Document:

EXHIBIT

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                   STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,

                                     SELLER

                         BANK ONE, NATIONAL ASSOCIATION,

                                     TRUSTEE

                         BANK ONE, NATIONAL ASSOCIATION

                              AUCTION ADMINISTRATOR

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,

                            SECURITIES ADMINISTRATOR

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

                         POOLING AND SERVICING AGREEMENT

                            Dated as of March 1, 2001

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

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

                                  Series 2001-2

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                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

                                    ARTICLE I

                                   Definitions

                                   ARTICLE II

                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates

Section 2.01.  Conveyance of Mortgage Loans to Trustee........................39
Section 2.02.  Acceptance of Mortgage Loans by Trustee........................40
Section 2.03.  Assignment of Interest in the Mortgage Loan Purchase
               Agreement......................................................42
Section 2.04.  Substitution of Mortgage Loans.................................43
Section 2.05.  Issuance of Certificates.......................................44
Section 2.06.  Representations and Warranties Concerning the Seller...........45

                                   ARTICLE III

                 Administration and Servicing of Mortgage Loans

Section 3.01.  Master Servicer................................................47
Section 3.02.  REMIC-Related Covenants........................................47
Section 3.03.  Reports Filed With Securities and Exchange Commission..........48
Section 3.04.  UCC............................................................48

                                   ARTICLE IV

                                    Accounts

Section 4.01.  Certificate Account............................................49
Section 4.02.  Permitted Withdrawals and Transfers From the Certificate
               Account........................................................50
Section 4.03.  Distribution Account...........................................50
Section 4.04.  Permitted Withdrawals and Transfers From the Distribution
               Account........................................................51

                                    ARTICLE V

                                  Certificates

Section 5.01.  Certificates...................................................52
Section 5.02.  Registration of Transfer and Exchange of Certificates..........58
Section 5.03.  Mutilated, Destroyed, Lost or Stolen Certificates..............62
Section 5.04.  Persons Deemed Owners..........................................63

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Section 5.05.  Transfer Restrictions on Residual Certificates.................63
Section 5.06.  Restrictions on Transferability of Certificates................64
Section 5.07.  ERISA Restrictions.............................................64
Section 5.08.  Rule 144A Information..........................................65

                                   ARTICLE VI

                         Payments to Certificateholders

Section 6.01.  Distributions on the Certificates..............................66
Section 6.02.  Allocation of Losses...........................................70
Section 6.03.  Payments.......................................................72
Section 6.04.  Statements to Certificateholders...............................73
Section 6.05.  Monthly Advances...............................................76

                                   ARTICLE VII

                                 Indemnification

Section 7.01.  Indemnification of the Trustee and the Securities
               Administrator..................................................77

                                  ARTICLE VIII

                                     Default

Section 8.01.  Events of Default..............................................78
Section 8.02.  Trustee to Act; Appointment of Successor.......................78
Section 8.03.  Notification to Certificateholders.............................79
Section 8.04.  Waiver of Defaults.............................................79
Section 8.05.  List of Certificateholders.....................................79

                                   ARTICLE IX

             Concerning the Trustee and the Securities Administrator

Section 9.01.  Duties of Trustee..............................................80
Section 9.02.  Certain Matters Affecting the Trustee and the Securities
               Administrator..................................................82
Section 9.03.  Trustee and Securities Administrator Not Liable for
               Certificates or Mortgage Loans ................................83
Section 9.04.  Trustee and Securities Administrator May Own Certificates......84
Section 9.05.  Trustee's and Securities Administrator's Fees and Expenses.....84
Section 9.06.  Eligibility Requirements for Trustee and Securities
               Administrator..................................................85
Section 9.07.  Insurance......................................................85
Section 9.08.  Resignation and Removal of the Trustee and Securities
               Administrator..................................................85
Section 9.09.  Successor Trustee and Successor Securities Administrator.......86
Section 9.10.  Merger or Consolidation of Trustee or Securities
               Administrator..................................................87

                                      -ii-

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Section 9.11.  Appointment of Co-trustee or Separate Trustee..................87
Section 9.12.  Federal Information Returns and Reports to
               Certificateholders; REMIC Administration.......................88
Section 9.13.  Maintenance of Supplemental PMI Policy; Collections
               Thereunder.....................................................90

                                    ARTICLE X

                                   Termination

Section 10.01. Termination Upon Repurchase by the Seller or its Designee
               or Liquidation of the Mortgage Loans..........................91
Section 10.02. Additional Termination Requirements...........................93

                                   ARTICLE XI

                          Mandatory Auction Provisions

Section 11.01. The Market Value Swap..........................................95
Section 11.02. Rights of the Auction Administrator............................95
Section 11.03. Removal of the Auction Administrator...........................95
Section 11.04. Duties of the Trustee With Respect to the Mandatory Auction....95
Section 11.05. Mandatory Auction Certificates.................................95

                                   ARTICLE XII

                            Miscellaneous Provisions

Section 12.01. Intent of Parties..............................................97
Section 12.02. Amendment......................................................97
Section 12.03. Recordation of Agreement.......................................98
Section 12.04. Limitation On Rights of Certificateholders.....................98
Section 12.06. Governing Law.................................................100
Section 12.07. Notices.......................................................100
Section 12.08. Severability of Provisions....................................100
Section 12.09. Successors and Assigns........................................100
Section 12.10. Article and Section Headings..................................101
Section 12.11. Counterparts..................................................101
Section 12.12. Notice to Rating Agencies.....................................101

                                      -iii-

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                                    EXHIBITS

Exhibit A-1       -    Form of Class A 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-1       -    Form of Rule 144A and Related Matters Certificate
Exhibit G         -    Form of Initial Certification
Exhibit H         -    Form of Final Certification
Exhibit I-1 to 5  -    Servicing Agreements
Exhibit J         -    Supplemental PMI Policy from Supplemental PMI Insurer
Exhibit K         -    Market Value Swap
Exhibit L         -    The Swap Guarantee

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

     Pooling and Servicing Agreement dated as of March 1, 2001, 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, as
auction administrator (the "Auction Administrator") and Wells Fargo Bank
Minnesota, National Association, as securities administrator (the "Securities
Administrator").

                              PRELIMINARY STATEMENT

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

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

     The 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 $1,807,197,590. The initial principal amount of
the Certificates will not exceed such Outstanding Principal Balance.

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

                                    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.

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

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

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

     AGGREGATE EXPENSE RATE: With respect to any Mortgage Loan, the sum of the
Master Servicing Fee Rate and the Supplemental PMI Insurance Premium Rate (if
applicable).

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

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

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

          (b) as to any Distribution Date and amounts distributable pursuant to
     clauses (ii), (iv) and (v) of the definition of Group I Subordinate Optimal
     Principal Amount, and as to each Class of Group I Subordinate Certificates
     (other than the Class of Group I Subordinate

                                       -2-

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     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 I 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 I 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 I Subordinate Certificates which satisfy
     the related Class Prepayment Distribution Trigger and to the Class of Group
     I Subordinate Certificates having the lowest numerical designation in
     reduction of their respective Current Principal Amounts in the order of
     their numerical Class designations.

     With respect to each Class of Group II Subordinate Certificates:

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

          (d) as to any Distribution Date and amounts distributable pursuant to
     clauses (ii), (iv) and (v) of the definition of Group II Subordinate
     Optimal Principal Amount, and as to each Class of Group II Subordinate
     Certificates (other than the Class of Group II 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 II 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 II 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 II Subordinate Certificates which satisfy
     the related Class Prepayment Distribution Trigger and to the Class of Group
     II 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, Aaa in the case of Moody's or AAA in the case
of Fitch. For any short-term

                                       -3-

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deposit or security, or a rating of A-l+ in the case of S&P, P-1 in the case of
Moody's or F-1+ in the case of Fitch.

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

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

     ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT: The assignment,
assumption and recognition agreement, dated March 30, 2001, among EMC, the
Securities Administrator, the Trustee and the Master Servicer.

     ASSUMED FINAL DISTRIBUTION DATE: February 25, 2031, 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 I Available Funds and the Group II Available Funds for such Distribution
Date.

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

     BANK OF AMERICA: Bank of America, N.A.

     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 is closed or on which banking institutions
in New York City, Maryland, Minnesota, Illinois, Texas or California, or the
jurisdiction in which the Trustee, the Master Servicer or the Securities
Administrator is authorized or obligated by law or executive order to be closed.

                                       -4-

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

     CERTIFICATE ACCOUNT: The trust account or accounts created and maintained
pursuant to Section 4.01, which shall be denominated "Bank One, National
Association, as Trustee f/b/o holders of Structured Asset Mortgage Investments
Inc., Bear Stearns ARM Trust, Mortgage Pass-Through Certificates, Series 2001-2
- Certificate Account."

     CERTIFICATE GROUP: The Group I Certificates or Group II 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.

     CLASS: With respect to the Certificates, I-A-1, I-X-1, I-A-2, I-A-3, R-I,
R-II, II-A-1, II-A-2, II-A-2A, II-A-2B, II-A-2C, II-X-2, 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, II-B-6.

     CLASS I-A-2 SENIOR OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date,
an amount equal to the sum, without duplication, of:

          (i) the applicable Class I-A-2 Senior Percentage of all scheduled
     payments of principal allocated to the Scheduled Principal Balance due on
     each Outstanding Mortgage Loan in Loan Group I-2 on the related Due Date as
     specified in the amortization schedule at the time applicable thereto
     (after adjustments for previous Principal Prepayments but before any
     adjustment to such amortization schedule by reason of any bankruptcy or
     similar proceeding or any moratorium or similar waiver or grace period);

          (ii) the applicable Class I-A-2 Senior Prepayment Percentage of all
     Principal Prepayments in part received during the related Prepayment Period
     with respect to each Group I-2 Mortgage Loan, together with the applicable
     Class I-A-2 Senior Prepayment Percentage of the Scheduled Principal Balance
     of each Group I-2 Mortgage Loan which was the subject of a Principal
     Prepayment in full during the related Prepayment Period;

          (iii) the lesser of (a) the applicable Class I-A-2 Senior Prepayment
     Percentage of all Net Liquidation Proceeds, allocable to principal received
     in respect of each Group I-2 Mortgage Loan which became a Liquidated
     Mortgage Loan during the related Prepayment Period; and (b) the applicable
     Class I-A-2 Senior Percentage of the Scheduled Principal Balance of each
     Group I-2 Mortgage Loan which became a Liquidated Mortgage Loan during the
     related Prepayment Period; and

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          (iv) the applicable Class I-A-2 Senior Prepayment Percentage of the
     sum of (a) the Scheduled Principal Balance of each Group I-2 Mortgage Loan
     or related REO Property which was purchased by the Mortgage Loan Seller or
     EMC on such Distribution Date pursuant to the related Servicing Agreement,
     the Mortgage Loan Purchase Agreement or this Agreement, as applicable, and
     (b) the excess, if any, of the Scheduled Principal Balance of a Group I-2
     Mortgage Loan that has been replaced by the Mortgage Loan Seller or EMC
     with a Substitute Mortgage Loan pursuant to the related Servicing
     Agreement, the Mortgage Loan Purchase Agreement or Section 2.04 of this
     Agreement, as applicable, on such Distribution Date over the Scheduled
     Principal Balance of such Substitute Mortgage Loan.

     CLASS I-A-3 SENIOR OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date,
an amount equal to the sum, without duplication, of:

          (i) the applicable Class I-A-3 Senior Percentage of all scheduled
     payments of principal allocated to the Scheduled Principal Balance due on
     each Outstanding Mortgage Loan in Loan Group I-3 on the related Due Date as
     specified in the amortization schedule at the time applicable thereto
     (after adjustments for previous Principal Prepayments but before any
     adjustment to such amortization schedule by reason of any bankruptcy or
     similar proceeding or any moratorium or similar waiver or grace period);

          (ii) the applicable Class I-A-3 Senior Prepayment Percentage of all
     Principal Prepayments in part received during the related Prepayment Period
     with respect to each Group I-3 Mortgage Loan, together with the applicable
     Class I-A-3 Senior Prepayment Percentage of the Scheduled Principal Balance
     of each Group I-3 Mortgage Loan which was the subject of a Principal
     Prepayment in full during the related Prepayment Period;

          (iii) the lesser of (a) the applicable Class I-A-3 Senior Prepayment
     Percentage of all Net Liquidation Proceeds, allocable to principal received
     in respect of each Group I-3 Mortgage Loan which became a Liquidated
     Mortgage Loan during the related Prepayment Period; and (b) the applicable
     Class I-A-3 Senior Percentage of the Scheduled Principal Balance of each
     Group I-3 Mortgage Loan which became a Liquidated Mortgage Loan during the
     related Prepayment Period; and

          (iv) the applicable Class I-A-3 Senior Prepayment Percentage of the
     sum of (a) the Scheduled Principal Balance of each Group I-3 Mortgage Loan
     or related REO Property which was purchased by the Mortgage Loan Seller or
     EMC on such Distribution Date pursuant to the related Servicing Agreement,
     the Mortgage Loan Purchase Agreement or this Agreement, as applicable, and
     (b) the excess, if any, of the Scheduled Principal Balance of a Group I-3
     Mortgage Loan that has been replaced by the Mortgage Loan Seller or EMC
     with a Substitute Mortgage Loan pursuant to the related Servicing
     Agreement, the Mortgage Loan Purchase Agreement or Section 2.04 of this
     Agreement, as applicable, on such Distribution Date over the Scheduled
     Principal Balance of such Substitute Mortgage Loan.

     CLASS I-A-2 SENIOR PERCENTAGE: Initially 95.50%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the Current Principal Amount of the Class I-A-2
Certificates immediately preceding such Distribution Date by

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the aggregate Scheduled Principal Balance of the Group I-2 Mortgage Loans as of
the beginning of the related Due Period.

     CLASS I-A-3 SENIOR PERCENTAGE: Initially 95.50%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the Current Principal Amount of the Class I-A-3
Certificates immediately preceding such Distribution Date by the aggregate
Scheduled Principal Balance of the Group I-3 Mortgage Loans as of the beginning
of the related Due Period.

     CLASS I-A-2 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:

Period (dates inclusive)               Senior Prepayment Percentage
--------------------------------------------------------------------------------
April 25, 2001 - March 25, 2008        100%

April 25, 2008 - March 25, 2009        Class I-A-2 Senior Percentage plus 70% of
                                       the Group I-2 Subordinate Percentage

April 25, 2009 - March 25, 2010        Class I-A-2 Senior Percentage plus 60% of
                                       the Group I-2 Subordinate Percentage

April 25, 2010 - March 25, 2011        Class I-A-2 Senior Percentage plus 40% of
                                       the Group I-2 Subordinate Percentage

April 25, 2011 - March 25, 2012        Class I-A-2 Senior Percentage plus 20% of
                                       the Group I-2 Subordinate Percentage

April 25, 2012 and thereafter          Class I-A-2 Senior Percentage

     In addition, no reduction of the Class I-A-2 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, either (A) (i) (x) the aggregate Scheduled
Principal Balance of the Group I Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group I Mortgage Loans in foreclosure and
Group I Mortgage Loans with respect to which the related Mortgaged Property has
been acquired by the Trust), averaged over the last six months, as a percentage
of the sum of the aggregate Current Principal Amount of the Group I Subordinate
Certificates does not exceed 50%, or (y) the aggregate Scheduled Principal
Balance of the Group I Mortgage Loans delinquent 60 days or more (including for
this purpose any such Group I Mortgage Loans in foreclosure and such Group I
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Scheduled Principal Balances of the Group I Mortgage Loans
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Group I Mortgage Loans do not exceed (a) 30% of the Group
I Original Subordinate Principal Balance if such Distribution Date occurs
between and including April 2008 and March 2009, (b) 35% of the Group I Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2009 and March 2010, (c) 40% of the Group I Original Subordinate
Principal Balance if such Distribution Date occurs between and including April
2010 and March 2011, (d) 45% of the Group I Original Subordinate Principal
Balance if such Distribution

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Date occurs between and including April 2011 and March 2012, and (e) 50% of the
Group I Original Subordinate Principal Balance if such Distribution Date occurs
during or after April 2012; or (B) (i) the aggregate Scheduled Principal Balance
of the Group I Mortgage Loans delinquent 60 days or more (including for this
purpose any such Group I Mortgage Loans in foreclosure and such Group I Mortgage
Loans with respect to which the related Mortgaged Property has been acquired by
the Trust), averaged over the last six months, does not exceed 4.0% of the
then-current aggregate Scheduled Principal Balance of the Group I Mortgage
Loans; and (ii) cumulative Realized Losses on the Group I Mortgage Loans do not
exceed (a) 10% of the Group I Original Subordinate Principal Balance if such
Distribution Date occurs between and including April 2008 and March 2009, (b)
15% of the Group I Original Subordinate Principal Balance if such Distribution
Date occurs between and including April 2009 and March 2010, (c) 20% of the
Group I Original Subordinate Principal Balance if such Distribution Date occurs
between and including April 2010 and March 2011, (d) 25% of the Group I Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2011 and March 2012, and (e) 30% of the Group I Original
Subordinate Principal Balance if such Distribution Date occurs during or after
April 2012.

     In addition, if the current weighted average Group I Subordinate Percentage
is equal to or greater than two times the initial weighted average Group I
Subordinate Percentage for the Group I Certificates, and (a) the aggregate
Scheduled Principal Balance of the Group I Mortgage Loans delinquent 60 days or
more (including for this purpose any such Group I Mortgage Loans in foreclosure
and such Group I Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the last six months, as
a percentage of the sum of the aggregate Current Principal Amount of the Group I
Subordinate Certificates does not exceed 50% and (b) cumulative Realized Losses
on the Group I Mortgage Loans do not exceed 10% of the Group I Original
Subordinate Principal Balance, then the Class I-A-2 Senior Prepayment Percentage
for such Distribution Date will equal the Class I-A-2 Senior Percentage;
provided, however, if the current weighted average Group I Subordinate
Percentage for the Group I Certificates is equal to or greater than two times
the initial weighted average Group I Subordinate Percentage for the Certificates
prior to April 25, 2004, then the Class I-A-2 Senior Prepayment Percentage for
such Distribution Date will equal the Class I-A-2 Senior Percentage plus 50% of
the Group I-2 Subordinate Percentage.

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

     CLASS I-A-3 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:

Period (dates inclusive)               Senior Prepayment Percentage
--------------------------------------------------------------------------------
April 25, 2001 - March 25, 2008        100%
--------------------------------------------------------------------------------

                                            -8-

<PAGE>

April 25, 2008 - March 25, 2009        Class I-A-3 Senior Percentage plus 70% of
                                       the Group I-3 Subordinate Percentage

April 25, 2009 - March 25, 2010        Class I-A-3 Senior Percentage plus 60% of
                                       the Group I-3 Subordinate Percentage

April 25, 2010 - March 25, 2011        Class I-A-3 Senior Percentage plus 40% of
                                       the Group I-3 Subordinate Percentage

April 25, 2011 - March 25, 2012        Class I-A-3 Senior Percentage plus 20% of
                                       the Group I-3 Subordinate Percentage

April 25, 2012 and thereafter          Class I-A-3 Senior Percentage

     In addition, no reduction of the Class I-A-3 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, either (A) (i) (x) the aggregate Scheduled
Principal Balance of the Group I Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group I Mortgage Loans in foreclosure and
Group I Mortgage Loans with respect to which the related Mortgaged Property has
been acquired by the Trust), averaged over the last six months, as a percentage
of the sum of the aggregate Current Principal Amount of the Group I Subordinate
Certificates does not exceed 50%, or (y) the aggregate Scheduled Principal
Balance of the Group I Mortgage Loans delinquent 60 days or more (including for
this purpose any such Group I Mortgage Loans in foreclosure and such Group I
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Scheduled Principal Balances of the Group I Mortgage Loans
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Group I Mortgage Loans do not exceed (a) 30% of the Group
I Original Subordinate Principal Balance if such Distribution Date occurs
between and including April 2008 and March 2009, (b) 35% of the Group I Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2009 and March 2010, (c) 40% of the Group I Original Subordinate
Principal Balance if such Distribution Date occurs between and including April
2010 and March 2011, (d) 45% of the Group I Original Subordinate Principal
Balance if such Distribution Date occurs between and including April 2011 and
March 2012, and (e) 50% of the Group I Original Subordinate Principal Balance if
such Distribution Date occurs during or after April 2012; or (B) (i) the
aggregate Scheduled Principal Balance of the Group I Mortgage Loans delinquent
60 days or more (including for this purpose any such Group I Mortgage Loans in
foreclosure and such Group I Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last six
months, does not exceed 4.0% of the then-current aggregate Scheduled Principal
Balance of the Group I Mortgage Loans; and (ii) cumulative Realized Losses on
the Group I Mortgage Loans do not exceed (a) 10% of the Group I Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2008 and March 2009, (b) 15% of the Group I Original Subordinate
Principal Balance if such Distribution Date occurs between and including April
2009 and March 2010, (c) 20% of the Group I Original Subordinate Principal
Balance if such Distribution Date occurs between and including April 2010 and
March 2011, (d) 25% of the Group I Original Subordinate Principal Balance if
such Distribution Date occurs between and including April 2011 and March 2012,
and (e) 30% of the Group I Original Subordinate Principal Balance if such
Distribution Date occurs during or after April 2012.

                                       -9-

<PAGE>

     In addition, if the current weighted average Group I Subordinate Percentage
is equal to or greater than two times the initial weighted average Group I
Subordinate Percentage for the Group I Certificates, and (a) the aggregate
Scheduled Principal Balance of the Group I Mortgage Loans delinquent 60 days or
more (including for this purpose any such Group I Mortgage Loans in foreclosure
and such Group I Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the last six months, as
a percentage of the sum of the aggregate Current Principal Amount of the Group I
Subordinate Certificates does not exceed 50% and (b) cumulative Realized Losses
on the Group I Mortgage Loans do not exceed 10% of the Group I Original
Subordinate Principal Balance, then the Class I-A-3 Senior Prepayment Percentage
for such Distribution Date will equal the Class I-A-3 Senior Percentage;
provided, however, if the current weighted average Group I Subordinate
Percentage for the Group I Certificates is equal to or greater than two times
the initial weighted average Group I Subordinate Percentage for the Certificates
prior to April 25, 2004, then the Class I-A-3 Senior Prepayment Percentage for
such Distribution Date will equal the Class I-A-3 Senior Percentage plus 50% of
the Group I-3 Subordinate Percentage.

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

     CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Group I Subordinate
Certificates or Group II Subordinate Certificates for any Distribution Date, the
Class Prepayment Distribution Trigger is satisfied if the fraction (expressed as
a percentage), the numerator of which is the aggregate Current Principal Amount
of such Class and each Class of Group I Subordinate Certificates or Group II
Subordinate Certificates, respectively, subordinate thereto, if any, and the
denominator of which is the Scheduled Principal Balance of all of the Group I
Mortgage Loans or Group II 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-X, Class R-I and Class R-II Certificates.

     CLASS R-X FLOAT AMOUNT: As defined in Section 4.01.

     CLOSING DATE: March 30, 2001.

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

     COMPENSATING INTEREST PAYMENTS: The amounts described in Section 4.04(viii)
of the Servicing Agreements.

     COMPONENT: With respect to the Class II-X-2 Certificates, II-X-2A, II-X-2B
and II-X-2C. The Components of the Class II-X-2 Certificates are not separately
transferable.

                                      -10-

<PAGE>

     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.

     CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other than an
Interest Only Certificate) as of any Distribution Date, the initial principal
amount of such Certificate, and reduced by (i) all amounts distributed on
previous Distribution Dates on such Certificate with respect to principal, (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Certificate, taking account of the Loss Allocation
Limitation and (iii) in the case of a Subordinate Certificate, such
Certificate's pro rata share, if any, of the applicable Subordinate Certificate
Writedown Amount for previous Distribution Dates. With respect to any Class of
Certificates (other than the Interest Only Certificates), the Current Principal
Amount thereof will equal the sum of the Current Principal Amounts of all
Certificates in such Class. Notwithstanding the foregoing, solely for purposes
of giving consents, directions, waivers, approvals, requests and notices, the
Class R-I and Class R-II 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 ACCOUNT: As defined in the Servicing Agreements.

     CUT-OFF DATE: March 1, 2001.

     CUT-OFF DATE BALANCE: $1,807,197,590.

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

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

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

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

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

     DESIGNATED DEPOSITORY INSTITUTION: A depository institution (commercial
bank, federal savings bank mutual savings bank or savings and loan association)
or trust company (which may

                                      -11-

<PAGE>

include the Trustee), the deposits of which are fully insured by the FDIC to the
extent provided by law.

     DETERMINATION DATE: The Determination Date as defined in the Servicing
Agreements.

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

     DISTRIBUTION ACCOUNT: The trust account or accounts created and maintained
pursuant to Section 4.01, which shall be denominated "Bank One, National
Association, as Trustee f/b/o holders of Structured Asset Mortgage Investments
Inc., Bear Stearns ARM Trust, Mortgage Pass-Through Certificates, Series 2001-2
- Distribution Account."

     DISTRIBUTION ACCOUNT DEPOSIT DATE: The third day prior to each Distribution
Date (or if such third day is not a Business Day, the Business Day prior to such
day).

     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 I-1 Senior Certificates or Group II 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.

                                      -12-

<PAGE>

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

     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 13.01 of the
Servicing Agreements.

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

     FDIC: Federal Deposit Insurance Corporation or any successor thereto.

     FITCH: Fitch, Inc. 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, or Notional Amount in the
case of the Interest Only Certificates, of such Certificate and the denominator
of which is the Current Principal Amount, or Notional Amount in the case of the
Interest Only Certificates, of such Class. With respect to the Certificates in
the aggregate, the fractional undivided interest evidenced by (i) a Residual
Certificate will be deemed to equal 0.5% 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 (ii) 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 Rate Adjustment Date
to determine (subject to rounding, the minimum and maximum Mortgage Interest
Rate and the Periodic Rate Cap) the Mortgage Interest Rate until the next
Interest Rate Adjustment Date.

                                      -13-

<PAGE>

     GROUP II AGGREGATE SUBORDINATE PERCENTAGE: As of any date of determination,
a fraction, expressed as a percentage, the numerator of which is the aggregate
Current Principal Amount of the Group II Subordinate Certificates as of such
date of determination and the denominator of which is the aggregate Scheduled
Principal Balance of the Group II Mortgage Loans as of such date of
determination.

     GROUP I AVAILABLE FUNDS: With respect to any Distribution Date, the sum of
the Group I-1, Group I-2 and Group I-3 Available Funds for such Distribution
Date.

     GROUP I-1 AVAILABLE FUNDS, GROUP I-2 AVAILABLE FUNDS, GROUP I-3 AVAILABLE
FUNDS OR GROUP II 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 with respect to such Distribution Date (c) any other miscellaneous
amounts remitted by the Master Servicer pursuant to the Servicing Agreements,
including without limitation the first sentence of Subsection 7.04 and the
second paragraph of Subsection 11.15 and (d) any reimbursed amount in connection
with losses on investments of deposits in an account, except:

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

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

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

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

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

          (vi) and any expenses of the Trustee pursuant to Section 9.05.

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

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

                                      -14-

<PAGE>

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

     GROUP I INTEREST ONLY CERTIFICATES: The Class I-X-1 Certificates.

     GROUP II INTEREST ONLY CERTIFICATES: The Class II-X-2 Certificates.

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

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

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

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

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

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

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

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

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

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

          (i) the applicable Group I-1 Senior Percentage of all scheduled
     payments of principal allocated to the Scheduled Principal Balance due on
     each Outstanding Mortgage Loan in Loan Group I-1 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);

                                      -15-

<PAGE>

          (ii) the applicable Group I-1 Senior Prepayment Percentage of all
     Principal Prepayments in part received during the related Prepayment Period
     with respect to each Group I-1 Mortgage Loan, together with the applicable
     Group I-1 Senior Prepayment Percentage of the Scheduled Principal Balance
     of each Group I-1 Mortgage Loan which was the subject of a Principal
     Prepayment in full during the related Prepayment Period;

          (iii) the lesser of (a) the applicable Group I-1 Senior Prepayment
     Percentage of all Net Liquidation Proceeds, allocable to principal received
     in respect of each Group I-1 Mortgage Loan which became a Liquidated
     Mortgage Loan during the related Prepayment Period; and (b) the applicable
     Group I-1 Senior Percentage of the Scheduled Principal Balance of each
     Group I-1 Mortgage Loan which became a Liquidated Mortgage Loan during the
     related Prepayment Period; and

          (iv) the applicable Group I-1 Senior Prepayment Percentage of the sum
     of (a) the Scheduled Principal Balance of each Group I-1 Mortgage Loan or
     related REO Property which was purchased by the Mortgage Loan Seller or EMC
     on such Distribution Date pursuant to the related Servicing Agreement, the
     Mortgage Loan Purchase Agreement or this Agreement, as applicable, and (b)
     the excess, if any, of the Scheduled Principal Balance of a Group I-1
     Mortgage Loan that has been replaced by the Mortgage Loan Seller or EMC
     with a Substitute Mortgage Loan pursuant to the related Servicing
     Agreement, the Mortgage Loan Purchase Agreement or Section 2.04 of this
     Agreement, as applicable, on such Distribution Date over the Scheduled
     Principal Balance of such Substitute Mortgage Loan.

          (v) any Diverted Amount allocated to the Group I-1 Senior Optimal
     Principal Amount;

     MINUS

          (vi) any Diverted Amount from the Group I-1 Senior Optimal Principal
     Amount for such Distribution Date.

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

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

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

                                      -16-

<PAGE>

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

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

          (v) any Diverted Amount allocated to the Group II Senior Optimal
     Principal Amount;

     MINUS

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

     GROUP I-1 SENIOR PERCENTAGE: Initially 95.50%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amounts of the Group
I-1 Senior Certificates (other than the Group I Interest Only Certificates)
immediately preceding such Distribution Date by the aggregate Scheduled
Principal Balance of the Group I-1 Mortgage Loans as of the beginning of the
related Due Period.

     GROUP II SENIOR PERCENTAGE: Initially 98.00%. 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 II
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group II Mortgage Loans as of the
beginning of the related Due Period.

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

Period (dates inclusive)             Senior Prepayment Percentage
--------------------------------------------------------------------------------
April 25, 2001 - March 25, 2008      100%
--------------------------------------------------------------------------------

                                      -17-

<PAGE>

April 25, 2008 - March 25, 2009      Group I-1 Senior Percentage plus 70% of the
                                     Group I-1 Subordinate Percentage

April 25, 2009 - March 25, 2010      Group I-1 Senior Percentage plus 60% of the
                                     Group I-1 Subordinate Percentage

April 25, 2010 - March 25, 2011      Group I-1 Senior Percentage plus 40% of the
                                     Group I-1 Subordinate Percentage

April 25, 2011 - March 25, 2012      Group I-1 Senior Percentage plus 20% of the
                                     Group I-1 Subordinate Percentage

April 25, 2012 and thereafter        Group I-1 Senior Percentage

     In addition, no reduction of the Group I-1 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, either (A) (i) (x) the aggregate Scheduled
Principal Balance of the Group I Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group I Mortgage Loans in foreclosure and
Group I Mortgage Loans with respect to which the related Mortgaged Property has
been acquired by the Trust), averaged over the last six months, as a percentage
of the sum of the aggregate Current Principal Amount of the Group I Subordinate
Certificates does not exceed 50%, or (y) the aggregate Scheduled Principal
Balance of the Group I Mortgage Loans delinquent 60 days or more (including for
this purpose any such Group I Mortgage Loans in foreclosure and such Group I
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Scheduled Principal Balances of the Group I Mortgage Loans
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Group I Mortgage Loans do not exceed (a) 30% of the Group
I Original Subordinate Principal Balance if such Distribution Date occurs
between and including April 2008 and March 2009, (b) 35% of the Group I Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2009 and March 2010, (c) 40% of the Group I Original Subordinate
Principal Balance if such Distribution Date occurs between and including April
2010 and March 2011, (d) 45% of the Group I Original Subordinate Principal
Balance if such Distribution Date occurs between and including April 2011 and
March 2012, and (e) 50% of the Group I Original Subordinate Principal Balance if
such Distribution Date occurs during or after April 2012; or (B) (i) the
aggregate Scheduled Principal Balance of the Group I Mortgage Loans delinquent
60 days or more (including for this purpose any such Group I Mortgage Loans in
foreclosure and such Group I Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last six
months, does not exceed 4.0% of the then-current aggregate Scheduled Principal
Balance of the Group I Mortgage Loans; and (ii) cumulative Realized Losses on
the Group I Mortgage Loans do not exceed (a) 10% of the Group I Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2008 and March 2009, (b) 15% of the Group I Original Subordinate
Principal Balance if such Distribution Date occurs between and including April
2009 and March 2010, (c) 20% of the Group I Original Subordinate Principal
Balance if such Distribution Date occurs between and including April 2010 and
March 2011, (d) 25% of the Group I Original Subordinate Principal Balance if
such Distribution Date occurs between and including April 2011 and March 2012,
and (e) 30% of the Group I Original Subordinate Principal Balance if such
Distribution Date occurs during or after April 2012.

                                      -18-

<PAGE>

     In addition, if the current weighted average Group I Subordinate Percentage
is equal to or greater than two times the initial weighted average Group I
Subordinate Percentage for the Group I Certificates, and (a) the aggregate
Scheduled Principal Balance of the Group I Mortgage Loans delinquent 60 days or
more (including for this purpose any such Group I Mortgage Loans in foreclosure
and such Group I Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the last six months, as
a percentage of the sum of the aggregate Current Principal Amount of the Group I
Subordinate Certificates does not exceed 50% and (b) cumulative Realized Losses
on the Group I Mortgage Loans do not exceed 10% of the Group I Original
Subordinate Principal Balance, then the Group I-1 Senior Prepayment Percentage
for such Distribution Date will equal the Group I-1 Senior Percentage; provided,
however, if the current weighted average Group I Subordinate Percentage for the
Group I Certificates is equal to or greater than two times the initial weighted
average Group I Subordinate Percentage for the Certificates prior to April 25,
2004, then the Group I-1 Senior Prepayment Percentage for such Distribution Date
will equal the Group I-1 Senior Percentage plus 50% of the Group I-1 Subordinate
Percentage.

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

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

Period (dates inclusive)             Senior Prepayment Percentage
--------------------------------------------------------------------------------
April 25, 2001 - March 25, 2008      100%

April 25, 2008 - March 25, 2009      Group II Senior Percentage plus 70% of the
                                     Group II Subordinate Percentage

April 25, 2009 - March 25, 2010      Group II Senior Percentage plus 60% of the
                                     Group II Subordinate Percentage

April 25, 2010 - March 25, 2011      Group II Senior Percentage plus 40% of the
                                     Group II Subordinate Percentage

April 25, 2011 - March 25, 2012      Group II Senior Percentage plus 20% of the
                                     Group II Subordinate Percentage

April 25, 2012 and thereafter        Group II Senior Percentage

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

                                      -19-

<PAGE>

Trust), averaged over the last six months, as a percentage of the sum of the
aggregate Current Principal Amount of the Group II Subordinate Certificates does
not exceed 100%, or (y) the aggregate Scheduled Principal Balance of the Group
II Mortgage Loans delinquent 60 days or more (including for this purpose any
such Group II Mortgage Loans in foreclosure and such Group II Mortgage Loans
with respect to which the related Mortgaged Property has been acquired by the
Trust), averaged over the last six months, as a percentage of the aggregate
Scheduled Principal Balances of the Group II Mortgage Loans averaged over the
last six months, does not exceed 2.0%; and (ii) cumulative Realized Losses on
the Group II Mortgage Loans do not exceed (a) 30% of the Group II Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2008 and March 2009, (b) 35% of the Group II Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2009 and March 2010, (c) 40% of the Group II Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2010 and March 2011, (d) 45% of the Group II Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2011 and March 2012, and (e) 50% of the Group II Original
Subordinate Principal Balance if such Distribution Date occurs during or after
April 2012; or (B) (i) the aggregate Scheduled Principal Balance of the Group II
Mortgage Loans delinquent 60 days or more (including for this purpose any such
Group II Mortgage Loans in foreclosure and such Group II Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, does not exceed 4.0% of the then-current
aggregate Scheduled Principal Balance of the Group II Mortgage Loans; and (ii)
cumulative Realized Losses on the Group II Mortgage Loans do not exceed (a) 10%
of the Group II Original Subordinate Principal Balance if such Distribution Date
occurs between and including April 2008 and March 2009, (b) 15% of the Group II
Original Subordinate Principal Balance if such Distribution Date occurs between
and including April 2009 and March 2010, (c) 20% of the Group II Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2010 and March 2011, (d) 25% of the Group II Original
Subordinate Principal Balance if such Distribution Date occurs between and
including April 2011 and March 2012, and (e) 30% of the Group II Original
Subordinate Principal Balance if such Distribution Date occurs during or after
April 2012.

     In addition, if the current Group II Aggregate Subordinate Percentage is
equal to or greater than two times the initial Group II Aggregate Subordinate
Percentage for the Group II Certificates, and (a) the aggregate Scheduled
Principal Balance of the Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group II Mortgage Loans in foreclosure and
such Mortgage Loans with respect to which the related Mortgaged Property has
been acquired by the Trust), averaged over the last six months, as a percentage
of the sum of the aggregate Current Principal Amount of the Group II Subordinate
Certificates does not exceed 100% and (b) cumulative Realized Losses on the
Group II Mortgage Loans do not exceed 10% of the Group II Original Subordinate
Principal Balance, then the Group II Senior Prepayment Percentage for such
Distribution Date will equal the Group II Senior Percentage; provided, however,
if the current Group II Aggregate Subordinate Percentage for the Group II
Certificates is equal to or greater than two times the initial Group II
Aggregate Subordinate Percentage for the Certificates prior to April 25, 2004,
then the Group II Senior Prepayment Percentage for such Distribution Date will
equal the Group II Senior Percentage plus 50% of the Group II Subordinate
Percentage.

                                      -20-

<PAGE>

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

     GROUP I 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 I Certificates (after giving effect to the distribution of principal
and the allocation of applicable Realized Losses in reduction of the Current
Principal Amounts of such Group I Certificates on such Distribution Date)
exceeds (b) the aggregate Scheduled Principal Balances of the Group I Mortgage
Loans on the Due Date related to such Distribution Date.

     GROUP II 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 II Certificates (after giving effect to the distribution of principal
and the allocation of applicable Realized Losses in reduction of the Current
Principal Amounts of such Group II Certificates on such Distribution Date)
exceeds (b) the aggregate Scheduled Principal Balances of the Group II Mortgage
Loans on the Due Date related to such Distribution Date.

     GROUP I 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 II 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 I SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date,
an amount equal to the sum, without duplication, of the following (but in no
event greater than the aggregate Current Principal Amount of the Group I
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
     Loan Group I on the related Due Date as specified in the amortization
     schedule at the time applicable thereto (after adjustment for previous
     Principal Prepayments but before any adjustment to such amortization
     schedule by reason of any bankruptcy or similar proceeding or any
     moratorium or similar waiver or grace period);

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

                                      -21-

<PAGE>

          (iii) the excess, if any, of (A) all Net Liquidation Proceeds with
     respect to the Group I 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 I-1
     Senior Optimal Principal Amount, Class I-A-2 Senior Optimal Principal
     Amount and Class I-A-3 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 I 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 I Mortgage Loan that has been replaced with a Substitute
     Mortgage Loan on such Distribution Date over the Scheduled Principal
     Balance of such Substitute Mortgage Loan; and

          (v) on the Distribution Date on which the Current Principal Amounts of
     the Group I Senior Certificates, Class A-I-2 Certificates or Class A-I-3
     Certificates have all been reduced to zero, 100% of any Group I-1 Senior
     Optimal Principal Amount, Class A-I-2 Senior Optimal Principal Amount and
     Class A-I-3 Senior Optimal Principal Amount, respectively.

After the aggregate Current Principal Amount of the Group I Subordinate
Certificates has been reduced to zero, the Group I Subordinate Optimal Principal
Amount shall be zero.

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

          (i) the Group II Subordinate Percentage of the principal portion of
     all Scheduled Payments due on each Outstanding Mortgage Loan in Loan Group
     II 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 Group II Subordinate Prepayment Percentage of each Principal
     Payment in part during the related Prepayment Period with respect to each
     Group II Mortgage Loan and the Group II Subordinate Prepayment Percentage
     of the Scheduled Principal Balance of each Group II 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 II Mortgage Loans allocable to principal received
     during the related Prepayment Period over (B) the sum of the amounts
     distributable pursuant to clause (iii) of the definition of Group II Senior
     Optimal Principal Amount on such Distribution Date;

                                      -22-

<PAGE>

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

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

After the aggregate Current Principal Amount of the Group II Subordinate
Certificates has been reduced to zero, the Group II Subordinate Optimal
Principal Amount shall be zero.

     GROUP I SUBORDINATE PERCENTAGE: The Group I-1, Group I-2 or Group I-3
Subordinate Percentage, with respect to a Group I-1, Group I-2 or Group I-3
Mortgage Loan, respectively.

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

     GROUP I-2 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus the
Class I-A-2 Senior Percentage.

     GROUP I-3 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus the
Class I-A-3 Senior Percentage.

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

     GROUP I SUBORDINATE PREPAYMENT PERCENTAGE: The Group I-1, Group I-2 or
Group I-3 Subordinate Prepayment Percentage, with respect to a Group I-1, Group
I-2 or Group I-3 Mortgage Loan, respectively.

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

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

     GROUP I-3 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group I-3
Mortgage Loans, on any Distribution Date, 100% minus the Class I-A-3 Senior
Prepayment Percentage, except

                                      -23-

<PAGE>

that on any Distribution Date after the Current Principal Amounts of the Class
I-A-3 Certificates have each been reduced to zero, the Group I-3 Subordinate
Prepayment Percentage will equal 100%.

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

     HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 12.02(b) and 12.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller, the Master Servicer or the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Fractional Undivided Interest evidenced thereby shall not be taken into account
in determining whether the requisite percentage of Fractional Undivided
Interests necessary to effect any such consent has been obtained.

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

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

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

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

     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.

                                      -24-

<PAGE>

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

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

     INTEREST ONLY CERTIFICATES: The Group I Interest Only Certificates and
Group II Interest Only 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, constitutes a Relief Act Mortgage Loan, an amount determined as
follows:

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

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

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

     INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases any 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
Master Servicer has determined that all amounts it expects to recover from or on
account of such Mortgage Loan have been recovered.

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

     LIQUIDATION EXPENSES: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer, such expenses including (a)

                                      -25-

<PAGE>

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 I, Loan Group I-1, Loan Group I-2, Loan Group I-3 or
Loan Group II, as applicable.

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

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

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

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

     LOAN GROUP II: The group of Mortgage Loans designated as belonging to Loan
Group II 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 hereof.

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

     MAJORITY CLASS R-X CERTIFICATEHOLDER: Any Holder of a 50.01% or greater
percentage interest in the Class R-X Certificates.

     MANDATORY AUCTION CERTIFICATES: The Class II-A-2A, Class II-A-2B and Class
II-A-2C Certificates.

     MANDATORY AUCTION DISTRIBUTION DATE: February 25, 2005, 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.

                                      -26-

<PAGE>

     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: As of the Closing Date, Bank of America and, thereafter,
its respective successors in interest who meet the qualifications of the
Servicing Agreements and this Agreement.

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

     MASTER SERVICING FEE RATE: As to any Mortgage Loan, a per annum rate equal
to 0.250%.

     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 Master Servicer pursuant to Section 11.17 of the Servicing Agreements or the
Trustee 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 March 30, 2001, between EMC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto.

                                      -27-

<PAGE>

     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: Bank of America, N.A., as seller of the Mortgage
Loans under the Servicing Agreements.

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

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

     MORTGAGOR: The obligor on a Mortgage Note.

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

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

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

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

     NOTIONAL AMOUNT: The Notional Amount of the Class I-X-1 Certificates shall
equal the Current Principal Amount of the Class I-A-1 Certificates, which is
equal to the Uncertificated Principal Balance of REMIC I Regular Interest 1-A1.
The Notional Amount of the Class II-X-2 Certificates shall consist of the sum of
three components (i) the Current Principal Amount of the Class II-A-2A
Certificates, which is equal to the Uncertificated Principal Balance of REMIC I
Regular Interest 3A, (ii) the Current Principal Amount of the Class II-A-2B
Certificates, which is equal to the Uncertificated Principal Balance of REMIC I
Regular Interest 4A and (iii) the Current Principal Amount of the Class II-A-2C
Certificates, which is equal to the Uncertificated Principal Balance of REMIC I
Regular Interest 5A. The Class II-X-2 Certificates will bear interest (A) at a
pass-through rate on the Notional Amount in clause (i) above equal to, up to the
Mandatory Auction Distribution Date, 1.261% per annum, and 0.00% thereafter; (B)
at a pass-through rate on the Notional Amount in clause (ii) above equal to, up
to the Mandatory Auction Distribution Date, 1.061% per annum, and 0.00%
thereafter; and (C) at a pass-through rate on the Notional Amount in

                                      -28-

<PAGE>

clause (iii) above equal to, up to the Mandatory Auction Distribution Date, the
greater of (x) zero and (y) (1) the weighted average net rate of the Group II
Mortgage Loans over (2) the pass-through rate on the Class II-A-2C Certificates,
and 0.00% thereafter.

     OFFERED CERTIFICATE: Any Senior Certificate or Offered Subordinate
Certificate.

     OFFERED SUBORDINATE CERTIFICATES: The Class I-B-l, Class II-B-1, Class
I-B-2, Class II-B-2, Class I-B-3 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 of the Master Servicer or the Seller,
as applicable, and delivered to the Trustee, as required by this Agreement.

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

     ORIGINAL 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.

     PAR PRICE: With respect to each Mandatory Auction Certificate and the
Mandatory Auction Distribution Date, (1) one month's interest on the Current
Principal Amount thereof immediately prior to the Mandatory Auction Distribution
Date plus (2) the Current Principal Amount thereof immediately prior to the
Mandatory Auction Distribution Date.

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

     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.

                                      -29-

<PAGE>

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

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

          (ii) (a) demand or time deposits, federal funds or bankers'
     acceptances issued by any depository institution or trust company
     incorporated under the laws of the United States of America or any state
     thereof (including the Trustee 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) 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;

                                      -30-

<PAGE>

          (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 any affiliate of the Trustee acts as a manager or
     an advisor;

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

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

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

     PHYSICAL CERTIFICATES: The Residual Certificates and the Private
Certificates.

     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 II-B-4, Class I-B-5, Class
II-B-5, Class I-B-6 and Class II-B-6 Certificate.

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

                                      -31-

<PAGE>

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

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

     RATING AGENCIES: S&P, Moody's and Fitch.

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

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

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

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

     REMIC X REGULAR INTERESTS: REMIC X Regular Interest I-1, REMIC X Regular
Interest I-2, REMIC X Regular Interest I-3 and REMIC X Regular Interest II, each
with such terms as described in Section 5.01(c).

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

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

                                      -32-

<PAGE>

     REMIC I REGULAR INTERESTS: REMIC I Regular Interest 1A-1, REMIC I Regular
Interest 1A-2, REMIC I Regular Interest 1A-3, REMIC I Regular Interest 1B-A,
REMIC I Regular Interest 1B-B, REMIC I Regular Interest 1B-C, REMIC I Regular
Interest 2AB, REMIC I Regular Interest 3A, REMIC I Regular Interest 4A and REMIC
I Regular Interest 5A, each with such terms as described in Section 5.01(c).

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

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

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

     REMIC OPINION: An Opinion of Independent Counsel, to the effect that the
proposed action described therein would not, under the REMIC Provisions, (i)
cause REMIC X, REMIC I or REMIC II 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 EMC pursuant to the
Mortgage Loan Purchase Agreement or Article II of this Agreement, an amount
equal to the sum of (i) 100% of the Outstanding Principal Balance of such
Mortgage Loan as of the date of repurchase (or if the related Mortgaged Property
was acquired with respect thereto, 100% of the Outstanding Principal Balance at
the date of the acquisition), plus (ii) accrued but unpaid interest on the
Outstanding Principal Balance at the related Mortgage Interest Rate, through and
including the last day of the month of repurchase, and reduced by (iii) any
portion of the Master Servicing Fees, Monthly Advances and advances payable to
the purchaser of the Mortgage Loan. With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to a Servicing Agreement, the "Repurchase Price"
as defined therein plus any additional amounts payable pursuant to Subsection
7.04 of the related Servicing Agreement.

     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.

                                      -33-

<PAGE>

     RESIDUAL CERTIFICATES: Any of the Class R Certificates.

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

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

     S&P: Standard and Poor's, 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

                                      -34-

<PAGE>

BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT
OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN
EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM
TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR
ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE SERVICING,
MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN
ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS
PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED
TRANSACTION EXEMPTION ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23
AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY DUTIES ON THE PART OF
THE SELLER, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE,
WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK- ENTRY CERTIFICATE OR A
GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF
COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR."

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

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

     SENIOR CERTIFICATES: Group I Senior Certificates and Group II Senior
Certificates.

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

                                      -35-

<PAGE>

     SERVICING AGREEMENTS: The Mortgage Loan Sale and Servicing Agreement, dated
January 16, 2001, February 6, 2001, February 28, 2001, March 15, 2001 and March
28, 2001, each between Bank of America as seller and servicer and EMC as
purchaser.

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

     STARTUP DAY: March 30, 2001.

     STOP-LOSS AMOUNT: As of the Cut-off Date, 2.50% of the Cut-off Date
Balance. With respect to any date of determination after the Cut-off Date, the
initial Stop-Loss Amount, less the aggregate amount of claims paid by the
Supplemental PMI Insurer in respect of the Supplemental PMI Policy on or before
such date of determination.

     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 CERTIFICATE WRITEDOWN AMOUNT: With respect to the Group I
Subordinate Certificates, the Group I Subordinate Certificate Writedown Amount.
With respect to the Group II Subordinate Certificates, the Group II Subordinate
Certificate Writedown Amount.

     SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: The Group I Subordinate Optimal
Principal Amount or the Group II Subordinate Optimal Principal Amount, as
applicable.

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

     SUPPLEMENTAL PMI INSURANCE PREMIUM: With respect to each Distribution Date,
the premium for the Supplemental PMI Policy, equal to one month's interest at
the Supplemental PMI Insurance

                                      -36-

<PAGE>

Premium Rate on the Scheduled Principal Balance (as of the beginning of the
related Due Period) of the Mortgage Loans which were covered by the Supplemental
PMI Policy as of the Cut-off Date, payable by the Trustee on each Distribution
Date from amounts on deposit in the Certificate Account in accordance with
Section 4.02(b) of this Agreement.

     SUPPLEMENTAL PMI INSURANCE PREMIUM RATE: With respect to any Mortgage Loan
covered by the Supplemental PMI Policy, the rate at which the premium on the
Supplemental PMI Policy accrues, which is 0.155% per annum.

     SUPPLEMENTAL PMI INSURER: Triad Guaranty Insurance Corporation, or a
successor appointed in accordance with Section 9.13(b) of this Agreement.

     SUPPLEMENTAL PMI POLICY: The supplemental primary mortgage insurance policy
of the Supplemental PMI Insurer attached hereto as Exhibit J, or any successor
Supplemental PMI Policy.

     SWAP COUNTERPARTY: Bear Stearns Bank plc, 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 ADMINISTRATION AND TAX MATTERS PERSON: The Trustee or any successor
thereto or assignee thereof shall serve as tax administrator hereunder and as
agent for the Tax Matters Person. The Holder of each Class of Residual
Certificates shall be the Tax Matters Person for the related REMIC, as more
particularly set forth in Section 9.12 hereof.

     TERMINATION 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 X or REMIC I
Regular Interest, the balance thereof as indicated in Section 5.01, as reduced
by amounts allocated thereto in reduction thereof in accordance with Section
5.01.

     UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or REO
Property such that the complete restoration of such Mortgaged Property or REO
Property is not fully reimbursable by

                                      -37-

<PAGE>

the hazard insurance policies required to be maintained pursuant to Section 4.10
of the Servicing Agreements, 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.

                                      -38-

<PAGE>

                                   ARTICLE II

                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates

     Section 2.01. CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE. (a) The Seller
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date, but excluding any payments of principal and interest due
on or prior to the Cut-off Date; (ii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Certificate Account, (iii) such assets relating to the Mortgage Loans as from
time to time may be held by the Master Servicer in Protected Accounts for the
benefit of the holder of the Mortgage Loans, (iv) any REO Property, (v) the
Required Insurance Policies and any amounts paid or payable by the insurer under
any Insurance Policy (to the extent the mortgagee has a claim thereto), (vi) the
Mortgage Loan Purchase Agreement to the extent provided in Subsection 2.03(a),
(vii) the Servicing Agreements, (viii) the Assignment, Assumption and
Recognition Agreement, (ix) the Supplemental PMI Policy and (x) 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, 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, (ii) the original Security Instrument, which shall
have been recorded, with evidence of such recording indicated thereon, (iii) a
certified copy of the assignment (which may be in the form of a blanket
assignment if permitted in the jurisdiction in which the Mortgaged Property is
located) to the Trustee of the Security Instrument, with evidence of recording
with respect to each Mortgage Loan in the name of the Trustee thereon (or if
clause (x) in the proviso below applies, shall be in recordable form), (iv) all
intervening assignments of the Security Instrument, if applicable and only to
the extent available to the Seller with evidence of recording thereon, (v) the
original or a copy of the policy or certificate of primary mortgage guaranty
insurance, to the extent available, if any, (vi) the original policy of title
insurance or mortgagee's certificate of title insurance or commitment or binder
for title insurance and (vii) originals of all modification agreements, if
applicable and available;

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

                                                       -39-

<PAGE>

thereon, be delivered to recording offices for recording and have not been
returned to the Seller in time to permit their delivery as specified above, the
Seller may deliver a true copy thereof with a certification by the Seller or the
Master Servicer, on the face of such copy, substantially as follows: "Certified
to be a true and correct copy of the original, which has been transmitted for
recording"; (y) in lieu of the Security Instrument, assignment to the Trustee or
intervening assignments thereof, if the applicable jurisdiction retains the
originals of such documents (as evidenced by a certification from the Seller or
the Master Servicer, to such effect) the Seller may deliver photocopies of such
documents containing an original certification by the judicial or other
governmental authority of the jurisdiction where such documents were recorded;
and (z) the Seller shall not be required to deliver intervening assignments or
Mortgage Note endorsements between Bank of America 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 a certification to such effect and shall deposit all amounts paid
in respect of such Mortgage Loans in the Certificate Account on the Closing
Date. The Seller shall deliver such original documents (including any original
documents as to which certified copies had previously been delivered) to the
Trustee 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 as
set forth below in this Section 2.01(b). The Seller need not cause to be
recorded any assignment in any jurisdiction under any state other than Maryland,
Florida, Mississippi, South Carolina and Tennessee; provided, however, that each
assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust or the Trustee, 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, (iv) the occurrence of a
servicing transfer as described in Section 8.02 hereof and (v) if the Seller is
not the Master Servicer and with respect to any one assignment, the occurrence
of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the
related Mortgage, unless, with respect to clauses (ii) through (v) above, an
Opinion of Counsel is provided stating that such assignment does not need to be
recorded to protect the interest of the Trust in such Mortgage Loan.
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. No later than 45 days after the
Closing Date (or, with respect to any Substitute Mortgage Loan, within five
Business Days after the receipt by the Trustee thereof), the Trustee agrees, for
the benefit of the Certificateholders, to review each Mortgage File delivered to
it and to execute and deliver, or cause to be executed and delivered, to the
Seller an Initial Certification substantially in the form annexed hereto as
Exhibit G. In

                                      -40-

<PAGE>

conducting such review, the Trustee will ascertain whether all required
documents have been executed and received and whether those documents relate,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans it has received, as identified in Exhibit B
to this Agreement, as supplemented (PROVIDED, HOWEVER, that with respect to
those documents described in subclauses (b)(iv), (b)(v) and (b)(vi) of Section
2.01, the Trustee's obligations shall extend only to documents actually
delivered pursuant to such subsections). In performing any such review, the
Trustee may conclusively rely on the purported due execution and genuineness of
any such document and on the purported genuineness of any signature thereon. If
the Trustee finds any document constituting part of the Mortgage File not to
have been executed or received, or to be unrelated to the Mortgage Loans
identified in Exhibit B or to appear to be defective on its face, the Trustee
shall promptly notify the Mortgage Loan Seller. In accordance with the related
Servicing Agreement, the Mortgage Loan Seller shall correct or cure any such
defect within sixty (60) days from the date of notice from the Trustee 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
shall enforce the Mortgage Loan Seller's obligation pursuant to the related
Servicing Agreement, within 60 days from the Trustee'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 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 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 hereto as Exhibit H. In
conducting such review, the Trustee will ascertain whether an original of each
document required to be recorded has been returned from the recording office
with evidence of recording thereon or a certified copy has been obtained from
the recording office. If the Trustee finds any document constituting part of the
Mortgage File has not been received, or to be unrelated, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified in Exhibit B or to appear defective on its face, the
Trustee shall promptly notify the Mortgage Loan Seller (PROVIDED, HOWEVER, that
with respect to those documents described in subsection (b)(iv), (b)(v) and
(b)(vi) of Section 2.01, the Trustee's obligations shall extend only to the
documents actually delivered pursuant to such subsections). In accordance with
the related Servicing Agreement, the Mortgage Loan Seller shall correct or cure
any such defect or EMC shall

                                      -41-

<PAGE>

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

     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, provided that the Seller retains a joint
and several right in the event of breach of the representations, warranties and
covenants of the Master Servicer under the Servicing Agreements to enforce the
provisions thereof and to seek all or any available remedies; and provided
further that this shall not be deemed an agreement or requirement on the part of
the Seller to pursue any such remedies; provided, further, that the obligations
of the Mortgage Loan Seller or EMC, as applicable, to substitute or repurchase,
as applicable, a Mortgage Loan shall be the Trustee's and the
Certificateholders' sole remedy for any breach thereof. At the request of the
Trustee, the Seller shall take such actions as may be necessary to enforce the
above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.

     (b) If the Seller, the Securities Administrator or the Trustee discovers
(i) a breach of any of the representations and warranties set forth in Section 7
of the Servicing Agreements and such breach existed on the date the
representation and warranty was made or (ii) in accordance with Section 7 of the
Mortgage Loan Purchase Agreement, that an event has occurred which rendered the

                                      -42-

<PAGE>

representation and warranty untrue in any material respect between the date of
the related Servicing Agreement and the Closing Date, 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 or EMC, as applicable, within 60 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 related Servicing Agreement,
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 related Servicing Agreement, 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 or EMC, as applicable, 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 or EMC, as applicable, to the extent not required by law to be paid to
the borrower.) Any such purchase by the Mortgage Loan Seller or EMC shall be
made by providing an amount equal to the Repurchase Price to the Trustee for
deposit in the Certificate Account and the Trustee, upon deposit of the
Repurchase Price in the Certificate Account and of written notification
detailing the components of such Repurchase Price, shall release to the Mortgage
Loan Seller or EMC, as applicable, the related Mortgage File and shall execute
and deliver all instruments of transfer or assignment furnished to it by the
Mortgage Loan Seller or EMC, as applicable, without recourse, as are necessary
to vest in the Mortgage Loan Seller or EMC, as applicable, title to and rights
under the Mortgage Loan or any property acquired with respect thereto. Such
purchase shall be deemed to have occurred on the date on which the 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 or EMC to purchase (or substitute a
Substitute Mortgage Loan for) any Mortgage Loan or any property acquired with
respect thereto (or pay the Repurchase Price as set forth in the above proviso)
as to which a breach has occurred and is continuing shall constitute the sole
remedy respecting such breach available to the Certificateholders or the Trustee
on their behalf.

     Section 2.04. SUBSTITUTION OF MORTGAGE LOANS. Notwithstanding anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage Loan pursuant
to the related Servicing Agreement, the Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 of this Agreement, the Mortgage Loan Seller or EMC, as
applicable, may, no later than the date by which such purchase by the Mortgage
Loan Seller or EMC, as applicable, 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 or EMC, as applicable, that such Substitute
Mortgage Loan conforms to the requirements set forth in the definition of
"Substitute Mortgage Loan" in the related Servicing Agreement or this Agreement,
as applicable; PROVIDED, HOWEVER, that substitution pursuant to the related
Servicing Agreement, 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. The Trustee
shall examine the Mortgage File for any Substitute Mortgage Loan in the manner
set forth in Section 2.02(a) and shall notify the Mortgage Loan Seller or EMC,
as applicable, in writing, within five Business Days after receipt, whether or
not the

                                      -43-

<PAGE>

documents relating to the Substitute Mortgage Loan satisfy the requirements of
the third sentence of Subsection 2.02(a). Within two Business Days after such
notification, the Mortgage Loan Seller or EMC, as applicable, shall provide to
the Trustee for deposit in the Certificate Account the amount, if any, by which
the Outstanding Principal Balance as of the next preceding Due Date of the
Mortgage Loan for which substitution is being made, after giving effect to
Scheduled Principal due on such date, exceeds the Outstanding Principal Balance
as of such date of the Substitute Mortgage Loan, after giving effect to
Scheduled Principal due on such date, which amount shall be treated for the
purposes of this Agreement as if it were the payment by the Mortgage Loan Seller
or EMC, as applicable, of the Repurchase Price for the purchase of a Mortgage
Loan by the Mortgage Loan Seller or EMC, as applicable. After such notification
to the Mortgage Loan Seller or EMC and, if any such excess exists, upon receipt
of such deposit, the Trustee shall accept such Substitute Mortgage Loan which
shall thereafter be deemed to be a Mortgage Loan hereunder. In the event of such
a substitution, accrued interest on the Substitute Mortgage Loan for the month
in which the substitution occurs and any Principal Prepayments made thereon
during such month shall be the property of the Trust Fund and accrued interest
for such month on the Mortgage Loan for which the substitution is made and any
Principal Prepayments made thereon during such month shall be the property of
the Mortgage Loan Seller or EMC, as applicable, or the Master Servicer. 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 or EMC,
as applicable, and the Scheduled Principal on the Mortgage Loan for which the
substitution is made due on such Due Date shall be the property of the Trust
Fund. Upon acceptance of the Substitute Mortgage Loan, the Trustee shall release
to the Mortgage Loan Seller or EMC, as applicable, the related Mortgage File
related to any Mortgage Loan released pursuant to the related Servicing
Agreement, 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 or EMC, as applicable, title to
and rights under any Mortgage Loan released pursuant to the related Servicing
Agreement, the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable. The Mortgage Loan Seller or EMC shall deliver the
documents related to the Substitute Mortgage Loan in accordance with the
provisions of the related Servicing 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
applicable Servicing Agreements and the Mortgage Loan Purchase Agreement shall
be deemed to have been made by the Mortgage Loan Seller or EMC with respect to
each Substitute Mortgage Loan as of the date of acceptance of such Mortgage Loan
by the Trustee. The Trustee shall amend the Mortgage Loan Schedule to reflect
such substitution and shall provide a copy of such amended Mortgage Loan
Schedule to the Master Servicer and the Rating Agencies.

     Section 2.05. ISSUANCE OF CERTIFICATES. 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.

                                      -44-

<PAGE>

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

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

     Section 2.06. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER. The
Seller hereby represents and warrants to the Trustee 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
     Purchaser's ability to enter into this Agreement and to consummate the
     transactions contemplated hereby;

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

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

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

                                      -45-

<PAGE>

          (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.

                                      -46-

<PAGE>

                                   ARTICLE III

                 Administration and Servicing of Mortgage Loans

     Section 3.01. MASTER SERVICER. The Mortgage Loans shall be serviced
pursuant to the Servicing Agreements. The Trustee shall furnish the Master
Servicer with any powers of attorney and other documents in form as provided to
it necessary or appropriate to enable the Master Servicer to service and
administer the related Mortgage Loans and REO Property. The Trustee shall
enforce the obligations of the Master Servicer under the Servicing Agreements,
including without limitation its obligation to repurchase converting Mortgage
Loans pursuant to the second sentence of Subsection 7.04 of each Servicing
Agreement.

     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.

     Upon receipt of a request by the Master Servicer, the Trustee shall release
within five Business Days the related Mortgage File to the Master Servicer and
execute and deliver to the Master Servicer, without recourse, a request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Security Instrument (furnished by the
Master Servicer), together with the Mortgage Note with written evidence of
cancellation thereon; PROVIDED, HOWEVER, that in the case of a Mortgage Loan as
to which the related Mortgaged Property is located in California, the related
Mortgage File shall be released upon notification from the Master Servicer that
such party reasonably expects that payment in full will be received promptly. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Certificate Account.

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

     Section 3.02. REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee shall act in accordance herewith to assure continuing
treatment of such REMIC as a REMIC, and the Trustee shall comply with any
directions of the Seller 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

                                      -47-

<PAGE>

received a REMIC Opinion prepared at the expense of the Trust Fund; and (b)
other than with respect to a substitution the related Servicing Agreement, 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. REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION. Within
15 days after each Distribution Date, the Securities Administrator shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System ("EDGAR"), a Form 8-K with a copy of the
statement to the Trustee who shall furnish a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30, 2002, the Securities Administrator shall, in accordance with
industry standards and only if instructed by the Seller, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to March
30, 2002, the Securities Administrator shall file a Form 10-K, in substance
conforming to industry standards, with respect to the Trust Fund. The Seller
hereby grants to the Securities Administrator a limited power of attorney to
execute and file each such document on behalf of the Seller. Such power of
attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Seller of written termination of such power of
attorney and (ii) the termination of the Trust Fund. The Seller agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement and the Mortgage Loans as the Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities Administrator shall have no
responsibility to file any items other than those specified in this Section
3.03; provided, however, the Securities Administrator will cooperate with the
Seller in connection with any additional filings with respect to the Trust Fund
as the Seller deems necessary under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Copies of all reports filed by the Securities
Administrator under the Exchange Act shall be sent to: the Seller c/o Bear,
Stearns & Co. Inc., Attn: Managing Director-Analysis and Control, One Metrotech
Center North, Brooklyn, New York 11202-3859. Fees and expenses incurred by the
Securities Administrator in connection with this Section 3.03 shall not be
reimbursable from the Trust Fund.

     Section 3.04. 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.

                                      -48-

<PAGE>

                                   ARTICLE IV

                                    Accounts

     Section 4.01. CERTIFICATE ACCOUNT. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Certificate Account as a segregated trust account or accounts. The Trustee
will deposit in the Certificate Account as identified by the Master Servicer and
as received, 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 Liquidation Proceeds received by or on
     behalf of the Trustee 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 EMC pursuant to the related Servicing
     Agreement, the Mortgage Loan Purchase Agreement or Section 2.02 or 2.03 of
     this Agreement, as applicable, any amounts which are to be treated pursuant
     to the related Servicing Agreement, the Mortgage Loan Purchase Agreement or
     Section 2.04 of this Agreement, as applicable, as the payment of such a
     Repurchase Price, and all proceeds of any Mortgage Loans or property
     acquired in connection with a purchase pursuant to any Servicing Agreements
     or the optional termination of the Trust;

          (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
     or the Trustee and required to be deposited in the Certificate Account
     pursuant to this Agreement.

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

     (c) The Certificate Account shall constitute a trust account of the Trust
Fund segregated on the books of the Trustee and held by the Trustee in trust in
its Corporate Trust Office, and the Certificate Account and the funds deposited
therein shall not be subject to, and shall be protected from, all claims, liens,
and encumbrances of any creditors or depositors of the Trustee or the Master
Servicer (whether made directly, or indirectly through a liquidator or receiver
of the Trustee or the Master Servicer). The amount at any time credited to the
Certificate Account shall be (i) fully insured by the FDIC to the maximum
coverage provided thereby or (ii) invested in the name of the Trustee, in such
Permitted Investments selected by the Majority Class R-X Certificateholder or
deposited in demand deposits with such depository institutions as selected by
the Majority Class R-X Certificateholder, provided that time deposits of such
depository institutions would be a Permitted

                                      -49-

<PAGE>

Investment. The Majority Class R-X Certificateholder hereby directs that any
amounts in the Certificate Account shall be invested in the One Group
Institutional Prime Money Market Fund, so long as it is a Permitted Investment,
until directed otherwise in writing. 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 from the Certificate Account (the "Class R-X Float Amount") shall be
paid to the holders of the Class R-X Certificates in accordance with Section
6.01(a)(i) of this Agreement. If there is any loss on a Permitted Investment or
demand deposit, the Class R-X Certificateholders shall deposit the amount of the
loss in the Certificate Account. With respect to the Certificate Account and the
funds deposited therein, the Trustee shall take such action as may be necessary
to ensure that the Certificateholders shall be entitled to the priorities
afforded to such a trust account (in addition to a claim against the estate of
the Trustee) as provided by 12 U.S.C. ss. 92a(e), if applicable, or any
applicable comparable state statute applicable to state chartered banking
corporations.

     Section 4.02. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE CERTIFICATE
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 Certificate Account as the Master Servicer has
designated for such transfer or withdrawal pursuant to the Servicing Agreements.
The Trustee may clear and terminate the Certificate Account pursuant to Section
10.01 and remove amounts from time to time deposited in error.

     (b) On an ongoing basis, the Trustee shall withdraw from the Certificate
Account any expenses recoverable by the Trustee or the Securities Administrator
pursuant to Sections 7.01 and 9.05.

     (c) On each Distribution Account Deposit Date, the Trustee will transfer
all amounts on deposit in the Certificate Account to the Distribution Account.

     Section 4.03. DISTRIBUTION ACCOUNT. (a) The Trustee shall establish and
maintain in the -------------------- name of the Trustee, for the benefit of the
Certificateholders, the Distribution Account as a segregated trust account or
accounts.

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

     (c) The Distribution Account shall constitute a trust account of the Trust
Fund segregated on the books of the Trustee and held by the Trustee in trust in
its Corporate Trust Office, and the Distribution Account and the funds deposited
therein shall not be subject to, and shall be protected from, all claims, liens,
and encumbrances of any creditors or depositors of the Trustee or the Master
Servicer (whether made directly, or indirectly through a liquidator or receiver
of the Trustee or the Master Servicer). The amount at any time credited to the
Distribution Account shall be (i) fully insured by the FDIC to the maximum
coverage provided thereby or (ii) invested in the name of the Trustee, in such
Permitted Investments selected by the Trustee or deposited in demand deposits
with such depository institutions as selected by the Trustee, provided that time
deposits of such depository institutions would be a Permitted Investment. All
Permitted Investments shall mature or be subject

                                      -50-

<PAGE>

to redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Date if the obligor for such Permitted Investment is the
Trustee or, if such obligor is any other Person, the Business Day preceding such
Distribution Date. All investment earnings on amounts on deposit in the
Distribution Account or benefit from funds uninvested therein from time to time
shall be for the account of the Trustee. The Trustee shall be permitted to
withdraw 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 Trustee shall deposit the amount of the loss in the Distribution
Account. With respect to the Distribution Account and the funds deposited
therein, the Trustee shall take such action as may be necessary to ensure that
the Certificateholders shall be entitled to the priorities afforded to such a
trust account (in addition to a claim against the estate of the Trustee) as
provided by 12 U.S.C. ss. 92a(e), if applicable, or any applicable comparable
state statute applicable to state chartered banking corporations.

     Section 4.04. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT. (a) The Trustee will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to the Servicing
Agreements or as the Securities Administrator has instructed hereunder. The
Trustee may clear and terminate the Distribution Account pursuant to Section
10.01 and remove amounts from time to time deposited in error.

     (b) On each Distribution Date, the Trustee shall pay the Class R-X Float
Amount and the amount distributable to the Holders of the Certificates in
accordance with Section 6.01 from the funds in the Distribution Account. In
addition, on each Distribution Date, the Trustee shall pay to the Supplemental
PMI Insurer the Supplemental PMI Insurance Premium for such Distribution Date
from the funds in the Distribution Account.

     (c) On an ongoing basis, the Trustee shall withdraw from the Distribution
Account any expenses recoverable by the Trustee or the Securities Administrator
pursuant to Sections 7.01 and 9.05.

                                      -51-

<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 March 30, 2001 (the
"Depository Agreement"). Except for the Residual Certificates, the Private
Certificates and the Individual Certificates and as provided in Subsection
5.01(b), the Certificates shall at all times remain registered in the name of
the Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to a successor to the
Depository; (ii) ownership and transfers of registration of such Certificates on
the books of the Depository shall be governed by applicable rules established by
the Depository; (iii) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (iv) the Trustee shall
deal with the Depository as representative of such Certificate Owners of the
respective Class of Certificates for purposes of exercising the rights of
Certificateholders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (v) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.

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

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

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

     (c) (i) REMIC X will be evidenced by (x) the REMIC X Regular Interests,
which will be uncertificated and non-transferable and are hereby designated as
the "regular interests" in REMIC

                                      -52-

<PAGE>

X and (y) the Class R-X Certificates, which is hereby designated as the single
"residual interest" in REMIC X.

     The REMIC X Regular Interests and the Class R-X Certificates will have the
following designations and pass-through rates, and distributions of principal
and interest thereon shall be allocated in the following manner:

                                              Corresponding REMIC I
                                                 Regular Interest
                                                 ----------------
                                      Pass-       Allocation        Allocation
REMIC X     Initial Uncertificated   Through          of                of
Interest    Principal Balance ($)     Rate         Principal        Interest
--------    ---------------------    -------       ---------       ---------
IA          $   230,186,839.00         (1)         1A-1, 1C,        1A-1, 1C,
                                                     1B-A              1B-A
IB          $    61,177,271.00         (2)        1A-2, 1B-B        1A-2, 1B-B
IC          $    21,397,444.00         (3)        1A-3, 1B-C        1A-3, 1B-C
II          $ 1,494,436,035.00         (4)       2AB, 3A, 4A,      2AB, 3A, 4A,
                                                      5A                5A
R-X                        N/A         N/A            N/A              N/A
---------------
(1)   During each Interest Accrual Period, REMIC X Regular Interest IA will bear
interest at a variable Pass- Through Rate equal to the weighted average of the
Net Rates of the Mortgage Loans.

(2)   During each Interest Accrual Period, REMIC X Regular Interest IB will bear
interest at a variable Pass- Through Rate equal to the weighted average of the
Net Rates of the Group IB Mortgage Loans.

(3)   During each Interest Accrual Period, REMIC X Regular Interest IC will bear
interest at a variable Pass- Through Rate equal to the weighted average of the
Net Rates of the Group IC Mortgage Loans.

(4)   During each Interest Accrual Period, REMIC X Regular Interest II will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group II Mortgage Loans.

     Principal and interest shall be payable to, and shortfalls, losses and
prepayments are allocable to, the REMIC X Regular Interests in the same order
and priority as payments are to be made on, and shortfalls, losses and
prepayments are allocable to, the REMIC I Regular Interests.

     (ii) REMIC I will be evidenced by (x) the REMIC I Regular Interests, 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.

     The REMIC I Regular Interests and the Class R-I Certificates will have the
following designations and pass-through rates, and distributions of principal
and interest thereon shall be allocated in the following manner:

                                                      Corresponding Classes
                                                         of Certificates
                                                         ---------------

                                                       -53-

<PAGE>

                                        Pass-       Allocation        Allocation
REMIC I   Initial Uncertificated       Through          of                of
Interest  Principal Balance ($)         Rate         Principal        Interest
--------  ----------------------       -------       ---------        ---------
1A-1             219,828,300.00          (1)           I-A-1           I-A-1
1C                        50.00          (1)           R-II             R-II
1A-2              58,424,200.00          (2)           I-A-2           I-A-2
1A-3              20,434,500.00          (3)           I-A-3           I-A-3
2AB            1,009,888,735.00          (5)        II-A-1 and       II-A-1 and
                                                     Group II         Group II
                                                    Subordinate     Subordinate
3A               197,774,400.00          (5)          II-A-2A         II-A-2A
4A               140,914,200.00          (5)          II-A-2B         II-A-2B
5A               145,858,700.00          (5)          II-A-2C         II-A-2C
1B-A              10,358,439.00          (1)            (4)             (4)
1B-B               2,753,071.00          (2)            (4)             (4)
1B-C                 962,944.00          (3)            (4)             (4)
R-I                       50.00          (1)            N/A             N/A
---------------
(1)   During each Interest Accrual Period, REMIC I Regular Interests 1A-1, 1B-A
and 1C and the Class R-I Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group
I-1 Mortgage Loans.

(2)   During each Interest Accrual Period, REMIC I Regular Interests 1A-2 and
1B-B will bear interest at a variable Pass-Through Rate equal to the weighted
average of the Net Rates of the Group I-2 Mortgage Loans.

(3)   During each Interest Accrual Period, REMIC I Regular Interests 1A-3 and
1B-C will bear interest at a variable Pass-Through Rate equal to the weighted
average of the Net Rates of the Group I-3 Mortgage Loans.

(4)   The corresponding Classes of Certificates for these REMIC I Regular
Interests are all the Group I Subordinate Certificates. Principal and interest
shall be allocable to these Group I REMIC Regular Interests and shall be
apportioned among such REMIC I Regular Interests in the same order and priority
as payments are to be made to the Group I Subordinate Certificates; provided
however, the portion of the Group I Subordinate Certificates allocable to the
Group I-1 Mortgage Loans shall be allocated to REMIC I Regular Interest 1B-A,
the portion of the Group I Subordinate Certificates allocable to the Group I-2
Mortgage Loans shall be allocated to REMIC I Regular Interest 1B-B and the
portion of the Group I Subordinate Certificates allocable to the Group I-3
Mortgage Loans shall be allocated to REMIC I Regular Interest 1B-C.

(5)   During each Interest Accrual Period, REMIC I Regular Interests 2AB, 3A, 4A
and 5A will bear interest at a variable Pass-Through Rate equal to the weighted
average of the Net Rates of the Group II Mortgage Loans.

     Principal and interest shall be payable to, and shortfalls, losses and
prepayments are allocable to, the REMIC I Regular Interests in the same order
and priority as payments are to be made on, and shortfalls, losses and
prepayments are allocable to, the Corresponding Classes of Certificates.

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

                                      -54-

<PAGE>

forth in Section 5.01(d) and (y) the Class R-II Certificate, which is hereby
designated as the single "residual interest" in REMIC II.

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

      Designation      Initial Principal Amount         Pass-through Rate
      -----------      ------------------------         -----------------
          I-A-1           $    219,828,300.00                 (1)
          I-X-1           $   219,828,300.00*                0.506%
          I-A-2           $     58,424,200.00                 (2)
          I-A-3           $     20,434,500.00                 (3)
         II-A-1           $    980,000,000.00                 (4)
        II-A-2A           $    197,774,400.00                 (5)
        II-A-2B           $    140,914,200.00                 (6)
        II-A-2C           $    145,858,700.00                 (7)
         II-X-2           $  484,547,300.00**                  %
            R-I           $                50                 (8)
           R-II           $                50                 (8)
          I-B-1           $      4,691,500.00                 (9)
         II-B-1           $     11,955,500.00                 (10)
          I-B-2           $      3,909,400.00                 (9)
         II-B-2           $      5,230,500.00                 (10)
          I-B-3           $      2,033,000.00                 (9)
         II-B-3           $      5,230,500.00                 (10)
          I-B-4           $      1,407,500.00                 (9)
         II-B-4           $      4,483,300.00                 (10)
          I-B-5           $      1,094,600.00                 (9)
         II-B-5           $      1,494,400.00                 (10)
          I-B-6           $        938,455.00                 (9)
         II-B-6           $      1,494,535.00                 (10)
-------------
*    Notional Amount.
**   The Notional Amount of the Class II-X-2 Certificates shall consist of the
     sum of three components (i) the Current Principal Amount of the Class
     II-A-2A Certificates, which is equal to the Uncertificated Principal
     Balance of REMIC I Regular Interest 3A, (ii) the Current Principal Amount
     of the Class II-A-2B Certificates, which is equal to the Uncertificated
     Principal Balance of REMIC I Regular Interest 4A and (iii) the Current
     Principal Amount of the Class II-A-2C Certificates, which is equal to the
     Uncertificated Principal Balance of REMIC I Regular Interest 5A. The Class
     II-X-2 Certificates will bear interest (A) at a pass-through rate on

                                      -55-

<PAGE>

     the Notional Amount in clause (i) above equal to, up to the Mandatory
     Auction Distribution Date, 1.261% per annum, and 0.00% thereafter; (B) at a
     pass-through rate on the Notional Amount in clause (ii) above equal to, up
     to the Mandatory Auction Distribution Date, 1.061% per annum, and 0.00%
     thereafter; and (C) at a pass- through rate on the Notional Amount in
     clause (iii) above equal to, up to the Mandatory Auction Distribution Date,
     the greater of (x) zero and (y) (1) the weighted average net rate of the
     Group II Mortgage Loans over (2) the pass-through rate on the Class II-A-2C
     Certificates, and 0.00% thereafter.

(1)  The Class I-A-1 Certificates will bear interest at a variable Pass-Through
Rate equal to (a) the weighted average of the Net Rates of the Group I-1
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date (b) minus 0.506%. The
Pass-Through Rate with respect to the first Interest Accrual Period is expected
to be approximately 7.000% per annum.

(2)  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 I-2 Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balances of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date. The Pass-Through Rate with respect to
the first Interest Accrual Period is expected to be approximately 8.090% per
annum.

(3)  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 I-3 Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balances of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.
The Pass-Through Rate with respect to the first Interest Accrual Period is
expected to be approximately 8.125% per annum.

(4)  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 II Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balances of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.
The Pass-Through Rate with respect to the first Interest Accrual Period is
expected to be approximately 7.011% per annum.

(5)  On or prior to the Mandatory Auction Distribution Date, the Class II-A-2A
Certificates will bear interest at a variable pass-through rate equal to the
weighted average of the net rates of the Group II Mortgage Loans minus 1.261%.
After the Mandatory Auction Distribution Date, the Class II-A-2A Certificates
will bear interest at a variable pass-through rate equal to the weighted average
of the net rates of the Group II Mortgage Loans. The pass-through rate with
respect to the first interest accrual period is expected to be approximately
5.750% per annum.

(6)  On or prior to the Mandatory Auction Distribution Date, the Class II-A-2B
Certificates will bear interest at a variable pass-through rate equal to the
weighted average of the net rates of the Group II Mortgage Loans minus 1.061%.
After the Mandatory Auction Distribution Date, the Class II-A-2B Certificates
will bear interest at a variable pass- through rate equal to the weighted
average of the net rates of the Group II Mortgage Loans. The pass-through rate
with respect to the first interest accrual period is expected to be
approximately 5.950% per annum.

(7)  On or prior to the Mandatory Auction Distribution Date, the Class II-A-2C
Certificates will bear interest at a variable pass-through rate equal to the
lesser of (i) 5.950% and (ii) the weighted average of the net rates of the Group
II Mortgage Loans. After the Mandatory Auction Distribution Date, the Class
II-A-2C Certificates will bear interest at a variable pass-through rate equal to
the weighted average of the net rates of the Group II Mortgage Loans. The pass-
through rate with respect to the first interest accrual period is expected to be
approximately 5.950% per annum.

(8)  The Class R-I Certificates and Class R-II Certificates will bear interest
at a variable pass-through rate equal to the weighted average of the net rates
of the Group I-1 Mortgage Loans. The pass-through rate with respect to the first
interest accrual period is expected to be approximately 7.506% per annum.

(9)  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 REMIC I Regular Interest 1B and REMIC

                                      -56-

<PAGE>

I Regular Interest 2B, each weighted based on its Uncertificated Principal
Balance. The Pass-Through Rate with respect to the first Interest Accrual Period
is expected to be approximately 7.663% per annum.

(10)  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 will bear interest at a variable Pass-Through Rate
equal to the weighted average of the Group II Mortgage Loans. The Pass- Through
Rate with respect to the first Interest Accrual Period is expected to be
approximately 7.011% per annum.

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

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

     (g) 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.

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

                                      -57-

<PAGE>

minimum denominations of $25,000 and increments of $1.00 in excess thereof,
except that one Certificate of each such Class may be issued in a different
amount so that the sum of the denominations of all outstanding Certificates of
such Class shall equal the Current Principal Amount of such Class on the Closing
Date. The 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 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.

     (i) 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.

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

     (k) 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.

     (l) 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.

     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.

                                      -58-

<PAGE>

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

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

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

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

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

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

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

                                      -59-

<PAGE>

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

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

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

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

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

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

     (f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of such
Class as provided herein, the Trustee shall cancel such Individual Certificate
and shall (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

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<PAGE>

     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.

     (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.

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<PAGE>

     (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 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 5.03. 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

                                      -62-

<PAGE>

complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.

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

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

     (b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Seller an affidavit in the form attached
hereto as Exhibit E stating, among other things, that as of the date of such
transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any
person who is not a Permitted Transferee. The Tax Matters Person shall not
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made in the affidavit issued pursuant to the preceding sentence is
not true. Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer, sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Tax Matters Person or the Seller shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Subsection 5.05(b) or for making payments due on such
Residual Certificate to the purported Holder thereof or taking any other action
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

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<PAGE>

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 Trustee to act as its agent with respect
to all matters concerning the tax obligations of the Trust.

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

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

     Section 5.07. ERISA RESTRICTIONS. (a) Subject to the provisions of
subsection (b), no Mandatory Auction Certificates, Residual Certificates or
Private Certificates may be acquired directly or indirectly by, or on behalf of,
an employee benefit plan or other retirement arrangement which is subject to
Title I of ERISA and/or Section 4975 of the Code, unless the proposed transferee
provides either (i) the Trustee and the Master Servicer with an Opinion of
Counsel satisfactory to the Trustee and the Master Servicer, which opinion will
not be at the expense of the Trustee or the Master Servicer, that the purchase
of such Certificates by or on behalf of such Plan is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Trustee or the Master Servicer to any obligation in addition to those undertaken
in the Agreement or (ii) a representation or certification to the Trustee (upon
which the Trustee is authorized to rely) to the effect that the proposed
transfer and/or holding of such a Certificate and the servicing, management and
operation of the Trust: (I)

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<PAGE>

will not result in a prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code which is not covered under an individual or class
prohibited transaction exemption including but not limited to Department of
Labor Prohibited Transaction Exemption ("PTE") 84-14 (Class Exemption for Plan
Asset Transactions Determined by Independent Qualified Professional Asset
Managers); PTE 91-38 (Class Exemption for Certain Transactions Involving Bank
Collective Investment Funds); PTE 90-1 (Class Exemption for Certain Transactions
Involving Insurance Company Pooled Separate Accounts), PTE 95-60 (Class
Exemption for Certain Transactions Involving Insurance Company General
Accounts), and PTCE 96-23 (Class Exemption for Plan Asset Transactions
Determined by In-House Asset Managers and (II) will not subject the Seller, the
Securities Administrator, the Master Servicer or the Trustee to any obligation
in addition to those undertaken in the Agreement.

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

     (c) Neither the Trustee nor the Securities Administrator will be required
to monitor, determine or inquire as to compliance with the transfer restrictions
with respect to the Global Certificates. Any attempted or purported transfer of
any Certificate in violation of the provisions of Subsections (a) or (b) above
shall be void AB INITIO and such Certificate shall be considered to have been
held continuously by the prior permitted Certificateholder. Any transferor of
any Certificate in violation of such provisions, shall indemnify and hold
harmless the Trustee and the Master Servicer from and against any and all
liabilities, claims, costs or expenses incurred by the Trustee or the Master
Servicer as a result of such attempted or purported transfer. 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.

                                      -65-

<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 April 2001, in an aggregate amount equal to the sum of the
Available Funds and the Class R-X Float Amount for such Distribution Date.

     (i) On each Distribution Date, the Class R-X Float Amount shall be
     distributed to the holders of the Class R-X Certificates.

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

          (A) On each Distribution Date prior to the Group I Cross-Over Date,
          the Group I-1 Available Funds will be distributed in the following
          order of priority among the Group I-1 Senior Certificates:

               FIRST, to the Group I-1 Senior Certificates, on a PRO RATA basis,
               the Accrued Certificate Interest on such Class for such
               Distribution Date;

               SECOND, to the Group I-1 Senior Certificates, on a PRO RATA
               basis, any Accrued Certificate Interest thereon remaining
               undistributed from previous Distribution Dates, to the extent of
               remaining Group I-1 Available Funds;

               THIRD, to the Group I-1 Certificates in reduction of the Current
               Principal Amounts thereof, the Group I-1 Senior Optimal Principal
               Amount for such Distribution Date to the extent of remaining
               Group I-1 Available Funds, will be distributed to the Class R-I,
               Class R-II and Class I-A-1 Certificates, in that order, in
               reduction of the Current Principal Amounts thereof, until the
               Current Principal Amounts thereof have been reduced to zero;

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

               FIRST, to the Class I-A-2 Certificates, the Accrued Certificate
               Interest on such Class for such Distribution Date;

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

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<PAGE>

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

          (C) On each Distribution Date prior to the Group I Cross-Over Date,
          the Group I-3 Available Funds will be distributed to the Class I-A-3
          Certificates as follows:

               FIRST, to the Class I-A-3 Certificates, the Accrued Certificate
               Interest on such Class for such Distribution Date;

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

               THIRD, to the Class I-A-3 Certificates, in reduction of the
               Current Principal Amount thereof, the Class I-A-3 Optimal
               Principal Amount for such Distribution Date to the extent of
               remaining Group I-3 Available Funds, until the Current Principal
               Amount of the Class I-A-3 Certificates has been reduced to zero.

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

          (E) On each Distribution Date prior to the Group I Cross-Over Date,
          but after the reduction of the Current Principal Amount of the Group
          I-1, Class I-A-2 or Class I- A-3 Certificates to zero, the remaining
          Class or Classes of Group I Senior Certificates will be entitled to
          receive in reduction of their Current Principal Amounts, pro rata
          based upon their Current Principal Amounts immediately prior to such
          Distribution Date, in addition to any Principal Prepayments related to
          such remaining Group I Senior Certificates' respective Loan Group
          allocated to such Senior Certificates, 100% of the Principal
          Prepayments on any Mortgage Loan in the Loan Group relating to the
          fully repaid Class of Group I Senior Certificates; PROVIDED, HOWEVER,
          that if the weighted average Group I Subordinate Percentage equals or
          exceeds 9.00% on such Distribution Date, then the additional
          allocation of Principal Prepayments to the Group I Senior Certificates
          in accordance with this clause (E) will not be made.

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<PAGE>

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

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

          (A) On each Distribution Date prior to the Group II Cross-Over Date,
          the Group II Available Funds will be distributed in the following
          order of priority among the Group II Senior Certificates:

               FIRST, to the Group II Senior Certificates, on a PRO RATA basis,
               the Accrued Certificate Interest on such Class for such
               Distribution Date;

               SECOND, to the Group II Senior Certificates, on a PRO RATA basis,
               any Accrued Certificate Interest thereon remaining undistributed
               from previous Distribution Dates, to the extent of remaining
               Group II Available Funds;

               THIRD, to the Group II Certificates in reduction of the Current
               Principal Amounts thereof, the Group II Senior Optimal Principal
               Amount for such Distribution Date to the extent of remaining
               Group II Available Funds, will be distributed as follows:

               (i)  66.9148753338% of the lesser of (i) the Group II Senior
                    Optimal Principal Amount and (ii) the remaining Group II
                    Available Funds, will be distributed to the Class II-A-1
                    Certificates, in reduction of the Current Principal Amount
                    thereof, until the Current Principal Amount thereof has been
                    reduced to zero;

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<PAGE>

               (ii) 33.0851246662% of the lesser of (i) the Group II Senior
                    Optimal Principal Amount and (ii) the remaining Group II
                    Available Funds, will be distributed to the Class II-A-2A,
                    Class II-A-2B and Class II- A-2C Certificates, in that
                    order, in reduction of the Current Principal Amounts
                    thereof, until the Current Principal Amounts thereof have
                    been reduced to zero;

               (B) On each Distribution Date prior to the Group II Cross-Over
               Date, an amount equal to any remaining Group II Available Funds
               after the distributions in (A) 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 II Available
               Funds.

     (b) On each Distribution Date after the Group II Cross-Over Date,
distributions of principal on the outstanding Group II Senior Certificates
pursuant to clause THIRD of clause (a)(iii) will be made pro rata among all
Group II Senior Certificates, based upon the then Current Principal Amounts of
such Group II Senior Certificates, regardless of the allocation, or sequential
nature, of principal payments described in priority THIRD of clause (a)(iii)(A)
above, until the Current Principal Amounts thereof have been reduced to zero.

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

     (d) On each Distribution Date, any Group I 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-II Certificates;
provided that if on any Distribution Date there are any Group I-1, Group I-2 or
Group I-3 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 I Senior Certificates, PRO RATA, based
upon their Current Principal Amounts, until all amounts due to all Classes of
Group I Senior Certificates have been paid in full, before any amounts are
distributed to the Class R-II Certificates. On each Distribution Date, any Group
II Available Funds remaining after payment of interest and principal as
described above will be distributed to the Class R-II Certificates.

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

     (f) If on any Distribution Date the Available Funds for the Senior
Certificates in any Certificate Group is less than the Accrued Certificate
Interest on the related Senior Certificates for such Distribution Date prior to
reduction for Net Interest Shortfall and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
Senior

                                      -69-

<PAGE>

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

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

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

          (b) (i) With respect to any Certificates on any Distribution Date, the
     principal portion of each Realized Loss on a Group I 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;

               seventh, if such loss is on a Group I-1, Group I-2 or Group I-3
          Mortgage Loan, to the Class I-A-1, Class I-A-2 and Class I-A-3
          Certificates, respectively.

               eighth, to the Group I Senior Certificates (other than the Group
          I Interest Only Certificates), on a PRO RATA basis.

                                      -70-

<PAGE>

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

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

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

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

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

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

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

               seventh, to the Group II Senior Certificates (other than the
          Group II Interest Only 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 I-1 Senior Certificates or Group II Senior
Certificates pursuant to clauses (b) or (c) above after the Group I Cross-Over
Date or Group II Cross-Over Date, respectively, shall be allocated to such
Senior Certificates and the most subordinate Class or Classes of Group II
Subordinate Certificates and Group I Subordinate Certificates, respectively, on
a pro rata basis, based on the Current Principal Amount of such Certificates, in
reduction of the Current Principal Amounts thereof until reduced to zero, with
any such loss allocable to such 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.

                                      -71-

<PAGE>

     (g) 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.

     (h) On each Distribution Date, the Trustee shall determine the Group I and
Group II Subordinate Certificate Writedown Amount. Any such Subordinate
Certificate Writedown Amount shall effect a corresponding reduction in the
Current Principal Amount of (i) if prior to the Group I Cross-Over Date, the
Current Principal Amounts of the Group I Subordinate Certificates, in the
reverse order of their numerical Class designations, (ii) if prior to the Group
II Cross-Over Date, the Current Principal Amounts of the Group II Subordinate
Certificates, in the reverse order of their numerical Class designations, (iii)
from and after the Group I Cross-Over Date, the Group I Senior Certificates
(other than the Group I Interest Only Certificates) which reduction shall occur
on such Distribution Date after giving effect to distributions made on such
Distribution Date and (iv) from and after the Group II Cross-Over Date, the
Group II Senior Certificates (other than the Group II Interest Only
Certificates) which reduction shall occur on such Distribution Date after giving
effect to distributions made on such Distribution Date.

     (i) 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 I Mortgage Loans or Group II Mortgage
Loans occurring on or prior to the Group I Cross-Over Date or Group II
Cross-Over Date, respectively, will not be allocated among any Certificates, but
will reduce the amount of Group I Available Funds or Group II Available Funds,
respectively, on the related Distribution Date. As a result of the subordination
of the Group I Subordinate Certificates and Group II Subordinate Certificates in
right of distribution, such Realized Losses on the Group I Mortgage Loans and
Group II Mortgage Loans will be borne by the Group I Subordinate Certificates
and Group II Subordinate Certificates, respectively, in inverse order of their
numerical Class designations. Following the Group I Cross- Over Date, the
interest portion of Realized Losses on the Group I Mortgage Loans will be
allocated to the Group I Senior Certificates. Following the Group II Cross-Over
Date, the interest portion of Realized Losses on the Group II Mortgage Loans
will be allocated to the Group II Senior Certificates.

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

                                      -72-

<PAGE>

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

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

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

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

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

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

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

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

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

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

          (ix) the aggregate amount of any Realized Losses (listed separately
     for each category of Realized Loss and for each Loan Group) during the
     related Prepayment Period

                                      -73-

<PAGE>

     and cumulatively since the Cut-off Date and the amount and source
     (separately identified) of any distribution in respect thereof included in
     such distribution;

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

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

          (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, aggregate Outstanding Principal
     Balance and aggregate Scheduled 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;

                                      -74-

<PAGE>

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

          (xix) the then applicable Group I-1, Class I-A-2, Class I-A-3 and
     Group II Senior Percentage, Group I-1, Class I-A-2, Class I-A-3 and Group
     II Senior Prepayment Percentage, Group I-1, Class I-A-2, Class I-A-3 and
     Group II Subordinate Percentage and Group I-1, Class I-A-2, Class I-A-3 and
     Group II Subordinate Prepayment Percentage;

          (xx) any Diverted Amount for such Distribution Date;

          (xxi) the Stop-Loss Amount as of the Cut-off Date, the Stop-Loss
     Amount as of the end of the related Prepayment Period and reduction in the
     Stop-Loss Amount during the related Prepayment Period; and

          (xxii) with respect to the related Prepayment Period, (i) the number
     of Mortgage Loans for which a payment was made by the Supplemental PMI
     Insurer under the Supplemental PMI Policy and the aggregate amount of any
     such payments, (ii) the number of Mortgage Loans for which a claim has been
     presented to the Supplemental PMI Insurer under the Supplemental PMI Policy
     and the aggregate amount of any such outstanding claims, and (iii) the
     number of Mortgage Loans for which a claim was presented to the
     Supplemental PMI Insurer under the Supplemental PMI Policy which claim was
     denied by the Supplemental PMI Insurer and the aggregate amount of any such
     denied claims.

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

     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 2001, the Securities
Administrator will furnish a report to the Trustee and 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 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

                                      -75-

<PAGE>

substantially comparable information shall be provided by the Securities
Administrator pursuant to the requirements of the Code.

     Section 6.05. MONTHLY ADVANCES. Pursuant to Section 11.17 of the Servicing
Agreements, the Master Servicer shall make Monthly Advances. On the Business Day
prior to each Servicer Remittance Date, if a Mortgage Loan is delinquent as of
the immediately preceding Determination Date, the Master Servicer will be
obligated to make a Monthly Advance by deposit into the Custodial Account,
except to the extent the Master Servicer determines any such advance to be
nonrecoverable from Liquidation Proceeds, Insurance Proceeds or from future
payments on the Mortgage Loan for which the advance was made. In the event the
Master Servicer fails to remit the required Monthly Advance by two (2) Business
Days after the related Servicer Remittance Date, the Trustee shall terminate the
Master Servicer in accordance with Section 13.01 of the related Servicing
Agreement, and, as successor Master Servicer, make the Monthly Advance with
respect to that Mortgage Loan. The Trustee shall be reimbursed for any Monthly
Advance in the same manner that the Master Servicer would be reimbursed for a
Monthly Advance, in accordance with the related Servicing Agreement.

                                      -76-

<PAGE>

                                   ARTICLE VII

                                 Indemnification

     Section 7.01. INDEMNIFICATION OF THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR. 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 or the Securities Administrator and the
termination of this Agreement.

                                      -77-

<PAGE>

                                  ARTICLE VIII

                                     Default

     Section 8.01. EVENTS OF DEFAULT. In each and every case, so long as an
Event of Default with respect to the Master Servicer shall not have been
remedied, the Trustee may, and upon request of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
principal of the Trust Fund, the Trustee shall by notice in writing to the
Master Servicer, with a copy to the Rating Agencies, terminate all of the rights
and obligations (but not the liabilities) of the Master Servicer under the
Servicing Agreements and in and to the Mortgage Loans and/or the REO Property
serviced by the Master Servicer and the proceeds thereof.

     Section 8.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the
termination of the Master Servicer under the Servicing Agreements, the Trustee
shall automatically become the successor in all respects to the Master Servicer
in its capacity under the Servicing Agreements and the transactions set forth or
provided for therein 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 thereof;
PROVIDED, HOWEVER, it is understood and acknowledged that by the parties hereto
that there will be a period of transition (not to exceed 90 days) before the
transfer of servicing obligations is fully effected and that the Trustee (i)
shall be under no obligation to purchase any Mortgage Loan; and (ii) shall have
no obligation whatsoever with respect to any liability (other than advances
deemed recoverable and not previously made) incurred by the Master Servicer at
or prior to the time of termination. As compensation therefor, the Trustee shall
be entitled to all funds relating to the Mortgage Loans which the Master
Servicer would have been entitled to retain if the Master Servicer had continued
to act hereunder, except for those amounts due the Master Servicer as
reimbursement for advances previously made or expenses previously incurred.
Notwithstanding the above, the Trustee may, if it shall be unwilling so to act,
or shall, if it is legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution which is a Fannie Mae or Freddie Mac-approved servicer having a net
worth of not less than $25,000,000 and which has the qualifications required
under the related Servicing Agreement, as the successor to the Master Servicer
under the Servicing Agreements in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under the
Servicing Agreements. 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 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 and the Servicing Agreements, as shall be
necessary to effectuate any such succession.

     The termination of the rights and obligations of the Master Servicer shall
not affect any obligations incurred by the Master Servicer prior to such
termination. Notwithstanding anything in

                                      -78-

<PAGE>

this Agreement to the contrary, the Trustee shall be entitled to be reimbursed
by the Master Servicer (or by the Trust Fund if the Master Servicer is unable to
fulfill its obligations hereunder) for all costs incurred by the Trustee in
connection or associated with the transfer of servicing from the Master Servicer
to a successor Master Servicer (whether or not the Trustee is the successor
Master Servicer), including, without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction and/or manipulation of such servicing data as may be required to
correct any errors or insufficiencies in the servicing data provided by the
Master Servicer or as otherwise may be require to enable the successor Master
Servicer (including the Trustee) to service the Mortgage Loans properly and
effectively in accordance with the provisions of this Agreement.

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

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

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

     Section 8.05. LIST OF CERTIFICATEHOLDERS. Upon written request of three or
more Certificateholders of record, for purposes of communicating with other
Certificateholders with 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.

                                      -79-

<PAGE>

                                   ARTICLE IX

             Concerning the Trustee and the Securities Administrator

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

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

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

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

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

                                      -80-

<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) Neither the Securities Administrator nor the Trustee shall be
     responsible for the acts or omissions of the other, it being understood
     that this Agreement shall not be construed to render them partners, joint
     venturers or agents of one another.

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

                                      -81-

<PAGE>

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

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

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

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

          (ii) The Trustee 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,

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     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 the Master
     Servicer, which consent will not be unreasonably withheld. Neither the
     Trustee nor the Securities Administrator shall be liable or responsible for
     the misconduct or negligence of any of the Trustee's or the Securities
     Administrator's agents or attorneys or a custodian or paying agent
     appointed hereunder by the Trustee or the Securities Administrator with due
     care and, when required, with the consent of the Master Servicer;

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

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

          (ix) Neither the Trustee nor the Securities Administrator shall be
     required to give any bond or surety with respect to the execution of the
     trust created hereby or the powers granted hereunder, except as provided in
     Subsection 9.07; and

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

     Section 9.03. TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR MORTGAGE LOANS. The recitals contained herein and in the
Certificates (other than the signature and

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<PAGE>

countersignature of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and neither the Trustee nor the Securities
Administrator shall have any responsibility for their correctness. Neither the
Trustee nor the Securities Administrator makes any representation as to the
validity or sufficiency of the Certificates (other than the signature and
countersignature of the Trustee on the Certificates) or of any Mortgage Loan
except as expressly provided in Sections 2.02 and 2.05 hereof; provided,
however, that the foregoing shall not relieve the Trustee of the obligation to
review the Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's
signature and countersignature (or countersignature of its agent) on the
Certificates shall be solely in its capacity as Trustee and shall not constitute
the Certificates an obligation of the Trustee in any other capacity. Neither the
Trustee or the Securities Administrator shall be accountable for the use or
application by the Seller of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Seller with
respect to the Mortgage Loans. Subject to the provisions of Section 2.05,
neither the Trustee nor the Securities Administrator shall not be responsible
for the legality or validity of this Agreement or any document or instrument
relating to this Agreement, the validity of the execution of this Agreement or
of any supplement hereto or instrument of further assurance, or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
hereunder or intended to be issued hereunder. Neither the Trustee nor the
Securities Administrator shall at any time have any responsibility or liability
for or with respect to the legality, validity and enforceability of any Mortgage
or any Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Fund or its ability to generate the payments to be
distributed to Certificateholders, under this Agreement. Neither the Trustee nor
the Securities Administrator shall have any responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to record this Agreement other than any continuation
statements filed by the Trustee pursuant to Section 3.04.

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

     Section 9.05. TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND EXPENSES.
The fees of the Trustee shall be paid in accordance with the provisions of this
Agreement and the Trustee shall be responsible for payment of the Securities
Administrator's fees. In addition, the Trustee and the Securities Administrator
will be entitled to recover from the Certificate Account pursuant to Section
4.02(b) all reasonable out-of-pocket expenses, disbursements and advances and
the expenses of the Trustee and the Securities Administrator, respectively, in
connection with any Event of Default, any breach of this Agreement or any claim
or legal action (including any pending or threatened claim or legal action)
incurred or made by the Trustee or the Securities Administrator, respectively,
in the administration of the trusts hereunder (including the reasonable
compensation, expenses and disbursements of its counsel) except any such
expense, disbursement or advance as may arise from its negligence or intentional
misconduct or which is the responsibility of the Certificateholders or the Trust
Fund hereunder. If funds in the Certificate Account are insufficient therefor,
the Trustee and the Securities Administrator shall recover such expenses from
the Seller. Such compensation

                                      -84-

<PAGE>

and reimbursement obligation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust.

     Section 9.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
ADMINISTRATOR. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by 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 9.10, rated in one of the two highest long-term
debt categories of, or otherwise acceptable to, each of the Rating Agencies.
Neither the Trustee nor the Securities Administrator shall be an Affiliate of
the Master Servicer, unless the Trustee acts as successor Master Servicer
hereunder. If the Trustee publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 9.06 the combined capital and
surplus of such corporation shall be deemed to be its total equity capital
(combined capital and surplus) as set forth in its most recent report of
condition so published. In case at any time the Trustee or the Securities
Administrator shall cease to be eligible in accordance with the provisions of
this Section 9.06, the Trustee or the Securities Administrator shall resign
immediately in the manner and with the effect specified in Section 9.08.

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

     Section 9.08. RESIGNATION AND REMOVAL OF THE TRUSTEE AND SECURITIES
ADMINISTRATOR. (a) The Trustee and the Securities Administrator may at any time
resign and be discharged from the Trust hereby created by giving written notice
thereof to the Seller and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Seller shall promptly
appoint a successor Trustee or successor Securities Administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee or Securities Administrator,
as applicable, and 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.

                                      -85-

<PAGE>

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

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

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

     (e) No resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 9.08 shall become
effective except upon the simultaneous appointment of and acceptance of a
successor Auction Administrator as provided in Section 11.03.

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

                                      -86-

<PAGE>

for more fully and certainly vesting and confirming in the successor Trustee or
Securities Administrator, as applicable, all such rights, powers, duties and
obligations.

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

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

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

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

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

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

     (d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or

                                      -87-

<PAGE>

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

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

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

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

     Section 9.12. FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS; REMIC ADMINISTRATION. (a) For federal income tax purposes,
the taxable year of each of REMIC X, REMIC I and REMIC II shall be a calendar
year and the Trustee 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 X, REMIC I and REMIC II, 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 15% CPR). In
connection with the foregoing, the Securities Administrator shall timely prepare
and file, and the Trustee shall sign, IRS Form 8811, which shall provide the
name and address of the person who can be contacted to obtain information
required to be reported to the holders of regular interests in each of REMIC X,
REMIC I and REMIC

                                      -88-

<PAGE>

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

     (c) The 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 X, REMIC I and REMIC II or
the Trust Fund.

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

     (f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Seller for any taxes and costs including, without limitation,
any reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Company or the Master Servicer, as a result of a

                                      -89-

<PAGE>

breach of the Trustee's covenants and the Securities Administrator's covenants,
respectively, set forth in this Section 9.12, but neither the Trustee nor the
Securities Administrator shall be liable or 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.

     Section 9.13. MAINTENANCE OF SUPPLEMENTAL PMI POLICY; COLLECTIONS
THEREUNDER. (a) The Trustee and the Securities Administrator shall cooperate
with the Supplemental PMI Insurer and shall use its best efforts to furnish to
the Supplemental PMI Insurer all reasonable information in the possession of the
Trustee or the Securities Administrator, respectively, or to which the Trustee
or the Securities Administrator, respectively, has access with respect to each
Mortgage Loan.

     (b) In the event of a default by the Supplemental PMI Insurer under the
Supplemental PMI Policy (a "Replacement Event"), the Trustee shall use its best
efforts to obtain a substitute lender-paid primary mortgage insurance policy (a
"Substitute Supplemental PMI Policy"); PROVIDED, HOWEVER, that the Trustee shall
not be obligated, and shall have no liability for failing, to obtain a
Substitute Supplemental PMI Policy unless such Substitute Supplemental PMI
Policy can be obtained on the following terms and conditions: (i) the
Certificates shall be rated no lower than the rating assigned by each Rating
Agency to the Certificates immediately prior to such Replacement Event, as
evidenced by a letter from each Rating Agency addressed to the Seller, the
Master Servicer and the Trustee, (ii) the timing and mechanism for drawing on
such new Substitute Supplemental PMI Policy shall be reasonably acceptable to
the Master Servicer and the Trustee and (iii) the premiums under the proposed
Substitute Supplemental PMI Policy shall not exceed such premiums under the
existing Supplemental PMI Policy.

     (c) Pursuant to Section 4.01 hereof, any amounts collected by the Trustee
under the Supplemental PMI Policy shall be deposited in the Certificate Account,
subject to withdrawal pursuant to Section 4.02 hereof.

     (d) On each Distribution Date, the Securities Administrator shall provide
to the Supplemental PMI Insurer an electronic file containing the loan number
and outstanding principal balance of each Mortgage Loan covered by the
Supplemental PMI Policy.

     (e) The Securities Administrator shall provide upon request by the
Depositor or the Rating Agencies without charge copies of any reports provided
to the Securities Administrator by the Master Servicer or the Supplemental PMI
Insurer with respect to the Mortgage Loans covered by the Supplemental PMI
Policy. The Securities Administrator shall also provide such reports to any
Certificateholder provided that the reasonable expenses incurred by the
Securities Administrator in providing such reports (including postage and
copying costs) are paid by such Certificateholder.

                                      -90-

<PAGE>

                                    ARTICLE X

                                   Termination

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

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

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

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

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

                                      -91-

<PAGE>

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

     (e) If the option of the Seller to repurchase or cause the repurchase of
all the Mortgage Loans under Subsection 10.01 (a)(i) above is exercised, the
Seller and/or its designee shall deliver to the Trustee for deposit in the
Certificate 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 X, REMIC I and REMIC II. 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 I Mortgage Loans are not sufficient to pay all of the Group
I Certificates in full, any such deficiency will be allocated first, to the
Group I Subordinate Certificates, in inverse order of their numerical
designation, and then to the Group I Senior Certificates on a PRO RATA basis. If
the proceeds with respect to the Group II Mortgage Loans are not sufficient to
pay all of the Group II Certificates in full, any such deficiency will be
allocated first, to the Group II Subordinate Certificates, in inverse order of
their numerical designation, and then to the Group II Senior Certificates on a
PRO RATA basis. Upon deposit of the required repurchase price and following such
final Distribution Date, the Trustee shall release promptly to the Seller and/or
its designee the Mortgage Files for the remaining applicable Mortgage Loans, and
the Accounts with respect thereto shall terminate, subject to the Trustee's
obligation to hold any amounts payable to Certificateholders in trust without
interest pending final distributions pursuant to Subsection 10.01(g). Any other
amounts remaining in the Accounts will belong to the Seller. Upon deposit of the
required repurchase price and following such final Distribution Date, the
Trustee shall release promptly to the Seller and/or its designee, as the case
may be, the Mortgage Files for the remaining Mortgage Loans, and the Accounts
with respect thereto shall terminate, subject to the Trustee's obligation to
hold any amounts payable to Certificateholders in trust without interest pending
final distributions pursuant to Subsection 10.01(f).

     (f) In the event that this Agreement is terminated by reason of the payment
or liquidation of all Mortgage Loans or the disposition of all property acquired
with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above, the
Master Servicer shall deliver to the Trustee for deposit in the Certificate
Account all distributable amounts remaining in their Protected Accounts. Upon
the presentation and surrender of the Certificates, the Trustee shall distribute
to the remaining

                                      -92-

<PAGE>

Certificateholders, in accordance with their respective interests, all
distributable amounts remaining in the Certificate 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
Certificate Account shall terminate, subject to the Trustee's obligation to hold
any amounts payable to the Certificateholders in trust without interest pending
final distributions pursuant to this Subsection 10.01(f).

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

     Section 10.02. ADDITIONAL TERMINATION REQUIREMENTS. (a) If the option of
the Seller to repurchase all the Mortgage Loans under Subsection 10.01(a)(i)
above is exercised, the Trust Fund and each of REMIC X, REMIC I and REMIC II
shall be terminated in accordance with the following additional requirements,
unless the Trustee has been furnished with an Opinion of Counsel to the effect
that the failure of the Trust to comply with the requirements of this Section
10.02 will not (i) result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code on each of REMIC X, REMIC I
and REMIC II or (ii) cause any REMIC to fail to qualify as a REMIC at any time
that any Regular Certificates are outstanding:

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

     (b) By their acceptance of the Residual Certificates, the Holders thereof
hereby (i) agree to adopt such a plan of complete liquidation of the REMIC upon
the written request of the Seller and 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

                                      -93-

<PAGE>

appropriate statement on the final tax return of each REMIC. Upon complete
liquidation or final distribution of all of the assets of the Trust Fund, the
Trust Fund and each of REMIC X, REMIC I and REMIC II shall terminate.

                                      -94-

<PAGE>

                                   ARTICLE XI

                          Mandatory Auction Provisions

     Section 11.01. 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.

     Section 11.02. 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 11.03. 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 11.03 and Article IX. Any successor Auction Administrator shall
meet the requirements of a successor Trustee under this Agreement.

     Section 11.04. 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.

     Section 11.05. MANDATORY AUCTION CERTIFICATES. Except for the occurrence of
a Swap Termination Event, the Holder of each Mandatory Auction Certificate
hereby agrees to tender its

                                      -95-

<PAGE>

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.

                                      -96-

<PAGE>

                                   ARTICLE XII

                            Miscellaneous Provisions

     Section 12.01. INTENT OF PARTIES. The parties intend that each of REMIC X,
REMIC I and REMIC II 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 12.02. AMENDMENT. (a) This Agreement may be amended from time to
time by the Seller, the Securities Administrator and the Trustee, and the
Servicing Agreements may be amended from time to time by 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,
adversely affect in any material respect the interests of any Certificateholder
and PROVIDED, FURTHER, that any amendment to Article XI of this Agreement shall
also require the consent of the Auction Administrator.

     (b) This Agreement may also be amended from time to time by the Seller, the
Securities Administrator and the Trustee, and the Servicing Agreements may also
be amended from time to time by the Master Servicer and the Trustee, with the
consent of the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund or of the applicable Class or
Classes, if such amendment affects only such Class or Classes, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Certificateholders; PROVIDED, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) reduce the aforesaid
percentage of Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all Certificates then
outstanding, or (iii) cause REMIC X, REMIC I or REMIC II 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 any amendment to Article XI 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 12.02(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.

                                      -97-

<PAGE>

     (d) In the case of an amendment under Subsection 12.02(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 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 12.03. 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 12.04. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (a) The death or
incapacity of any Certificateholder shall not terminate this Agreement or the
Trust, nor entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.

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

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

                                      -98-

<PAGE>

     (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 12.04, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

     Section 12.05. 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 12.05.

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

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

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

     (e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator, the Seller, the
Master Servicer or any Affiliate thereof shall be disregarded, except as
otherwise provided in Section 12.02(b) and except that, in determining whether
the Trustee shall be protected

                                      -99-

<PAGE>

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, or the Master Servicer, as the case may
be.

     Section 12.06. 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 12.07. NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the Seller,
245 Park Avenue, New York, New York 10167, Attention: Vice President-Servicing,
telecopier number: (212) 272-5591, or to such other address as may hereafter be
furnished to the other parties hereto in writing; (ii) in the case of the
Trustee, at its Corporate Trust Office, or such other address as may hereafter
be furnished to the other parties hereto in writing; (iii) in the case of the
Auction Administrator, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iv) in the
case of the Securities Administrator, at its Corporate Trust Office with a copy
to 11000 Broken Land Parkway, Columbia, Maryland 21044 (Attention: BART 01-2),
or such other address as may hereafter be furnished to the other parties hereto
in writing; or (v) in the case of the Rating Agencies, Fitch, Inc., One State
Street Plaza, 32nd Floor, New York, New York 10004, Moody's Investors Service,
Inc., 99 Church Street, 4th Floor, New York, New York 10004, and Standard &
Poor's, a division of the McGraw-Hill Companies, Inc., 55 Water Street, 41st
Floor, New York, New York, 10041, Attention: Residential Mortgage Surveillance.
Any notice delivered to the Seller, the Master Servicer, the Securities
Administrator or the Trustee under this Agreement shall be effective only upon
receipt. Any notice required or permitted to be mailed to a Certificateholder,
unless otherwise provided herein, shall be given by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given when mailed, whether or
not the Certificateholder receives such notice.

     Section 12.08. 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 12.09. 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.

                                      -100-

<PAGE>

     Section 12.10. 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 12.11. 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 12.12. 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 Certificate Account.

                                      -101-

<PAGE>

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

                                  STRUCTURED ASSET MORTGAGE
                                  INVESTMENTS INC., as Seller

                                  By:__________________________________
                                     Name:
                                     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 Securities Administrator

                                  By:__________________________________
                                     Name:
                                     Title:

Accepted and Agreed as to
 Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c)

EMC MORTGAGE CORPORATION

By:_______________________________________
   Name:
   Title:

<PAGE>

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

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

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

                                  _________________________________________
                                                  Notary Public
[Notarial Seal]

<PAGE>

STATE OF                     )
                             ) ss.:
COUNTY OF                    )

     On the 30th day of March, 2001 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                     )
                             ) ss.:
COUNTY OF                    )

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

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

                                  _________________________________________
                                                  Notary Public

[Notarial Seal]

<PAGE>

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

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

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

                                  _________________________________________
                                                  Notary Public

[Notarial Seal]Exhibit 10.9

                                                       [Version reflecting 2000
                                                        Amendment to this Plan
                                                        as of May 23, 2000.]

                              RADICA GAMES LIMITED

                              AMENDED AND RESTATED

                             1994 STOCK OPTION PLAN

         This amended and restated 1994 Stock Option Plan, dated as of May 19,
1994, is intended to amend and restate in its entirety the 1994 Stock Option
Plan adopted by the Board of Directors on April 17, 1994, and further reflects
the 1997, 1998 and 2000 Amendments to such Plan as of April 9, 1997, April 6,
1998 and May 23, 2000.

1.    PURPOSE OF THE 1994 STOCK OPTION PLAN (THE "1994 PLAN").

         The 1994 Plan is intended to promote the growth and general prosperity
of Radica Games Limited (the "Company") and its Subsidiaries and Affiliates (as
defined below) by attracting and retaining the best available personnel for
positions of substantial responsibility and by providing directors and certain
key employees with an additional incentive to contribute to the success of the
Company and its Subsidiaries and Affiliates. For purposes of the 1994 Plan,
"Subsidiary" shall mean any corporation of which the Company owns, directly or
indirectly, stock possessing not less than a majority of the total combined
voting power of all classes of stock in such corporation and "Affiliate" means
any corporation controlled by any combination of the Company and its
shareholders.

2.    ADMINISTRATION.

         The 1994 Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board") consisting of
at least two members of the Board. Members of the Committee shall be
disinterested persons within the meaning of Rule 16b-3(c)(2)(i) of the
Securities Exchange Act of 1934 (the "Exchange Act"). Subject to the provisions
of the 1994 Plan, the Committee shall have sole authority, in its absolute
discretion, to determine which of the eligible directors and employees of the
Company, its Subsidiaries and Affiliates shall receive

<PAGE>

stock options, the time when stock options shall be granted, the terms of such
options, and the number of shares for which options shall be granted. The
Committee shall have the authority to do everything necessary or appropriate to
administer the 1994 Plan including, without limitation, interpreting the 1994
Plan. All decisions, determinations and interpretations of the Committee shall
be final and binding on all optionees.

         Notwithstanding any other provision of the 1994 Plan, the members, from
time to time, of the Committee shall be ineligible to receive stock options,
except to the following extent and on the following terms:

              From and after the annual meeting of stockholders in 2000, upon
         re-election to the Board of Directors, each such member will receive
         non-qualified stock options to purchase 2,500 shares per quarter (i.e.,
         10,000 shares per annum) of Common Stock of the Company at an exercise
         price equal to the then current market price of the Company's Common
         Stock and exercisable after one year from the date of the grant. The
         term "market price" shall mean the closing price per share of the
         Company's Common Stock on the date immediately prior to the date of the
         grant. The term "closing price" shall mean the last reported sales
         price or, in case no such reported sale takes place on such date, the
         average of the reported closing bid and asked prices on the National
         Association of Securities Dealers Automated Quotations National Market
         System ("NASDAQ"), provided, that if such shares are not quoted on
         NASDAQ, the net book value per share as determined in accordance with
         United States generally accepted accounting principles. Each option
         granted pursuant to this provision shall expire ten years from the date
         the option is granted. With respect to the options granted to the
         members of the Committee, the full Board of Directors, excluding such
         Committee members, shall have the authority to do everything necessary
         or appropriate to administer or interpret the 1994 Plan.

         The provisions contained in the preceding two paragraphs shall not be
amended more than once every six months, other than to comport with changes in
the Internal Revenue Code, the Employee Retirement Income Security Act, or the
rules thereunder.

                                       -2-

<PAGE>

3.    ELIGIBILITY.

         The Committee may grant stock options to any director, key employee or
officer of the Company or any Subsidiary or any Affiliate unless such person is
a member of the Committee.

4.    STOCK SUBJECT TO THE 1994 PLAN.

         The stock subject to the options and other provisions of the 1994 Plan
shall be shares of the Company's authorized and unissued or reacquired Common
Stock. Subject to Section 8 hereof, the total number of shares of the Company's
Common Stock that may be purchased pursuant to stock options under the 1994 Plan
shall not exceed in the aggregate 3,700,000 shares.

5.    TERMS AND CONDITIONS OF OPTIONS.

         All stock options granted pursuant to the 1994 Plan shall be in such
form as the Committee shall from time to time determine and shall be subject to
the following terms and conditions:

         (a)  Price:

                   The option price per share with respect to each option shall
          be determined by the Committee but shall be not less than 100% of the
          fair market value of the Company's Common Stock on the date the option
          is granted as determined by the Committee.

         (b)  Term:

                   Each stock option shall expire no later than ten years from
          the date the option is granted.

         (c)  Exercise and Payment for Shares:

                   Subject to Section 7 hereof, stock options shall be
          exercisable on such dates as the Committee may specify at the time of
          grant. The Committee may, in its discretion, accelerate in whole or in
          part the exercisability of any outstanding stock options. In no

                                       -3-

<PAGE>

          event (including those specified in Section 7) shall any stock option
          be exercisable after the expiration of ten years from the date on
          which the stock option is granted.

         To exercise a stock option, the optionee shall give written notice to
the Company specifying the number of shares to be purchased and accompanied by
payment either (i) in cash or by a certified or official bank check, (ii)
through the delivery of shares of Common Stock of the Company with a value equal
to the total option price, or (iii) by a combination of the methods described in
(i) and (ii) for the full purchase price therefor. The value of a share of
Common Stock of the Company delivered in accordance with the above shall be the
average of the closing price on each of the five business days immediately prior
to the date of delivery. The closing price for each day shall be the last
reported sales price or, in case no such reported sale takes place on such day,
the average of the reported closing bid and asked prices on NASDAQ, provided,
that if such shares are not quoted on NASDAQ during such five-day period only
the method described in (i) above may be used to make payment for the purchase
price of any such stock option. Any person exercising a stock option shall make
such representations and agreements and furnish such information as the
Committee may in its discretion deem necessary or desirable to assure compliance
by the Company, on terms acceptable to the Company, with the provisions of the
Securities Act of 1933 and any other applicable legal requirements. Each stock
option granted under the 1994 Plan shall be subject to the requirement that the
listing, registration or qualification of the shares subject thereto upon any
securities exchange or under state or federal law, or the consent or approval of
any governmental regulatory body, are necessary or desirable in connection with
the issue or purchase of the shares subject thereto, no such option may be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee. If an optionee so requests, shares purchased
may be issued in the name of the optionee and another jointly with the right of
survivorship.

                                       -4-

<PAGE>

6.    NON-TRANSFERABILITY.

         Stock options under the 1994 Plan may not be sold, pledged, assigned or
transferred in any manner otherwise than by will or the laws of descent or
distribution, and may be exercised during the lifetime of a holder of a stock
option only by such holder.

7.    EXERCISE UPON TERMINATION OR DEATH.

      (a) No stock option granted under the 1994 Plan may be exercised at any
      time after the termination of employment or director status, as the case
      may be, of a holder with the Company or any Subsidiary or any Affiliate,
      except that:

          (i)  if such termination of employment or director status, as the case
               may be, is on or after the holder's 62nd birthday or due to
               disability, any portion of an option, whether or not exercisable
               at the time of such termination, may be exercised by the holder
               within ninety days after such termination (or such longer period
               as may be designated by the Committee); and

          (ii) if such termination of employment or director status, as the case
               may be, is prior to the holder's 62nd birthday and not due to
               disability or death, any portion of an option may be exercised by
               the holder within ninety days of such termination (or such longer
               period as may be designated by the Committee), but only to the
               extent such option was exercisable at the time of such
               termination.

      (b) In the event of the death of the holder, whether during or after the
      termination of his employment or director status, as the case may be, any
      portion of an option exercisable at the time of death may be exercised by
      the holder's beneficiary or estate within twelve months from the date of
      the holder's death or such longer period as the Committee may determine.

                                       -5-

<PAGE>

      (c) Notwithstanding this Section 7, in no event shall any stock option be
      exercisable more than ten years from the date the option is granted.

8.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

         The aggregate number of shares of Common Stock which may be purchased
pursuant to the options granted under the 1994 Plan as provided in Section 4
hereof, the number of shares covered by each outstanding option and the price
per share in each such option shall be proportionately adjusted for any increase
or decrease in the number of issued shares of the Company's Common Stock
resulting from a division or consolidation of shares or other capital
adjustment, or the payment of a stock dividend or other increase or decrease in
such shares, effected without receipt of consideration by the Company; provided,
however, that any fractional shares resulting from any such adjustment shall be
eliminated.

         Subject to any required action by the stockholders, if the Company
shall be the surviving or resulting corporation in any merger, any option
granted hereunder shall pertain to and apply to the securities or rights to
which a holder of the number of shares of Common Stock subject to the option
would have been entitled.

9.    MERGER INTO ANOTHER CORPORATION OR SALE OF SUBSTANTIALLY ALL OF
      COMPANY'S ASSETS.

         If the Company shall be merged with another corporation and shall not
be the surviving or resulting corporation in such merger or if the Company shall
sell substantially all of its assets, any option granted hereunder shall become
exercisable sufficiently prior to the effective date of such merger or such sale
of assets to permit the exercise thereof by the holders thereof, unless under
the terms of such merger or sale of its assets, any option granted hereunder
shall pertain to and apply to the securities or rights to which a holder of the
number of shares of Common Stock subject to the option would have been entitled.

                                       -6-

<PAGE>

10.   RIGHTS AS A STOCKHOLDER.

         A holder of a stock option shall have no rights as a stockholder with
respect to any shares covered by such option until the date of issuance of a
stock certificate for such shares.

11.   WITHHOLDING TAXES.

         Whenever shares of the Company's Common Stock are to be issued in
satisfaction of stock options granted under the 1994 Plan, the Company shall
have the right to require the recipient to remit to the Company an amount
sufficient to satisfy all applicable withholding tax requirements prior to the
delivery of any certificate or certificates for such shares.

12.   TERM OF 1994 PLAN.

         The 1994 Plan shall become effective upon its adoption by the Board,
subject to approval by majority vote of the stockholders of the Company. It
shall continue in effect until October 31, 2004 unless sooner terminated.

13.   AMENDMENT OR TERMINATION OF THE 1994 PLAN.

      (a) The Board may amend the 1994 Plan from time to time in such respects
      as the Board may deem advisable, provided that no change may be made in
      any option theretofore granted which would impair the rights of a holder
      without consent of the holder, and provided further, that without the
      approval of stockholders, no alteration or amendment may be made if such
      approval would be required by Rule 16b-3 under the Exchange Act for
      transactions pursuant to the 1994 Plan to continue to be exempt
      thereunder.

      (b) The Board may at any time terminate the 1994 Plan. Any such
      termination of the 1994 Plan shall not affect options already granted and
      such options shall remain in full force and effect as if the 1994 Plan had
      not been terminated.

                                       -7-

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