of the rights and powers vested in it by this
         Agreement, and to use the same degree of care and skill in their
         exercise, as a prudent person would exercise under the circumstances in
         the conduct of his own affairs;

                  (iv) Prior to the occurrence of an Event of Default hereunder
         and after the curing or waiver of all Events of Default which may have
         occurred, neither the Trustee nor the Securities Administrator shall be
         liable in its individual capacity for any action taken, suffered or
         omitted by it in good faith and believed by it to be authorized or
         within the discretion or rights or powers conferred upon it by this
         Agreement;

                  (v) Neither the Trustee nor the Securities Administrator shall
         be bound to make any investigation into the facts or matters stated in
         any resolution, certificate, statement,

                                      -98-
<PAGE>

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

                  (vi) The Trustee and the Securities Administrator may execute
         any of the trusts or powers hereunder or perform any duties hereunder
         either directly or through Affiliates, agents or attorneys; provided,
         however, that the Trustee may not appoint any agent to perform its
         custodial functions with respect to the Mortgage Files or paying agent
         functions under this Agreement without the express written consent of
         EMC, which consent will not be unreasonably withheld. Neither the
         Trustee nor the Securities Administrator shall be liable or responsible
         for the misconduct or negligence of any of the Trustee's or the
         Securities Administrator's agents or attorneys or a custodian or paying
         agent appointed hereunder by the Trustee or the Securities
         Administrator with due care and, when required, with the consent of the
         EMC;

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

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

                  (ix) Neither the Trustee nor the Securities Administrator
         shall be required to give any bond or surety with respect to the
         execution of the trust created hereby or the powers granted hereunder,
         except as provided in Subsection 10.07; and

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

                                      -99-
<PAGE>

         Section 10.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR MORTGAGE LOANS. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Seller, and neither
the Trustee nor the Securities Administrator shall have any responsibility for
their correctness. Neither the Trustee nor the Securities Administrator makes
any representation as to the validity or sufficiency of the Certificates (other
than the signature and countersignature of the Trustee on the Certificates) or
of any Mortgage Loan except as expressly provided in Sections 2.02 and 2.05
hereof; provided, however, that the foregoing shall not relieve the Trustee of
the obligation to review the Mortgage Files pursuant to Sections 2.02 and 2.04.
The Trustee's signature and countersignature (or countersignature of its agent)
on the Certificates shall be solely in its capacity as Trustee and shall not
constitute the Certificates an obligation of the Trustee in any other capacity.
Neither the Trustee nor the Securities Administrator shall be accountable for
the use or application by the Seller of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Seller with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement
other than any continuation statements filed by the Trustee pursuant to Section
3.07.

         Section 10.04 TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN
CERTIFICATES. The Trustee and the Securities Administrator in its individual
capacity or in any capacity other than as Trustee hereunder may become the owner
or pledgee of any Certificates with the same rights it would have if it were not
Trustee or the Securities Administrator, as applicable, and may otherwise deal
with the parties hereto.

         Section 10.05 TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND
EXPENSES. The fees of the Trustee and the Securities Administrator shall be paid
in accordance with a side letter agreement. In addition, the Trustee and the
Securities Administrator will be entitled to recover from the Master Servicer
Collection Account pursuant to Section 4.03 all reasonable out-of-pocket
expenses, disbursements and advances and the expenses of the Trustee and the
Securities Administrator, respectively, in connection with any Event of Default,
any breach of this Agreement or any claim or legal action (including any pending
or threatened claim or legal action) incurred or made by the Trustee or the
Securities Administrator, respectively, in the administration of the trusts
hereunder (including the reasonable compensation, expenses and disbursements of
its counsel) except any such expense, disbursement or advance as may arise from
its negligence or intentional misconduct or which is the responsibility of the
Certificateholders or the Trust Fund hereunder. If funds in the Master Servicer
Collection Account are insufficient therefor, the Trustee and the Securities

                                     -100-
<PAGE>

Administrator shall recover such expenses from the Seller. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.

         Section 10.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
ADMINISTRATOR. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by Fitch with respect to their long-term
rating and rated "BBB" or higher by Standard & Poor's and "Baa2" or higher by
Moody's with respect to any outstanding long-term unsecured unsubordinated debt,
and, in the case of a successor Trustee or successor Securities Administrator
other than pursuant to Section 10.10, rated in one of the two highest long-term
debt categories of, or otherwise acceptable to, each of the Rating Agencies. If
the Trustee publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 10.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital and
surplus) as set forth in its most recent report of condition so published. In
case at any time the Trustee or the Securities Administrator shall cease to be
eligible in accordance with the provisions of this Section 10.06, the Trustee or
the Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 10.08.

         Section 10.07 INSURANCE. The Trustee and the Securities Administrator,
at their own expense, shall at all times maintain and keep in full force and
effect: (i) fidelity insurance, (ii) theft of documents insurance and (iii)
forgery insurance (which may be collectively satisfied by a "Financial
Institution Bond" and/or a "Bankers' Blanket Bond"). All such insurance shall be
in amounts, with standard coverage and subject to deductibles, as are customary
for insurance typically maintained by banks or their affiliates which act as
custodians for investor-owned mortgage pools. A certificate of an officer of the
Trustee or the Securities Administrator as to the Trustee's or the Securities
Administrator's, respectively, compliance with this Section 10.07 shall be
furnished to any Certificateholder upon reasonable written request.

         Section 10.08 RESIGNATION AND REMOVAL OF THE TRUSTEE AND SECURITIES
ADMINISTRATOR. (a) The Trustee and the Securities Administrator may at any time
resign and be discharged from the Trust hereby created by giving written notice
thereof to the Seller, the Master Servicer and the Servicers, with a copy to the
Rating Agencies. Upon receiving such notice of resignation, the Seller shall
promptly appoint a successor Trustee or successor Securities Administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee or Securities Administrator,
as applicable, the successor Trustee or Securities Administrator, as applicable.
If no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator.

                                     -101-
<PAGE>

         (b) If at any time the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 10.06 and
shall fail to resign after written request therefor by the Seller or if at any
time the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or the Securities Administrator, as applicable, or of its property shall
be appointed, or any public officer shall take charge or control of the Trustee
or the Securities Administrator, as applicable, or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation, or in the event
of a Termination Event by the Auction Administrator under the Market Value Swap,
then the Seller shall promptly remove the Trustee, or shall be entitled to
remove the Securities Administrator, as applicable, and appoint a successor
Trustee or Securities Administrator, as applicable, by written instrument, in
triplicate, one copy of which instrument shall be delivered to each of the
Trustee or Securities Administrator, as applicable, so removed, the successor
Trustee or Securities Administrator, as applicable.

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

         (d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 10.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 10.09.

         (e) No resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 10.08 shall
become effective except upon the simultaneous appointment of and acceptance of a
successor Auction Administrator as provided in Section 12.03.

         Section 10.09 SUCCESSOR TRUSTEE AND SUCCESSOR SECURITIES ADMINISTRATOR.
(a) Any successor Trustee or Securities Administrator appointed as provided in
Section 10.08 shall execute, acknowledge and deliver to the Seller and to its
predecessor Trustee or Securities Administrator an instrument accepting such
appointment hereunder. The resignation or removal of the predecessor Trustee or
Securities Administrator shall then become effective and such successor Trustee
or Securities Administrator, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee or
Securities Administrator herein. The predecessor Trustee or Securities
Administrator shall after payment of its outstanding fees and expenses promptly
deliver to the successor Trustee or Securities Administrator, as applicable, all
assets and records of the Trust held by it hereunder, and the Seller and the
predecessor Trustee or Securities Administrator, as applicable, shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
Trustee or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.

                                     -102-
<PAGE>

         (b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 10.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 10.06.

         (c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 10.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator hereunder to all Certificateholders at their addresses
as shown in the Certificate Register and to the Rating Agencies. EMC shall pay
the cost of any mailing by the successor Trustee or Securities Administrator.

         Section 10.10 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 10.06.
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 10.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the Seller
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
and the Seller to act as cotrustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity, such title to the Trust, or
any part thereof, and, subject to the other provisions of this Section 10.11,
such powers, duties, obligations, rights and trusts as the Seller and the
Trustee may consider necessary or desirable.

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

         (c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 10.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 10.08
hereof.

         (d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 10.11, 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

                                     -103-
<PAGE>

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

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

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

         (g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Seller and the Trustee acting jointly may at any time accept the resignation of
or remove any separate trustee or co-trustee.

         Section 10.12 FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS; REMIC ADMINISTRATION. (a) For federal income tax purposes,
the taxable year of each of REMIC I, REMIC II and REMIC III shall be a calendar
year and the Securities Administrator shall maintain or cause the maintenance of
the books of each such REMIC on the accrual method of accounting.

         (b) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Federal tax
information returns or elections required to be made hereunder with respect to
each of REMIC I, REMIC II and REMIC III, the Trust Fund, if applicable, and the
Certificates containing such information and at the times and in the manner as
may be required by the Code or applicable Treasury regulations, and shall
furnish to each Holder of Certificates at any time during the calendar year for
which such returns or reports are made such statements or information at the
times and in the manner as may be required thereby, including, without
limitation, reports relating to interest, original issue discount and market
discount or premium (using a constant prepayment assumption of 25% CPR). The
Securities Administrator will apply for an Employee Identification Number from
the IRS under Form SS-4 or any other acceptable method for all tax entities. In
connection with the foregoing, the Securities Administrator shall timely prepare
and file, and the Trustee shall sign, IRS Form 8811, which shall provide the
name and address of the person who can be contacted to obtain information
required to be reported to the

                                     -104-
<PAGE>

holders of regular interests in each of REMIC I, REMIC II and REMIC III (the
"REMIC Reporting Agent"). The Trustee shall make elections to treat each of
REMIC I, REMIC II and REMIC III as a REMIC (which elections shall apply to the
taxable period ending December 31, 2002 and each calendar year thereafter) in
such manner as the Code or applicable Treasury regulations may prescribe, and as
described by the Securities Administrator. The Trustee shall sign all tax
information returns filed pursuant to this Section and any other returns as may
be required by the Code. The Holder of the Class R-I Certificate is hereby
designated as the "Tax Matters Person" (within the meaning of Treas. Reg.
ss.ss.1.860F-4(d)) for REMIC I, the Holder of the Class R-II Certificate is
hereby designated as the "Tax Matters Person" for REMIC II and the Holder of the
Class R-III Certificate is hereby designated as the "Tax Matters Person" for
REMIC III. The Securities Administrator is hereby designated and appointed as
the agent of each such Tax Matters Person. Any Holder of a Residual Certificate
will by acceptance thereof appoint the Securities Administrator as agent and
attorney-in-fact for the purpose of acting as Tax Matters Person for each of
REMIC I, REMIC II and REMIC III during such time as the Securities Administrator
does not own any such Residual Certificate. In the event that the Code or
applicable Treasury regulations prohibit the Trustee from signing tax or
information returns or other statements, or the Securities Administrator from
acting as agent for the Tax Matters Person, the Trustee and the Securities
Administrator shall take whatever action that in its sole good faith judgment is
necessary for the proper filing of such information returns or for the provision
of a tax matters person, including designation of the Holder of a Residual
Certificate to sign such returns or act as tax matters person. Each Holder of a
Residual Certificate shall be bound by this Section.

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

         (d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, any state income tax returns required under
Applicable State Law with respect to each of REMIC I, REMIC II and REMIC III or
the Trust Fund.

         (e) Notwithstanding any other provision of this Agreement, the Trustee
and the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.

                                     -105-
<PAGE>

         (f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Seller for any taxes and costs including, without limitation,
any reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Seller or the Master Servicer, as a result of a breach of the Trustee's
covenants and the Securities Administrator's covenants, respectively, set forth
in this Section 10.12; provided, however, such liability and obligation to
indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.

                                     -106-
<PAGE>

                                   ARTICLE XI

                                   Termination

         Section 11.01 Termination Upon Repurchase by the Seller or its Designee
or Liquidation of the Mortgage Loans.

         (a) Subject to Section 11.03, the respective obligations and
responsibilities of the Seller, the Trustee, the Master Servicer and the
Securities Administrator created hereby, other than the obligation of the
Trustee to make payments to Certificateholders as hereinafter set forth shall
terminate upon:

                  (i) the repurchase by or at the direction of the Seller or its
         designee of all Group 1 Mortgage Loans and all related REO Property or
         the repurchase by or at the direction of the Seller or its designee of
         all Group 2 Mortgage Loans and all related REO Property remaining in
         the Trust at a price equal to (a) 100% of the Outstanding Principal
         Balance of each Mortgage Loan (other than a Mortgage Loan related to
         REO Property) as of the date of repurchase, net of the principal
         portion of any unreimbursed Monthly Advances made by the purchaser,
         together with interest at the applicable Mortgage Interest Rate accrued
         but unpaid to, but not including, the first day of the month of
         repurchase, plus (b) the appraised value of any related REO Property,
         less the good faith estimate of the Seller of liquidation expenses to
         be incurred in connection with its disposal thereof (but not more than
         the Outstanding Principal Balance of the related Mortgage Loan,
         together with interest at the applicable Mortgage Interest Rate accrued
         on that balance but unpaid to, but not including, the first day of the
         month of repurchase), such appraisal to be calculated by an appraiser
         mutually agreed upon by the Seller and the Trustee at the expense of
         the Seller; or

                  (ii) the later of the making of the final payment or other
         liquidation, or any advance with respect thereto, of the last Group 1
         or Group 2 Mortgage Loan, as applicable, remaining in the Trust Fund or
         the disposition of all property acquired with respect to any Group 1 or
         Group 2 Mortgage Loan; provided, however, that in the event that an
         advance has been made, but not yet recovered, at the time of such
         termination, the Person having made such advance shall be entitled to
         receive, notwithstanding such termination, any payments received
         subsequent thereto with respect to which such advance was made; or

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

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

         (c) (i) The right of the Seller or its designee to repurchase all the
assets of the Trust Fund relating to the Group 1 Mortgage Loans described in
Subsection 11.01(a)(i) above is conditioned upon the date of such purchase
occurring on or after the Group 1 Optional Termination Date. The Seller or its
designee may repurchase all the assets of the Trust Fund relating to the Group 1

                                     -107-
<PAGE>

Mortgage Loans if the Seller, based upon an Opinion of Counsel, has determined
that the REMIC status of the REMIC I has been lost or that a substantial risk
exists that such REMIC status will be lost for the then-current taxable year.
(ii) The right of the Seller or its designee to repurchase all the assets of the
Trust Fund relating to the Group 2 Mortgage Loans described in Subsection
11.01(a)(i) above is conditioned upon the date of such purchase occurring on or
after the Group 2 Optional Termination Date. The Seller or its designee may
repurchase all the assets of the Trust Fund relating to the Group 2 Mortgage
Loans if the Seller, based upon an Opinion of Counsel, has determined that the
REMIC status of the REMIC II has been lost or that a substantial risk exists
that such REMIC status will be lost for the then-current taxable year. (iii) At
any time thereafter, in the case of a repurchase as described in this Subsection
11.01(c), the Seller may elect to terminate REMIC I, REMIC II and REMIC III at
any time, and upon such election, the Seller or its designee, shall repurchase
all the assets of the Trust Fund described in Subsection 11.01(a)(i) above.

         (d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders shall
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed not
earlier than the l5th day and not later than the 25th day of the month next
preceding the month of such final distribution, and shall specify (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of the Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Trustee therein specified.

         (e) If the option of the Seller to repurchase or cause the repurchase
of all the assets in the Trust Fund for a related Mortgage Loan Group as
described Subsection 11.01(a)(i) above is exercised, the Seller and/or its
designee shall deliver to the Trustee for deposit in the Distribution Account,
by the Business Day prior to the applicable Distribution Date, an amount equal
to the repurchase price for the Mortgage Loans being purchased by it and all
property acquired with respect to such Mortgage Loans remaining in REMIC I or
REMIC II, as applicable. Upon presentation and surrender of the Certificates by
the Certificateholders, the Trustee shall distribute to the Certificateholders
an amount determined as follows: with respect to each Certificate (other than
the Class R Certificates), the outstanding Current Principal Amount, plus with
respect to each Certificate (other than the Class R Certificates), one month's
interest thereon at the applicable Pass-Through Rate; and with respect to the
Class R Certificates, the percentage interest evidenced thereby multiplied by
the difference, if any, between the above described repurchase price and the
aggregate amount to be distributed to the Holders of the Certificates (other
than the Class R Certificates). If the proceeds with respect to the Group 1
Mortgage Loans are not sufficient to pay all of the Group 1 Certificates in
full, any such deficiency will be allocated first, to the Group 1 Subordinate
Certificates, in inverse order of their numerical designation, and then to the
Group 1 Senior Certificates. If the proceeds with respect to the Group 2
Mortgage Loans are not sufficient to pay all of the Group 2 Certificates in
full, any such deficiency will be allocated first, to the Subordinate
Certificates, in inverse order of their numerical designation, second to the
Senior Mezzanine Certificates, and then to the Group 2 Senior Certificates. If
the proceeds with respect to the Group 2 Mortgage Loans are not sufficient to
pay all of the Group 2 Certificates in full, any such deficiency will be
allocated first, to the Group 2 Subordinate Certificates, in inverse order of
their numerical

                                     -108-
<PAGE>

designation, and then to the Group 2 Senior Certificates on a pro rata basis.
Upon deposit of the required repurchase price and following such final
Distribution Date, the Trustee shall release promptly to the Seller and/or its
designee the Mortgage Files for the remaining applicable Mortgage Loans, and the
Accounts with respect thereto shall terminate, subject to the Trustee's
obligation to hold any amounts payable to Certificateholders in trust without
interest pending final distributions pursuant to Subsection 11.01(g). Any other
amounts remaining in the Accounts will belong to the Seller. Upon deposit of the
required repurchase price and following such final Distribution Date, the
Trustee shall release promptly to the Seller and/or its designee, as the case
may be, the Mortgage Files for the remaining Mortgage Loans, and the Accounts
with respect thereto shall terminate, subject to the Trustee's obligation to
hold any amounts payable to Certificateholders in trust without interest pending
final distributions pursuant to Subsection 11.01(g).

         (f) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Subsection 11.01(a)(ii) above,
the Master Servicer shall deliver to the Trustee for deposit in the Distribution
Account all distributable amounts remaining in the Master Servicer Collection
Account. Upon the presentation and surrender of the Certificates, the Trustee
shall distribute to the remaining Certificateholders, in accordance with their
respective interests, all distributable amounts remaining in the Distribution
Account. Upon deposit by the Master Servicer of such distributable amounts, and
following such final Distribution Date, the Trustee shall release promptly to
the Seller or its designee the Mortgage Files for the remaining Mortgage Loans,
and the Master Servicer Collection Account and the Distribution Account shall
terminate, subject to the Trustee's obligation to hold any amounts payable to
the Certificateholders in trust without interest pending final distributions
pursuant to this Subsection 11.01(g).

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

         Section 11.02 Additional Termination Requirements. (a) If the option of
the Seller to repurchase (i) all the Group 1 Mortgage Loans, (ii) all of the
Group 2 Mortgage Loans or (iii) all of the Mortgage Loans under Subsection
11.01(a)(i) above is exercised, (i) REMIC I, (ii) REMIC II, or (iii) the Trust
Fund and each of REMIC I, REMIC II and REMIC III shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been furnished with an Opinion of Counsel to the effect that the failure of the
Trust to comply with the requirements of this Section 11.02 will not (i) result
in the imposition of taxes on "prohibited transactions" as defined in Section
860F of the Code on REMIC I, REMIC II or REMIC III or (ii) cause any REMIC to
fail to qualify as a REMIC at any time that any Regular Certificates are
outstanding:

                  (i) within 90 days prior to the final Distribution Date, at
         the written direction of the Seller, the Trustee, as agent for the
         respective Tax Matters Persons, shall adopt a plan of

                                     -109-
<PAGE>

         complete liquidation of REMIC I, REMIC II and REMIC III in the case of
         a termination under Subsection 11.01(a)(i), or a plan of complete
         liquidation of REMIC I in the case of a termination under Subsection
         11.01(c)(i), or a plan of complete liquidation of REMIC II in the case
         of a termination under Subsection 11.01(c)(ii), provided to it by the
         Seller meeting the requirements of a "qualified liquidation" under
         Section 860F of the Code and any regulations thereunder.

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

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

         (b) By their acceptance of the Residual Certificates, the Holders
thereof hereby (i) agree to adopt such a plan of complete liquidation of the
related REMIC upon the written request of the Seller, and to take such action in
connection therewith as may be reasonably requested by the Seller and (ii)
appoint the Seller as their attorney-in-fact, with full power of substitution,
for purposes of adopting such a plan of complete liquidation. The Trustee shall
adopt such plan of liquidation by filing the appropriate statement on the final
tax return of each REMIC, as applicable. Upon complete liquidation or final
distribution of all of the assets of the Trust Fund, the Trust Fund and each of
REMIC I, REMIC II and REMIC III shall terminate.

                                     -110-
<PAGE>

                                   ARTICLE XII

                          Mandatory Auction Provisions

         Section 12.01 THE MARKET VALUE SWAP. (a) On the Closing Date, the
Auction Administrator, as auction administrator and not as trustee, will enter
into the Market Value Swap with the Swap Counterparty. The Market Value Swap
will not be part of the Trust Fund or of REMIC I, REMIC II or REMIC III.

         (b) The Auction Administrator shall perform its obligations as
counterparty to the Market Value Swap. The Auction Administrator shall inform
the Trustee of any default by the Swap Counterparty of its obligations under the
Market Value Swap and the failure of the Swap Guarantor to honor the obligations
of the Swap Counterparty under the Swap Guarantee.

         (c) Upon receipt of the Par Price from the Mandatory Auction Winners
and the Swap Counterparty on the Mandatory Auction Distribution Date, the
Auction Administrator shall transfer such amounts to the holders of the
Mandatory Auction Certificates upon confirmation from the Trustee that the
Mandatory Auction Certificates have been transferred to the Mandatory Auction
Winners. The Holders of the Mandatory Auction Certificates (and not the
Mandatory Auction Winners) shall be entitled to any distributions pursuant to
Section 6.01 on the Mandatory Auction Distribution Date.

         Section 12.02 RIGHTS OF THE AUCTION ADMINISTRATOR. The Auction
Administrator shall have no rights against the Trustee, the Trust Fund, the
Securities Administrator, the Seller or the Master Servicer either for
indemnification or for any costs and expenses associated with its
responsibilities as Auction Administrator. The Auction Administrator shall be
compensated as separately agreed with the Swap Counterparty.

         Section 12.03 REMOVAL OF THE AUCTION ADMINISTRATOR. In the event of a
Termination Event for the Auction Administrator under the Market Value Swap, the
Seller shall select a new Auction Administrator and Trustee in accordance with
this Section 12.03 and Article IX. Any successor Auction Administrator shall
meet the requirements of a successor Trustee under this Agreement.

         Section 12.04 DUTIES OF THE TRUSTEE WITH RESPECT TO THE MANDATORY
AUCTION. On the Distribution Date prior to the Mandatory Auction Distribution
Date, the Trustee shall notify the Holders of the Mandatory Auction Certificates
that they will be required to tender their Certificates on the Mandatory Auction
Distribution Date. On the Mandatory Auction Distribution Date, the Trustee shall
cause the Depository to transfer the ownership of the Mandatory Auction
Certificates to the Mandatory Auction Winners as informed by the Auction
Administrator. The Trustee shall not cause the transfer of the Mandatory Auction
Certificates if it has received notice from the Auction Administrator that the
Swap Counterparty is in default under the Market Value Swap and the Swap
Guarantor is in default under the Swap Guarantee. The Trustee shall not cause
the transfer of the Mandatory Auction Certificates until it has received
confirmation that the Auction Administrator has received the Par Price.

                                     -111-
<PAGE>

         Section 12.05 MANDATORY AUCTION CERTIFICATES. Except for the occurrence
of a Swap Termination Event, the Holder of each Mandatory Auction Certificate
hereby agrees to tender its Certificate to the Trustee on the Mandatory Auction
Distribution Date in exchange for the Par Price and acknowledges that the
Trustee shall cause the Depository to terminate their ownership interest at that
time.

                                     -112-
<PAGE>

                                  ARTICLE XIII

                            Miscellaneous Provisions

         Section 13.01 INTENT OF PARTIES. The parties intend that each of REMIC
I, REMIC II and REMIC III shall be treated as a REMIC for federal income tax
purposes and that the provisions of this Agreement should be construed in
furtherance of this intent.

         Section 13.02 AMENDMENT. (a) This Agreement may be amended from time to
time by EMC, the Seller, the Master Servicer, the Securities Administrator and
the Trustee, and the Servicing Agreements may be amended from time to time by
EMC, the related Servicer, the Master Servicer and the Trustee, without notice
to or the consent of any of the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions herein or therein that may be defective or
inconsistent with any other provisions herein or therein, to comply with any
changes in the Code or to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action shall not, as
evidenced by an Opinion of Independent Counsel, addressed to the Trustee,
adversely affect in any material respect the interests of any Certificateholder
and provided, further, that the Amendment to Article XIII of this Agreement
shall also require the consent of the Auction Administrator.

         (b) This Agreement may also be amended from time to time by EMC, the
Master Servicer, the Seller, the Securities Administrator and the Trustee, and
the Servicing Agreements may also be amended from time to time by EMC, the
related Servicer, the Master Servicer and the Trustee, with the consent of the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund or of the applicable Class or Classes, if
such amendment affects only such Class or Classes, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) reduce the aforesaid
percentage of Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all Certificates then
outstanding, or (iii) cause REMIC I, REMIC II or REMIC III to fail to qualify as
a REMIC for federal income tax purposes, as evidenced by an Opinion of
Independent Counsel which shall be provided to the Trustee other than at the
Trustee's expense, and provided, further, that the Amendment to Article XIII of
this Agreement shall also require the consent of the Auction Administrator.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to Section 11.02(b), Certificates
registered in the name of or held for the benefit of the Seller, the Securities
Administrator, the Master Servicer or the Trustee or any Affiliate thereof shall
be entitled to vote their Fractional Undivided Interests with respect to matters
affecting such Certificates.

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

                                     -113-
<PAGE>

         (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.

         (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, the Master Servicer and the Securities Administrator
may, but shall not be obligated to, enter into any such amendment which affects
the Trustee's or the Securities Administrator's own respective rights, duties or
immunities under this Agreement.

         Section 13.03 RECORDATION OF AGREEMENT. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Seller shall
effect such recordation, at the expense of the Trust upon the request in writing
of a Certificateholder, but only if such direction is accompanied by an Opinion
of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.

         Section 13.04 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, the Securities Administrator 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,

                                     -114-
<PAGE>

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

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

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

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

         (e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator,

                                     -115-
<PAGE>

the Seller, the Master Servicer or any Affiliate thereof shall be disregarded,
except as otherwise provided in Section 11.02(b) and except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which the
Trustee knows to be so owned shall be so disregarded. Certificates which have
been pledged in good faith to the Trustee, the Securities Administrator, the
Seller, the Master Servicer or any Affiliate thereof may be regarded as
outstanding if the pledgor establishes to the satisfaction of the Trustee the
pledgor's right to act with respect to such Certificates and that the pledgor is
not an Affiliate of the Trustee, the Securities Administrator, the Seller, the
Master Servicer, as the case may be.

         Section 13.06 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 13.07 NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the Seller,
383 Madison Avenue, New York, New York 10179, Attention: Vice
President-Servicing, telecopier number: (212) 272-5591, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the EMC, 383 Madison Avenue, New York, New York 10179, Attention: Vice
President-Servicing, telecopier number: (212) 272-5591, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (iv) in
the case of the Securities Administrator, Wells Fargo Bank Minnesota, National
Association, P.O. Box 98, Columbia, Maryland 21046 (or, for overnight
deliveries, 9062 Old Annapolis Road, Columbia, Maryland 21045) in each case,
(Attention: BART 2002-12), facsimile no.: (410) 884-2360, or such other address
as may hereafter be furnished to the other parties hereto in writing; (v) in the
case of the Auction Administrator, at its Corporate Trust Office, or such other
address as may hereafter be furnished to the other parties in writing; or (vi)
in the case of the Rating Agencies, Moody's Investors Service, Inc., 99 Church
Street, New York, New York 10007, and Standard & Poor's, a division of the
McGraw-Hill Companies, Inc., 55 Water Street, 41st Floor, New York, New York,
10041, Attention: Residential Mortgage Surveillance. Any notice delivered to the
Seller, the Master Servicer, the Securities Administrator or the Trustee under
this Agreement shall be effective only upon receipt. Any notice required or
permitted to be mailed to a Certificateholder, unless otherwise provided herein,
shall be given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given when mailed, whether or not the Certificateholder receives
such notice.

                                     -116-
<PAGE>

         Section 13.08 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 13.09 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 13.10 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 13.11 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 13.12 NOTICE TO RATING AGENCIES. The article and section
headings herein are for convenience of reference only, and shall not limited or
otherwise affect the meaning hereof. The Trustee shall promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:

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

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

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

         4. The repurchase or substitution of Mortgage Loans;

         5. The final payment to Certificateholders; and

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

                                     -117-
<PAGE>

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

                                STRUCTURED ASSET MORTGAGE
                                INVESTMENTS INC., as Seller

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

                                BANK ONE, NATIONAL ASSOCIATION,
                                as Trustee

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

                                BANK ONE, NATIONAL ASSOCIATION,
                                as Auction Administrator

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

                                WELLS FARGO BANK MINNESOTA,
                                NATIONAL ASSOCIATION, as Master
                                Servicer

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

                                WELLS FARGO BANK MINNESOTA,
                                NATIONAL ASSOCIATION, as Securities
                                Administrator

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

<PAGE>

                                EMC MORTGAGE CORPORATION

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

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

EMC MORTGAGE CORPORATION

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

<PAGE>

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

         On the___ day of December, 2002 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
____________________ of Structured Asset Mortgage Investments Inc., the
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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

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

<PAGE>

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

         On the___ day of December, 2002 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
____________________ of Bank One, National Association, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

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

[Notarial Seal]

<PAGE>

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

         On the___ day of December, 2002 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
____________________ of Bank One, National Association, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

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

<PAGE>

STATE OF MARYLAND                   )
                                    ) ss.:
COUNTY OF                           )

         On the___ day of December, 2002 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
_______________________ of Wells Fargo Bank Minnesota, National Association, the
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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

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

<PAGE>

STATE OF MARYLAND                   )
                                    ) ss.:
COUNTY OF                           )

         On the__ day of December, 2002 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
_______________________ of Wells Fargo Bank Minnesota, National Association, the
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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

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

[Notarial Seal]

<PAGE>

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

         On the___ day of December, 2002 before me, a notary public in and for
said State, personally appeared ______________________, known to me to be a
____________________ of EMC Mortgage Corporation, the corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

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

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

[Notarial Seal]

<PAGE>

                                   EXHIBIT A-1

                    FORM OF CLASS [_-A-_][__-X-_] 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][NOTIONAL] AMOUNT OF THIS CERTIFICATE
WILL BE DECREASED BY THE PRINCIPAL PAYMENTS [HEREON][ON THE CLASS A-II-2
CERTIFICATES] AND REALIZED LOSSES ALLOCABLE [HERETO][THERETO]. ACCORDINGLY,
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
[PRINCIPAL][NOTIONAL] AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

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

                                       A-1

<PAGE>

<TABLE>
<CAPTION>

<S>                                                       <C>
Certificate No.1                                          [Variable][____%] Pass-Through Rate

Class [__-A-_][__-X-_] Senior

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

First Distribution Date:                                  Initial Current [Principal][Notional] Amount of
January 27, 2002                                          this Senior Certificate as of the Cut-off Date:
                                                          $[________________]

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

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

                         BEAR STEARNS ARM TRUST 2002-12
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2002-12

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

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

                  This certifies that ___________________ is the registered
owner of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") primarily consisting of conventional adjustable rate
mortgage loans secured by first liens on one- to four- family residential
properties (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments Inc. ("SAMI"). The

                                       A-2

<PAGE>

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

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

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
Initial Current [Principal][Notional] Amount of this Certificate is set forth
above. The Current [Principal][Notional] Amount hereof will be reduced to the
extent of distributions allocable to principal [hereon][on the Class A-II-2
Certificates] and any Realized Losses allocable [hereto][thereto].

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

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

                                       A-3

<PAGE>

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

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

                  The Agreement permits, with certain exceptions therein
provided; (i) the amendment thereof and the modification of the rights and
obligations of the Seller, the Master Servicer and the Trustee and the rights of
the Certificateholders under the Agreement from time to time by EMC, the Seller,
the Master Servicer, the Securities Administrator and the Trustee, and (ii) the
amendment of the Servicing Agreements by the Mater Servicer and the Trustee with
the consent of the Holders of Certificates, evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund (or in certain cases,
Holders of Certificates of affected Classes evidencing such percentage of the
Fractional Undivided Interests thereof). Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof and of the
Servicing Agreements in certain limited circumstances, without the consent of
the Holders of any of the Certificates.

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

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

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

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund

                                       A-4

<PAGE>

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-5

<PAGE>

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

Dated: December 30, 2002

                                   BANK ONE, NATIONAL ASSOCIATION
                                   Not in its individual
                                   capacity but solely as
                                   Trustee

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

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

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

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

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

                                       A-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

Dated:
                   -------------------------------------------------------------
                      Signature by or on behalf of assignor

                                            ------------------------------------
                                              Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

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

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

                                       A-7

<PAGE>

                                   EXHIBIT A-2

                        FORM OF CLASS [_-B-_] CERTIFICATE

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES [,][AND] [CLASS _- B-1 CERTIFICATES] [,][AND] [CLASS _-B-2
CERTIFICATES] [,][AND] [CLASS _-B-3 CERTIFICATES] [,][AND] [CLASS _- B-4
CERTIFICATES] [AND CLASS _-B-5 CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS
DEFINED BELOW).

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

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

                  [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

                                       A-1

<PAGE>

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.]

                  [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 WILL
BE REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT WILL
BE MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]

                                       A-2

<PAGE>

<TABLE>
<CAPTION>

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

Class [_-B-_] Subordinate

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

                                                         Initial Current Principal Amount of this
First Distribution Date:                                 Subordinate Certificate as of the Cut-off Date:
January 27, 2002                                         $[________________]

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

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

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2002-12

         evidencing a fractional undivided interest in the distributions
         allocable to the Class B-1 Certificates with respect to a Trust Fund
         consisting primarily of a pool of adjustable interest rate mortgage
         loans secured by first liens on one-to-four family residential
         properties sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.

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

                  This certifies that _________________ is the registered owner
of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") primarily consisting of conventional adjustable rate
mortgage loans secured by first liens on one- to four- family residential
properties (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to SAMI. Wells Fargo Bank

                                      A-2-3

<PAGE>

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

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

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

                  [No transfer of this Class [_-B-_] certificate will be made
unless such transfer is (i) exempt from the registration requirements of the
Securities act of 1933, as amended, and any applicable state securities laws or
is made in accordance with said Act and laws and (ii) made in accordance with
Section 5.02 of the Agreement. In the event that such transfer is to be made the
Trustee shall register such transfer if, (i) made to a transferee who has
provided the Trustee with evidence as to its QIB status; or (ii) (A) the
transferor has advised the Trustee in writing that the Certificate is being
transferred to an Institutional Accredited Investor and (B) prior to such
transfer the transferee furnishes to the Trustee an Investment Letter; provided
that if based upon an Opinion of Counsel to the effect that (A) and (B) above
are met sufficient to confirm that such transfer is

                                      A-2-4

<PAGE>

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.]

                  [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 twelve 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.

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

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

                  The Agreement permits, with certain exceptions therein
provided; (i) the amendment thereof and the modification of the rights and
obligations of the Seller, the Master Servicer and the Trustee and the rights of
the Certificateholders under the Agreement from time to time by EMC, the Seller,
the Master Servicer, the Securities Administrator and the Trustee, and (ii) the
amendment of the Servicing Agreements by the Mater Servicer and the Trustee with
the consent of the Holders of Certificates, evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund (or in certain cases,
Holders of Certificates of affected Classes evidencing such percentage of the
Fractional Undivided Interests thereof). Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof and of the

                                      A-2-5

<PAGE>

Servicing Agreements in certain limited circumstances, without the consent of
the Holders of any of the Certificates.

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

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

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

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

                  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: December 30, 2002

                                   BANK ONE, NATIONAL ASSOCIATION
                                   Not in its individual
                                   capacity but solely as
                                   Trustee

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

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

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

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

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

                                      A-2-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

Dated:
                   -------------------------------------------------------------
                      Signature by or on behalf of assignor

                                            ------------------------------------
                                              Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

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

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

                                      A-2-8

<PAGE>

                                   EXHIBIT A-3

                         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: (1) WILL NOT
RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION AND IS PERMISSIBLE
UNDER APPLICABLE LAW AND (2) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER SERVICER OR THE TRUSTEE, WHICH
MUST BE EVIDENCED BY 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 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

                                      A-3-1

<PAGE>

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

                                      A-3-2

<PAGE>

<TABLE>
<CAPTION>

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

Class R-[_] Senior

Date of Pooling and Servicing Agreement and               Aggregate Initial Current Principal Amount of
Cut-off Date: December 1, 2002                            this Certificate as of the Cut-off Date:
                                                          $[50.00][100.00]

First Distribution Date:                                  Initial Current Principal Amount of this
January 27, 2002                                          Certificate as of the Cut-off Date:
                                                          $[50.00][100.00]

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

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

                         BEAR STEARNS ARM TRUST 2002-12
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2002-12

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

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

                  This certifies that ______________________________ is the
registered owner of the Fractional Undivided Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund") primarily consisting of conventional
adjustable rate mortgages loans secured by first liens on one- to four- family
residential properties (collectively, the "Mortgage Loans") sold by Structured
Asset Mortgage Investments Inc. ("SAMI").

                                      A-3-3

<PAGE>

The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI. Wells
Fargo Bank Minnesota, National Association ("Wells Fargo") will act as master
servicer of the Mortgage Loans (the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement'), among SAMI, as seller (the "Seller"),
Wells Fargo Bank Minnesota, National Association as master servicer and
securities administrator, EMC Mortgage Corporation and Bank One, National
Association, as trustee (the "Trustee") and auction administrator, 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 Distribution Date in the
month immediately following the month of the latest scheduled maturity date of
any Mortgage Loan and is not likely to be the date on which the Current
Principal Amount of this Class of Certificates will be reduced to zero.

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

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then

                                      A-3-4

<PAGE>

the Seller will have the right, in its sole discretion and without notice to the
Holder of this Certificate, to sell this Certificate to a purchaser selected by
the Company, which purchaser may be the Seller, or any affiliate of the Seller,
on such terms and conditions as the Seller may choose.

                  This certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to title I of the employee 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: (1) will not
result in or constitute a nonexempt prohibited transaction and is permissible
under applicable law and (2) will not give rise to any additional fiduciary
obligations on the part of the seller, the master servicer or the trustee, which
must be evidenced by an opinion of counsel to such effect by or on behalf of an
institutional accredited investor.

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

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

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

                  The Agreement permits, with certain exceptions therein
provided; (i) the amendment thereof and the modification of the rights and
obligations of the Seller, the Master Servicer and the Trustee and the rights of
the Certificateholders under the Agreement from time to time by EMC, the Seller,
the Master Servicer, the Securities Administrator and the Trustee, and (ii) the
amendment of the Servicing Agreements by the Mater Servicer and the Trustee with
the consent of the Holders of Certificates, evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund (or in certain cases,
Holders of Certificates of affected Classes evidencing such percentage of the
Fractional Undivided Interests thereof). Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof and of the
Servicing Agreements in certain limited circumstances, without the consent of
the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee

                                      A-3-5

<PAGE>

duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Fractional Undivided Interest will be issued to
the designated transferee.

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

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

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

                  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: December 30, 2002

                                   BANK ONE, NATIONAL ASSOCIATION
                                   Not in its individual
                                   capacity but solely as
                                   Trustee

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

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

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

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

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

                                      A-3-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

Dated:
                   -------------------------------------------------------------
                      Signature by or on behalf of assignor

                                            ------------------------------------
                                              Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

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

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

<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                             [PROVIDED UPON REQUEST]

<PAGE>

                                    EXHIBIT C

                                   [RESERVED]

                                       C-1

<PAGE>

                                    EXHIBIT D
                        REQUEST FOR RELEASE OF DOCUMENTS

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

RE:      Pooling and Servicing Agreement dated as of
         December 1, 2002, among SAMI,
         Wells Fargo Bank Minnesota,
         National Association, as master servicer
          and securities administrator,
         EMC Mortgage Corporation and
          Bank One, National Association
         as Trustee and auction administrator

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

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

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

_____             2.       Foreclosure

_____             3.       Substitution

_____             4.       Other Liquidation

_____             5.       Nonliquidation                     Reason: __________

_____             6.       California Mortgage Loan paid in full
                                              --------------------------------

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

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

                                       D-1

<PAGE>

                                    EXHIBIT E

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

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

STATE OF                   )
                           ) ss:
COUNTY OF                  )

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

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

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Structured Asset Mortgage
Investments Inc., Bear Stearns ARM Trust, Mortgage Pass-Through Certificates,
Series 2002-12, 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 or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

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

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

                                       E-1

<PAGE>

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

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

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

                                         [NAME OF INVESTOR]

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

                                               Address of Investor
                                               for receipt of tax
                                               information:

                                       E-2

<PAGE>

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

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

NOTARY PUBLIC

COUNTY OF

STATE OF

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

                                       E-3

<PAGE>

                                   EXHIBIT F-1

                            FORM OF INVESTMENT LETTER

                                                          [Date]
[SELLER]

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

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

          Re:  Structured Asset Mortgage Investments Inc., Bear Stearns ARM
               Trust, Series 2002-12 Mortgage Pass-Through Certificates (the
               "Certificates"), including the [Class B-4, Class B-5, Class B-6]
               Certificates (the "Privately Offered Certificates")
               ----------------------------------------------------------------

Dear Ladies and Gentlemen:

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

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

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

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

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

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

                                      F-1-1

<PAGE>

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

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

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

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

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

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

                                      F-1-2

<PAGE>

                           Exemption ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE
                           95-60 or PTE 96-23 and (II) will not give rise to any
                           additional fiduciary duties on the part of the
                           Seller, the Securities Administrator, the Master
                           Servicer or the Trustee in addition to those
                           undertaken in the Pooling and Servicing Agreement.

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

                                      F-1-3

<PAGE>

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

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

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

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

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

                                      F-1-4

<PAGE>

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

                                          Very truly yours,

                                          [PURCHASER]

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

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

                                      F-1-5

<PAGE>

                             Nominee Acknowledgment

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

                                          [NAME OF NOMINEE]

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

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

                                      F-1-6

<PAGE>

                                   EXHIBIT F-2

                  FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE

[SELLER]                                      [Date]

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

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

               Re:  Structured Asset Mortgage Investments Inc., Bear Stearns ARM
                    Trust, Series 2002-12 Mortgage Pass-Through Certificates,
                    Class B-4, Class B-5 and Class B-6 Certificates (the
                    "Privately Offered Certificates")
                    ------------------------------------------------------------

Dear Ladies and Gentlemen:

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

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

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

         Amount: $ _____________________; and

2.       The dollar amount set forth above is:

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

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

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

                                      F-2-1

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                      F-2-2

<PAGE>

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

         The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of December 1, 2002, among Structured Asset
Mortgage Investments Inc., Wells Fargo Bank Minnesota, National Association, EMC
Mortgage Corporation and Bank One, National Association, as Trustee and auction
administrator, 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 or PTE 96-23 and (II)
will not give rise to any additional fiduciary duties on the part of the Seller,
the Securities Administrator, the Master Servicer or the Trustee in addition to
those undertaken in 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.

                                      F-2-3

<PAGE>

Name of Nominee (if any):

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

                                          Very truly yours,

                                          [PURCHASER]

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

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

                                      F-2-4

<PAGE>

                             Nominee Acknowledgment

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

                                          [NAME OF NOMINEE]

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

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

                                      F-2-5

<PAGE>

                                    EXHIBIT G

                           FORM OF CUSTODIAL AGREEMENT

                  THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of December 30, 2002, by and among BANK
ONE, NATIONAL ASSOCIATION, as trustee (including its successors under the
Pooling and Servicing Agreement defined below, the "Trustee"), STRUCTURED ASSET
MORTGAGE INVESTMENTS INC., as company (together with any successor in interest,
the "Company"), WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as master
servicer and securities administrator (together with any successor in interest
or successor under the Pooling and Servicing Agreement referred to below, the
"Master Servicer") and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as
custodian (together with any successor in interest or any successor appointed
hereunder, the "Custodian").

                                WITNESSETH THAT:

                  WHEREAS, the Company, the Master Servicer and the Trustee have
entered into a Pooling and Servicing Agreement, dated as of December 1, 2002,
relating to the issuance of Bear Stearns ARM Trust 2002-12, Mortgage
Pass-Through Certificates, Series 2002-10 (as in effect on the date of this
agreement, the "Original Pooling and Servicing Agreement," and as amended and
supplemented from time to time, the "Pooling and Servicing Agreement'); and

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

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

                                   ARTICLE I.
                                   DEFINITIONS

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

                                   ARTICLE II.
                          CUSTODY OF MORTGAGE DOCUMENTS

                  Section 2.1. CUSTODIAN TO ACT AS AGENT: ACCEPTANCE OF MORTGAGE
FILES. The Custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a) receipt of the Mortgage

                                       G-1

<PAGE>

Files relating to the Mortgage Loans identified on the schedule attached hereto
(the "Mortgage Files") and declares that it holds and will hold such Mortgage
Files as agent for the Trustee, in trust, for the use and benefit of all present
and future Certificateholders.

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

                  Section 2.3.   REVIEW OF MORTGAGE FILES.

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

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

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

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

                                       G-2

<PAGE>

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

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

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

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

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

                  At any time that a Servicer is required to deliver to the
Custodian a Request for Release, the Servicer shall deliver two copies of the
Request for Release if delivered in hard copy or the Servicer may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release.

                                       G-3

<PAGE>

In connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, such Request for Release shall be accompanied by
an assignment of mortgage, without recourse, from the Trustee to the Mortgage
Loan Seller and the related Mortgage Note shall be endorsed without recourse by
the Trustee and be returned to the Mortgage Loan Seller. In connection with any
Request for Release of a Mortgage File because of the payment in full of a
Mortgage Loan, such Request for Release shall be accompanied by a certificate of
satisfaction or other similar instrument to be executed by or on behalf of the
Trustee and returned to the related Servicer.

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

                                  ARTICLE III.
                            CONCERNING THE CUSTODIAN

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

                  Section 3.2.   RESERVED.

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

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

                                       G-4

<PAGE>

arise from its negligence or bad faith or to the extent that such cost or
expense is indemnified by the Company pursuant to the Pooling and Servicing
Agreement.

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

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

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

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

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

                                   ARTICLE IV.
                            MISCELLANEOUS PROVISIONS

                  Section 4.1. NOTICES. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by registered or certified mail, postage prepaid, return receipt

                                       G-5

<PAGE>

requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.

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

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

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

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

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

                                       G-6

<PAGE>

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

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

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

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

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

                                       G-6

<PAGE>

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

                  On the 30th day of December 2002 before me, a notary public in
and for said State, personally appeared _______________, known to me to be a
_________________of Bank One, National Association, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation and acknowledged to me that
such corporation executed the within instrument.

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

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

[SEAL]

                                       G-6

<PAGE>

STATE OF MARYLAND        )
                         ) ss:
COUNTY OF HOWARD         )

                  On the 30th day of December 2002 before me, a notary public in
and for said State, personally appeared _________________, known to me to be an
Assistant Vice President of Wells Fargo Bank Minnesota, National Association, a
national banking association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said national banking
association, and acknowledged to me that such national banking association
executed the within instrument.

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

                                              ---------------------------------
                                                    Notary Public
[SEAL]

                                       G-6

<PAGE>

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

                  On the 30th day of December 2002 before me, a notary public in
and for said State, personally appeared _________________, known to me to be a
Vice President of Structured Asset Mortgage Investments Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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

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

                                       G-6

<PAGE>

STATE OF MARYLAND                   )
                                    ) ss:
 COUNTY OF HOWARD                   )

                  On the 30th day of December 2002 before me, a notary public in
and for said State, personally appeared _________________, known to me to be an
Assistant Vice President of Wells Fargo Bank Minnesota, National Association,
one of the corporations that executed the within instrument, and also known to
me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.

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

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

                                       G-6

<PAGE>

                                   EXHIBIT ONE

                     FORM OF CUSTODIAN INITIAL CERTIFICATION

                                          December __, 2002

Bank One, National Association        Structured Asset Mortgage Investments Inc.
153 West 51st St., 5th Floor          383 Madison Avenue
New York, New York 10019              New York, New York 10179

Attention: Structured Asset Mortgage Investments Inc., Series 2002-10

               Re:  Custodial Agreement, dated as of December 1, 2002, by and
                    among Bank One, National Association, Structured Asset
                    Mortgage Investments Inc. and Wells Fargo Bank Minnesota,
                    National Association relating to Bear Stearns ARM Trust,
                    Mortgage Pass-Through Certificates, Series 2002-12
                    ----------------------------------------------------------

Ladies and Gentlemen:

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

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

                                            WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION

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

                                       G-6

<PAGE>

                                   EXHIBIT TWO

                     FORM OF CUSTODIAN INTERIM CERTIFICATION

                                                   December __, 2002

Bank One, National Association        Structured Asset Mortgage Investments Inc.
153 West 51st St., 5th Floor          383 Madison Avenue
New York, New York 10019              New York, New York 10179

Attention:  Structured Asset Mortgage Investments Inc., Series 2002-12

          Re:  Custodial Agreement, dated as of December __, 20__, by and among
               Bank One, National Association, Structured Asset Mortgage
               Investments Inc. and Wells Fargo Bank Minnesota, National
               Association relating to Bear Stearns ARM Trust, Mortgage
               Pass-Through Certificates, Series 2002-12
               -----------------------------------------------------------------

Ladies and Gentlemen:

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

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

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION

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

                                       G-6

<PAGE>

                                  EXHIBIT THREE

                      FORM OF CUSTODIAN FINAL CERTIFICATION

                                            December __, 20__

Bank One, National Association     Structured Asset Mortgage Investments Inc.
153 West 51st St., 5th Floor       383 Madison Avenue
New York, New York 10019           New York, New York 10179

Attention: Structured Asset Mortgage Investments Inc., Series 2002-12

               Re:  Custodial Agreement, dated as of December __, 20__, by and
                    among Bank One, National Association, Structured Asset
                    Mortgage Investments Inc. and Wells Fargo Bank Minnesota,
                    National Association relating to Bear Stearns ARM Trust,
                    Mortgage Pass-Through Certificates, Series 2002-12
                    -----------------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3 of the above-captioned
Custodial Agreement, the undersigned, as Custodian, hereby certifies that it has
received a Mortgage File with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule containing with respect to each such Mortgage Loan:

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

                  (ii) The original Mortgage with evidence of recording
         indicated thereon or a copy of the Mortgage certified by the public
         recording office in which such mortgage has been recorded;

                  (iii) An original Assignment of the Mortgage to the Trustee
         with evidence of recording indicated thereon or a copy of such
         assignment certified by the public recording office in which such
         assignment has been recorded;

                  (iv) With respect to each Mortgage Loan, to the extent
         available, the original recorded assignment or assignments of the
         Mortgage showing an unbroken chain of title from the originator thereof
         to the Person assigning it to the Trustee or a copy of such

                                       G-6

<PAGE>

         assignment or assignments of the Mortgage certified by the public
         recording office in which such assignment or assignments have been
         recorded; and

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

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

                                           WELLS FARGO BANK
                                           MINNESOTA, NATIONAL
                                           ASSOCIATION

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

                                       G-6

<PAGE>

                                   EXHIBIT H-1

                              SERVICING AGREEMENTS

                                      WFHM

                             [provided upon request]

                                      H-1-1

<PAGE>

                                   EXHIBIT H-2

                               SERVICING AGREEMENT

                                      WMBFA

                             [provided upon request]

                                      H-2-1

<PAGE>

                                    EXHIBIT I

                              ASSIGNMENT AGREEMENTS

                             [provided upon request]

                                       I-1

<PAGE>

                                    EXHIBIT J

                        MORTGAGE LOAN PURCHASE AGREEMENT

                             [provided upon request]

                                       J-1

<PAGE>

                                    EXHIBIT K

                                MARKET VALUE SWAP

                             [provided upon request]

                                       K-1

<PAGE>

                                    EXHIBIT L

                                 SWAP GUARANTEE

                             [provided upon request]

                                       L-1

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